22 October 2013

None of us are strangers to the world of loans and credit but the hard and fast reality is that millions of South Africans are struggling to keep up with their monthly debt repayments. Are you one of those South Africans, dodging calls from angry creditors and dangerously close to being blacklisted? If so then never fear – there is a way to escape the debt trap.

Ian Wason at DebtBusters, gave 1st for Women, these steps to financial recovery.

Income and expenses:

Sit down and work out a realistic monthly budget. You know the drill – food, rent or bond repayments, transport costs, insurance etc. Now get out your pruning shears and cut back on your monthly expenses:

  • How about cancelling your satellite TV subscription or your gym membership? Can you really afford a maid? Read our money saving tips for more ideas.
  • If you have a bond speak to your bank about restructuring your loan and reducing your monthly repayment.
  • Renegotiate your car and household insurance premiums with your insurance company.
  • If you have any retirement or other long-term savings plans put them on hold for now and focus on clearing your debt first.
  • Armed with your shiny new budget you should have a clear picture of how much you have available every month to pay your creditors.

How much do you owe?

Your second step is to work out who you owe money to and how much you owe each of them. The easiest way to do this is to request a free credit report from Experian or Transunion.

If your monthly repayments are unmanageable then speak to your creditors and ask them to reduce your monthly instalments. You will find that most of your creditors will be flexible when it comes to negotiating monthly payments that are more affordable for you.

Lastly, put a checklist in place to ensure that each of your creditors is paid every month, whether you make your payment in person, via debit order or EFT.

Tip: Look at the interest and fees that you are paying each creditor and try to pay off your most expensive debt as quickly as possible.

Work it

Now it is up to you to stick to your monthly budget and honour your monthly payments. Clearing debt is not easy and there are no quick fixes. It takes patience, focus and commitment to improving your financial well-being.

When to get help

If you simply cannot afford to repay your creditors despite all your best efforts to reduce expenses and negotiate payment agreements then you need the help of a debt counsellor. He or she will negotiate payment agreements with your creditors on your behalf and help you structure your budget and reduce monthly expenses. Speak to your bank about finding a reputable debt counsellor.

About DebtBusters

DebtBusters is a debt management company launched in 2008 with services available nationwide. All their debt counsellors are fully qualified and compliant with the National Credit Regulator (NCR). Find them at www.debtbusters.co.za.

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