Debt does not have to be a disease you carry around with shame and anxiety. If you are sick and tired of living with debt, you can make a plan to get out of it and start taking control of your life, writes Maya Fisher-French.
According to the debt counselling firm, DebtBusters, the average debt counselling client earning more than R20 000 a month is spending 64% of their income on debt repayments. A whopping 64%.
With these strategies you can take control, know you’re making progress in paying off your debt and save money on the interest.No matter how insurmountable your debt might seem, you have to face it head on. First, you have to list all of the debt you have. You can obtain this from the monthly statements your creditor sends.
This is the most recommended strategy of paying off debt because this is the debt with the highest interest rate – the one that is the most costly. So it makes sense to try to direct your extra funds to these while still paying the minimum payments towards all other obligations. Using the same example as above, if you apply the snowball method, it means that you will pay off your debt in this order:4) Credit card: Bank 1 R40 000The rationale behind this method is the psychological effects of paying off debt. When you set the goal to pay off a debt and you achieve it, it feels amazing.
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