Getting out of debt
I am sure this may be one of the difficult exercise you may need to embark on. But for a healthy environment is deemed necessary to happen to create a positive environment for yourself.
Let us first realise that the decision to cut off your debts does not only involves paying them off. It means changing your old ways of spending money.
I have few important pointers that will help you embark in this journey.
- Create a practical budget
A budget teaches you how you must spend your money. Create it and follow through. The budget will help see if you have funds for certain things or not. Especially those that we can do without.
2. Get into the habit of buying things cash.
This will teach you to live within your means. Impulse buying almost disappear when you buy for everything in cash.
3. Prioritize paying off the debt with more interest rate
Make sure the decision to pay off your debts does not overwhelms you that you get the pressure wanting to pay for everything at once. Tip: Concentrate more on the debt that accumulate too much interest. Pay it off and move to the next.
4. Dedicate a certain percentage of your income to savings
As you create your budget, make sure you do not leave out at least 5% – 10% to your savings. This will help you with those unexpected expenses that you would not have budgeted for.
5. Generate more income
Cost of living is too high. To a point where even if you were to request for a raise you will still find yourself needing to stretch. Thus I say create multiple streams of income. This is necessary for everyone. It will help you a lot with cashflow.
6. Be patient
Acknowledge that it is not going to be easy to get yourself out of the trap. And unfortunately there is no easy way out.
Be careful of those programmes that promises to get you out quicker. Make sure you understand them before you sign up should you need their assistance.
Compiled by Ms. Dikeledi Seoloane on behalf of Matsobanemetja Business Consulting (Pty) Ltd