Old Mutual
Old Mutual
Responsible Credit
Our first episode of the 6-part Thought Leadership Podcast Series is finally out. In our first episode, Old Mutual Finance CEO, Jan Moganwa joins Arabile Gumede to discuss the importance of responsible credit and how it can impact our credit profile.
Arabile Gumede 00:03
Welcome to the Old Mutual Thought Leadership Podcast Series, where we have conversations with subject matter experts on the pertinent topic of responsible lending, so that you can make informed financial decisions.
Old Mutual. Do great things every day.
Arabile Gumede 00:24
South Africa is a country laden with debt, unfortunately. It's a situation that lenders themselves have always looked at and said, how can we be better? It's a situation where borrowers themselves say, how can we be better at managing our finances? So, how exactly do we deal with not just a debt crisis, but really a credit crisis, if you want to call it that. Perhaps education has always been the one thing we've lacked, and the one thing that we can do a whole lot more of, to help alleviate the situation.
So, let's talk about responsible credit, all of that and a whole lot more in this conversation, then. Jan Moganwa is the CEO of Old Mutual Finance and joins us now to unpack this. Jan, thank you so much for the time, really appreciate it.
Jan Moganwa 01:11
Thank you very much, Arabile, for the chat. I'm looking forward to having this conversation.
Arabile Gumede 01:17
Yeah. Look, it's as I noted, we have a country that spends at least two thirds, if not three quarters, of the disposable income just on paying off debt alone. It's a big industry, but it also could be a big problem in the country.
Jan Moganwa 01:33
Yes. The first point to start at, I think, is it starts with responsibilities. Maybe that's where I would like to start, and what are the responsibilities? South Africa should - can be characterised as a welfare state in the sense that you've got a smaller group of people looking after a bigger community, you know. It's often said that, for every employed person in South Africa, they look after five to seven people, right?
So, it starts with responsibilities before it becomes about credit. And what's the link between the responsibility and credit? Credit, in simple terms, is committing your future income to something you're spending money on today, right? So, when people have got lots of responsibilities, looking after immediate families, and extended family, they find themselves in situations where they have to decide to essentially mortgage their future income. Spending money today, which you are going to earn in the future. That's really what it boils down to.
Arabile Gumede 02:45
Sjoe, I mean, that hurts when you just think about how you don't have much today, and then you will have even less then in future. How do you ensure then, that you do this in a responsible manner?
Jan Moganwa 02:57
That is right. So, if you're going to make a call, like spending your future income today, maybe you really want to be careful about it.
Arabile Gumede 03:06
Yeah.
Jan Moganwa 03:07
And that's where responsible credit comes in. And it sounds like a contradiction in terms, because can credit ever be responsible? And that's really the question you have to ask yourself every time you're taking the next loan, or the next credit card, the next mortgage, the next car finance.
Arabile Gumede 03:29
Yeah.
Jan Moganwa 03:29
Is this responsible? Right. And the reason why at Old Mutual Finance we think about credit as part of a wellness that you must think about as responsible, is that we think credit is an important part of financial solutions. We don't see it as always bad. So, to use an example. Very few people will ever have all the cash they need to buy the next house or the next car. Those things will always take some form of credit.
Arabile Gumede 04:05
Yeah.
Jan Moganwa 04:05
But we see those things as typically responsible. The ones that are a bit tricky, are the so called short-term unsecured loans.
Arabile Gumede 04:16
Which becomes sort of the bad debt and others are good debt in the context of a consumer?
Jan Moganwa 04:21
That's right. That's right. That's right. That's really where it starts to be tricky in terms of how to split that, right. So, if you've got a big party coming, you're about to turn 40 or 50. Life begins at 40, so they say.
Arabile Gumede 04:38
Wouldn't know yet!
Jan Moganwa 04:39
Is it worth you getting a big loan? Often as something that you end up paying over a long period of time, we'll talk about some of the elements that we consider responsible, and that's where it gets tricky, around which debt is responsible and which debt is not.
Arabile Gumede 04:59
In trying to get this right, of course, and we will talk from a corporate point of view as well, and also then, right now, I suppose the focus is a little bit on the lender themselves. Do you think there's enough understanding of those very two concepts, just of responsible credit and irresponsible credit in that sense? Is there enough of that for people to get a sense of where they actually sit when it comes to their credit?
Jan Moganwa 05:25
I think what complicates this is often this boils down to unique personal circumstances, right? So, you've got a child in the extended family who needs to pursue further studies, and there is no money to fund that. And you go and get a personal loan.
Arabile Gumede 05:46
Yeah.
Jan Moganwa 05:46
Is that responsible? These are difficult, difficult decisions, right? I think the fine line, and often the criteria is when you find yourself getting a loan for lifestyle expenses...
Arabile Gumede 06:00
Yes.
Jan Moganwa 06:02
...getting the next fancy pair of sneakers, and all of that, living the best party and whatever. That's to question whether that's responsible or not. But the point I want to make is that this whole issue around what is responsible and what is not, boils down to personal circumstances. You just want to think very carefully about the next decision you make on whether to get the next loan or not.
Arabile Gumede 06:30
Yeah, so, if we talk about ways to be a little bit more responsible, what would those sort of be when it comes to, you know, attaining credit?
Jan Moganwa 06:39
It is the usual boring stuff. So, the first thing is you need a plan. And I know people don't want to do a plan, financial plan, don't want to do a budget. Throw away the big terms, about financial plans, budget... it's not that complicated. You have a source of income, and you have expenses. And what you're trying to show - and in their expenses, it includes debt commitments, you first, at bare minimum, you want to ensure that your income is sufficient to be able to cover your expenses and your debt commitment. And hopefully, also leave you with some money that you can put aside as a savings for any surprises that you may encounter in the middle of the month.
That's really as basic as it comes. It does not need a complicated form, complicated software. It's just looking at your income and say, do I have enough to cover my commitments? And hopefully put some money aside. Now, the second thing is that where you have debt commitments, how do you ensure that you stick to those commitments, right, because every time you miss a payment, that is recorded against your profile at a credit bureau. To say, you are slow in making your payments, and therefore the next company you ask for a loan, they need to be a lot more cautious about giving you a loan. So, those things go on your profile.
And if you find yourself in a position where you have missed some payments, or you are over-committed in terms of your debt, your next set of considerations is whether you do a debt consolidation or go through debt counselling. So, it's all of them come to this discipline around what's the plan. Stick to the commitments. And if you find yourself in trouble, engage proactively with the lenders, people who gave you the loans, and then think about the next plan, which may be debt consolidation or debt counselling, depending on your circumstances.
Arabile Gumede 09:03
Yeah. How important is it to also try and keep your debt as low as possible?
Jan Moganwa 09:08
It is quite important, because if you keep your debt as low as possible, it means less of your income goes towards debts, which means you've got a bit more money left that can go towards savings and investment.
Arabile Gumede 09:24
Yeah, and I make note of this, because, for example, you may have a credit card that has, I don't know, let's just say for example, a R20,000 limit. Going to the end of that credit card to R20,000, would that be a worrying sign? Or is that just normal? Because I have R20,000 in credit, right? So, if I use all of it, well, it's what have applied for. Is that okay?
Jan Moganwa 09:47
The starting point is actually whether you should have a 20,000 limit, forget how you are using it! So, often the issue is people have got a higher limit than what they actually require, which is why you have to keep on going back to, what's my plan here? You know, we are seeing instances where a customer goes to a bank or even come to Old Mutual Finance and say, I'm looking for 20,000. And then sometimes the lender says to you, do you know you qualify for 100,000? Right? That's the -
Arabile Gumede 10:25
That's a lot!
Jan Moganwa 10:26
That's the point at which you must ask yourself a question: how much of my future income do I want to sell today, right? And at that point in time, you have to be able to say, I came here after having considered my plan. And I felt that what I need is 20,000. So, 20,000 is what I'm going to take, regardless of what I am offered. That's the first responsible thing to do.
But to come back to your question around how do you use that limit, that limit again, don't just use it because it's available. Still ensure that it is in line with your plan. And in fact, it may get to a point where you realise that you've got a higher limit than what you require. Then you need to talk to the lender and say, can I reduce my limit? But in terms of your questions around the closer you get to the limit, the lenders interpret that as your finances are starting to become under strain, right. And they start to look at your next application with caution, because you are close to the limit on your existing facilities.
Arabile Gumede 11:45
Sjoe, so much to actually consider in doing all of this. And I guess it all comes down to that credit score at some stage, right? One must consider then as well that all of this is affecting that score and limits your interaction with credit at a later stage when you may need it a little bit more, when you may need it for perhaps a more necessary situation as well. Let's talk then about something you mentioned a little bit earlier, debt counselling and debt consolidation. What's the actual difference there?
Jan Moganwa 12:16
I want to talk about that, but just on the point you made about the credit score.
Arabile Gumede 12:22
Yes.
Jan Moganwa 12:23
Basically, what the lenders are looking for is, they are assessing whether you have the character and the ability to stick to your debt commitments. So, the credit bureau keeps a profile of how you are managing your finances, right. And that record is there, whether you are paying, not paying, that is different to being blacklisted.
So, all customers who've got loans, they have a record at the credit bureau that shows how they are handling their commitments. In fact, every year, you have the right to get a free copy of your profile at the credit bureau. That's something that many customers, many people, are not aware of. You have the right to get a copy of your credit report once a year, for free, and you need to go through that. And through that, you will be able to see all the various debts against your name, and how you have managed them over time. But more important, you can also pick up instances where you have paid a particular loan...
Arabile Gumede 13:45
Yeah.
Jan Moganwa 13:45
...but it does not reflect as paid at the credit bureau. So, I really encourage people to look for services that is on the internet, you can come into an Old Mutual branch, we will have people there who will be able to pull out your credit report and go through it with you to check that it's accurate.
Arabile Gumede 14:08
Yes, so always pay, whether it be your debts or any other expenses on time, right?
Jan Moganwa 14:14
Pay on time. When you're not able to pay on time, engage with the people who gave you the loan, and talk to them about the various options.
Arabile Gumede 14:23
A lot of people actually tend to keep quiet in that moment, because they just think, oh, no, if I speak to them, then they'll demand their money right now. But actually, the best thing to do is to engage, right, because alternative plans can be made.
Jan Moganwa 14:35
That's right. So, when you engage, then there are various options, you know. It can be rearrangements of your various loans, the restructure of the loan to ensure that your commitments start to become within your means, you know, there are various options, but those options come up when you engage and say, "I have challenges".
Arabile Gumede 14:57
Yeah.
Jan Moganwa 14:57
And I want to come back to the question you then asked then, about debt consolidation versus debt counselling. So, what is debt consolidation? So, you have these various loans, maybe four or five different loans. And on those loans, you are paying different interest rates. And what then happens is, as you find out that you have these financial challenges, and in fact it is not only when you have financial challenges, always look at what you are paying for various loans.
So, you're paying these five loans, and then you realise that, actually, I can combine all of these loans into one loan, that I will manage very well, stick to my commitments, instead of continuing to manage these five loans. And sometimes, you will find that, depending on the level of interest rates, so for example, today in South Africa, the rates are at the lowest they have ever been for more than 40 years. So, if you are going to look for opportunities to combine your loans into one, this is probably the best opportunity, because interest rates are at their lowest.
So, what happens is the five loans are then combined into the one loan. You get one installment, and it becomes something that is easier to manage. And those are some of the options we offer for customers who come into any of our Old Mutual branches and other service providers.
Debt counselling is a different solution. Debt counselling is where you go to a registered debt counsellor. So, there are people out there that are registered as debt counsellors. And just like you can have counselling for your relationship issues, your health issues, this is counselling around your finances. This person talks to you about your situation, what's happening with your income, has it reduced over time, what are your various commitments, and those commitments are not just debt commitments. They also include money you spend on other living expenses: kids, school, groceries, all those things are taken into consideration in understanding your unique circumstances.
Arabile Gumede 17:34
Sure. So, debt counselling may not necessarily lead to debt consolidation, right? It may change, may lead to a change in behaviour of how you manage your debt or how you use your expenses. Is that correct?
Jan Moganwa 17:46
That is right. So, a debt counsellor may say to you, I actually don't think you've got much of a problem. If you could just stick to paying this and maybe paying some debts off, you will free up some of the money that today is committed towards debt. So, it does not always have to lead to debt consolidation. The other thing that a debt counsellor is able to do is to do something called a debt review process.
Arabile Gumede 18:17
Yes, okay.
Jan Moganwa 18:17
What does debt review process mean? What it means is the debt counsellor works with you to look at your various debts. And they may get to a point where they are saying, we need a formal programme to help you manage your debt. We are going to register this at the bureau - credit bureau - to say you are a customer who's under debt review. What does that mean? It means working with the debt counsellor, they are able to approach all the people you've taken loans from, and formally say to them, this customer is under debt review, and this is our proposal on how their debts can be structured. And what does that mean? It means they can go to various lenders and say we think the customer can only afford to pay less here.
Arabile Gumede 19:19
Yeah.
Jan Moganwa 19:19
We think you must reduce their rate. We think you must restructure this. We think what used to be a 24-months loan maybe should be paid over 48 months. But that's all done under a legally protected process called debt review.
Arabile Gumede 19:37
Yeah. How much impact does this then have, though, on your credit score? I mean, one can imagine that if I'm going to get debt consolidation, that would be made known to the credit bureau, for example, and they would look at it and say, oh, for you to have needed that, means that there's a situation happening with your debt. Does that lessen how, you know, how you're viewed from a debt perspective?
Jan Moganwa 20:00
So, debt consolidation is actually seen as a proactive way of managing your loans. It does not necessarily mean you have a problem; it might just be that you feel you're paying too much interest on your existing loans, and you see an opportunity of consolidating those into one loan to take advantage of lower rates.
Debt review is a formal process done with a debt counsellor. But therein lies a catch. When you are under debt review, that is registered at the credit bureau to say this customer is under debt review. And the reason why that's done, it is to protect the process you're going through with a debt counsellor. Remember, you've opened up to this person who says, this is what we can do with your debt. They have contacted all the places where you've got loans, they have restructured some of the facilities, and in the middle of that you go and apply for another loan.
Arabile Gumede 21:09
Oh boy.
Jan Moganwa 21:10
Right. This is why, when you go under debt review, this is recorded at the credit bureau, so that any other lender, so the next person you may go to for a loan, can be aware, can get to know that you are going through a legally protected process called debt review.
Arabile Gumede 21:32
So, can anyone do this? I mean, for example, maybe you're not, you know, you made note that perhaps the interest rates are a little bit too high, and that's how you feel. So, can I, for example, just go to all my lenders and say, listen, I'd like you all to consolidate all my debts, because I just feel like my interest rate is too high.
Jan Moganwa 21:50
Yes, you can. You can always proactively - that's why I'm saying debt consolidation, we encourage it, right. So, proactively engaging and say, I want to reduce how much I'm spending on loans, and I want to combine this into one loan I can manage. But equally, if the situation is really bad in relation to your finances, you can then approach a debt counsellor and say, I have done what I can on my own. Now, I really need professional help. And the debt counsellor will take you through that process. But just as I said earlier, the debt counsellor may still end up saying, I think you've got this under control, or I think there are some minor tweaks you can do. Or I think you must go under debt review process.
Arabile Gumede 22:46
Okay, let's talk just very quickly on interest rates, how important is it for people to know the interest rate they're paying on the debt?
Jan Moganwa 22:54
So, interest rates are very important, because that is truly the cost of debt.
Arabile Gumede 23:00
Yeah.
Jan Moganwa 23:00
Right. You get 40,000. And when you get that loan, the agreement you are given by the lender shows you how much you will pay back over the life of that loan.
Arabile Gumede 23:14
Yeah.
Jan Moganwa 23:14
It is important that you go through those documents because you got 40,000, but you might just end up paying back 60,000/80,000 depending on how long you have taken the loan for, and what is the interest rate you pay on that loan. So, it is very important that you look at the interest rate. And in fact, if you feel you still need the loan, take the time to compare the various interest that are quoted by different lenders.
Arabile Gumede 23:48
Yeah, okay, very important to actually be able to do that. And some of that interest rate is determined by your credit score then, right? Because it determines your worthiness or ability to actually repay those loans. So, a lot of what you will then get as an interest rate, particularly when it comes to unsecured lending, and of course, yes, with others too, it will be dependent on how much you've been able to pay previous loans, right?
Jan Moganwa 24:16
That is right. And that is why none of the people you can go to for loans will be able to commit to a particular interest rate upfront. They have to first assess your unique circumstances. So, you can go into a bank or Old Mutual Finance and get a loan. Someone else can go and get the same amount of loan, but you may pay very different interest rates, and therefore end up paying very different amounts going forward. And that's purely because the lender will consider the unique circumstances of each customer.
Arabile Gumede 24:57
Yeah. I think it would be a really good time to sort of just talk about even my debt story, for example, and, you know, there was a point in time where my mother and I didn't have any income at all. But as I started my first job, I was able to take on a little bit of credit. And that's kind of what happened. We took on a little bit of debt here and there to try and shore up the finances at home. And what I eventually found myself in was just this heap and mountain of debt at the start of my career. And, you know, I needed to look back at all of it and say to myself, how am I going to clear it, one, but two, this is not a sustainable process.
So, I need to, as you said a little bit earlier, not give away my future for current spending. And it really became a case of giving up a whole lot of money in that time, and then looking to the future and saying, I don't want to see this again, I don't want to do this again. And I guess for that reason, it is why my debt situation is probably as it is where I hardly have any debt. I actually pay for my car, for example, and I paid for it in cash. So, I saved for a few years, and I paid for it in cash. The only debt I really, really have is my house. I'm not saying everybody should live like that, right. I mean, I don't think that's what we're saying here, Jan, but it is about being responsible for it.
Jan Moganwa 26:17
And therein lies the point, right? So, you found yourself in a situation.
Arabile Gumede 26:22
Yeah.
Jan Moganwa 26:23
You came out with a plan, you started to make decisions around what are you going to pay off, what are you going to keep. And that's really what I meant earlier when I said, look at your circumstances, and come up with a plan. Now, for many people, you mentioned your mom, for other people, it is their partners, it's their siblings, right. One of the things we need to start getting comfortable with is talking about finances, right. In your example, I'm sure you were able to talk to your mom about, this is my situation, and I'm really struggling, and I need a plan. This is what we're going to do without. And this is what we're going to settle.
Arabile Gumede 27:07
Yes.
Jan Moganwa 27:08
It is very difficult for people to have that conversation with their partners, or some parents with their kids, right. And it starts there. Can you look at your loved ones and say, guys, this is my situation. We need a plan or otherwise, we are in trouble. That's some of the habits we need to start to entrench, openly talking about their finances. I've seen a joke, and I'm hoping it's more than a joke on social media, where people were saying, next I decide on who I date, one of the things that I want to see is their business plan, and their credit bureau report.
Arabile Gumede 27:51
[Laughs] If it was not more than just a joke, I can bet there'll be a little bit of... a few difficult relationships that may even need to end or will be heavily investigated in the future.
Jan Moganwa 28:02
Exactly, there are people who jumped straight into commitments, only to find... remember, when you get married to a person, especially in community of property, you also equally share in all the debts they have accumulated before that point. Those things cannot be left to chance. I know you might be feeling Cupid has struck you and it's all romantic -
Arabile Gumede 28:27
Don't be blinded!
Jan Moganwa 28:28
- but please have the conversation around, who am I getting committed to here, because I'm going to share in the commitment.
Arabile Gumede 28:37
Yeah, I also have a concept called dating in your financial lane. And it doesn't necessarily mean you're dating somebody who's earning the same as you, we don't have to earn the same amount, or you earn more than me, or whatever the case is, but it's about somebody who values money in a similar way. Right? So, you date somebody who sees that when debt is getting too much, you both can say, oh, no, no, no, we're not going to go in that manner. I don't know, I think that's a concept, perhaps.
Jan Moganwa 29:05
I'm not going to comment on dating within your lane, I think people should shoot their shot, you know, wherever they feel like. The important thing is, sit down, have an honest conversation, no matter what the circumstances of the individual partners are. They might have very different circumstances. But the important thing is to have that conversation saying, who am I dating here? Who am I engaging with here?
Arabile Gumede 29:33
Okay, let's move on over now to a part that's also just as critical: the bank or the lenders' responsibility when it comes to credit. And I mean that in the sense of, it's a big part of business, right? It's a big part of making money, to have lending and responsible lending happen. How do the lenders, the financial institutions, play a role then in ensuring that you have a financially stable and a financially responsible credit environment?
Jan Moganwa 30:03
And that's where it gets tricky, you know, there's often a saying that if you see painting on the wall, someone is going to call it graffiti, and someone else is going to say this is vandalism. So, I find the same thing is happening with credit, right. So, if you go and get a number of loans way beyond your commitment, there is this thin line around are you being irresponsible in your borrowing, or is the lender being irresponsible because they gave you a loan they should not have? So, there is an obligation on people you approach for loans to assess if the next loan they give you, is it responsible or is it not?
And that's something we take very, very seriously as Old Mutual, because we are in a position of trust with our customers. You know, they come to us when they cannot go to anyone else.
Arabile Gumede 31:05
Yeah.
Jan Moganwa 31:05
Right. They expect us to be responsible, and it's a responsibility we take very seriously.
Arabile Gumede 31:11
Yeah, and I guess this is why people need to know what they're getting themselves into also, right. While the lender is there, they also need to play their very critical role in and amongst this conversation. You touched on something called the NCR, the National Credit regulator. They're also Ombudsman's for both credit and banking and all of these different... what purpose in the credit sphere, do all of these parts play in trying to ensure you have responsible credit or lending?
Jan Moganwa 31:40
The big part they play is they are more like referees, right.
Arabile Gumede 31:45
Okay.
Jan Moganwa 31:46
So, there is this engagement between you as an individual and a company that is giving out loans. But when things don't work out, you start with a complaint going to the same company that has given you loans, but you might just also get to a point where you are just not getting anywhere in getting your issue sorted out.
Arabile Gumede 32:09
Yes.
Jan Moganwa 32:09
Who do you go to? And that's where these institutions you're referring to come in. The Ombudsman, the credit regulator, these are the various entities you can approach and say, I have been dealing with this issue with this company. I'm just not getting anywhere. I need your help. And they are open to engaging with you and taking up the case on your behalf with the company that you've got a service with or a loan with.
Arabile Gumede 32:42
Old Mutual's role then, I suppose, in the bigger scheme of things here as well, to try and get a sense of the lending sphere, how big a role is it that you're trying to play in one, education of people knowing and understanding before they take out a loan during that loan from, and even afterwards. Perhaps they've cleared that loan. Understanding why maybe they should or shouldn't take a loan in future, and what it has meant for them in that time. How big a role do you want to play in that sphere?
Jan Moganwa 33:10
It's interesting, you know, the way we look at it at Old Mutual, the conversation is actually less about the loan. The loan is a secondary thing. The important thing for us is, is there a plan around your journey to financial wellness?
Arabile Gumede 33:29
Okay.
Jan Moganwa 33:30
Based on your responsibilities, your aspirations, the aspirations of your loved ones, so we prefer to have a comprehensive conversation around, do you have insurance for any surprises, including death. And again, that's another topic we must get comfortable talking about. Because when someone passes on, people run around looking for details they could have very much discussed before it gets to that point. But to come back, we want to talk about your holistic plan. In fact, we might even get to a point where we think the next loan is not the best solution for you. In fact, maybe what you need to worry about is to cover yourself for risk, and maybe put some money aside as savings. If it gets to a point where a loan is one of the solutions suitable for you, we want to ensure that you pay that as soon as possible, at as much a low price as possible. And it does not lead to over commitment. But we can only do that if we see that within the context of your broader plan. So, be very careful when you see a service provider, the next SMS that says you've been pre-approved for 250,000 in loans.
Arabile Gumede 34:58
Yeah.
Jan Moganwa 34:59
How do those people know what your plans are, what your aspirations are, what your responsibilities are? Next time you receive something like that, if you end up engaging with the entity that has sent you the message, start by talking about your plan, before you talk about, I'm happy to take the loan.
Arabile Gumede 35:21
Yeah, there's also the element of when you're young, and you've just entered the business space or the workspace, right, the first thing that some might do is to look to get maybe a new car, maybe, you know, you're looking to get so many other things, maybe you need work clothes. And all of those things then accumulated through debt. What would perhaps be advice or thoughts to a situation like that, where young, you know, young businesspeople are entering the sphere, and then unfortunately, getting themselves stuck with a whole lot of debt.
Jan Moganwa 35:54
Unfortunately, this is where often things are repeated, like, you know, don't buy a car, don't buy a nice pair of clothes and shoes and all of that. I think those are values questions, right. So, people have got very different values, they've got, you know, things they want to have at a particular stage in their lives. And I don't think those things are insignificant. They are very important if they are important to you.
Arabile Gumede 36:26
Yes.
Jan Moganwa 36:26
That's why I'm saying, the most important thing is I'm not about to say, don't buy this, don't buy that. All I want to say is, do you have a clear plan? And do you understand why and how the next thing you buy affects your plan? Can you be able to stick to your commitments? That's really the most important thing.
And the commitments you make today, please understand that you are spending the money today, but in a way, you are spending the money you're gonna earn in the future. You're just spending it today. If you are going to do that, you want to ensure that you have thought hard about it, and it is in line with your plan. You can go get a car if that's what you need, because some people are struggling with movement in terms of challenges with transport and all of that. But can it be within your plan? Is it within your means? Can you be able to stick to the commitments and hopefully still have some money to save?
Arabile Gumede 37:37
Yeah. Jan, let's get a final word in then, I suppose with regards to, maybe we call it advice. Maybe we call it a sense of understanding where to from here, if you're stuck in a situation right now where you do have a whole lot of credit or you want to understand the sector a little bit better. What would perhaps your advice be to people just in general right now?
Jan Moganwa 37:57
I think talk to someone. This is something we do as a standard at Old Mutual. Come talk to us and say, this is my income. These are my various expenses and commitments and all of that. This is my plan. These are my aspirations. And I want to talk to an expert who then can guide me through the various steps I need to take forward. Talk to someone, but more importantly, spend time thinking about, you know, your plans, your aspirations, but you will learn so much from engaging with people who have dealt with many of these issues before. Talk to someone!
Arabile Gumede 38:40
Jan, it's been absolutely great. I think the Thought Leadership Podcast Series is going to be one where we focus in on these pertinent issues that are going to uncover whether it be part of the pandemic or not, the serious issues that are affecting people in general, and getting them to get to grips with all of it, and maybe make for a better country, for a better society for those who can get to perhaps alleviate the issues that hurt them most as a country. And I think that is what we're trying to do here.
This is why we're trying to create a responsible society, one that actually comes to terms with how difficult things may be, and how they can make things better. We face a whole lot of challenges as a country, and this is one that we're trying to make less of, so that we can focus on some of the other things as well to make ourselves better. Jan Moganwa, thank you so much for the time, really appreciate it. The Chief Executive then of Old Mutual Finance, appreciate it then as we get into the responsible credit segment of our Thought Leadership Podcast Series.
Jan Moganwa 39:44
Thank you very much. And no matter how uncomfortable some of these topics are, I think let's get used to talking about some of these subjects, including those that are very uncomfortable. Thank you very much for that.
Arabile Gumede 40:00
Fantastic stuff.
Arabile Gumede 40:02
Old Mutual. do great things every day.
Arabile Gumede 40:06
Old Mutual Finance is a licensed financial services and registered credit provider NCR CP 35.