You “CAN” settle your credit card, store accounts and loans by the end of 2018 as long as you commit wholeheartedly. This is how you slap yourself awake to the reality of your financial situation and get started!

In the run up to the festive period it’s easy to ignore your debt concerns, and get wrapped up in the “silly season” spending sprees that kick everyone’s spending habits recklessly into overdrive. You’ve got presents to buy, lunches to shop for, and New Year’s party goodies to get.

The New Year kicks in and a few days later your panicking because you’ve managed to have blown your December pay cheque and bonus in a couple of days of spree spending! Now you’re stressing about how you’re going to make it to the end of the month…let’s be honest we’ve all done this one time or another.

Well now its 2018 and its time to face facts, hard realistic facts, that you’ve been ignorantly going about your business ignoring.

Fact: If you’re using your overdraft on your bank account, you’re in debt. If you’ve maxed out your overdraft limit, you’re on the verge, wait NO! You have a very serious debt problem! Meaning more than likely all of your debit orders and credit commitments are about to bounce. From that point on its slippery slope and things can go horribly wrong fast.

You “CAN” however do something about it if you’re willing to accept the cold reality of your situation and commit yourself to working on a solution.

Now is the most opportune time to draw up your battle plan to get rid of your debts and end the year debt squeaky clean.

Here are our steps to paying off your debts once and for all. If you however think you’ve already got more debt concerns than you can handle, you can contact us for free advice.

Know thy debts

It may sound odd for us to say, but it might not be as bad as you think. Start by listing “ALL” of your debts, and I do mean “EVERYTHING!” including your overdraft because it is a credit facility (worse than a credit card even) so don’t lie to yourself thinking your overdraft is not a debt. It’s a glorified pay day loan.

Now look on your statements to see how much you’re paying in interest or fees on each debt, you’re going to be shocked so prepare yourself. This will help you prioritise which accounts you need to pay off first.

A quick & easy way to do this is to take a look at your credit bureau report. This lists “who” you owe money to, and this very report is used by credit providers when their determining whether or not to offer you that loan you applied for. You can pull your free credit report every 365 days; see our articles on how to do this on our site.

Know thyself, get realistic about your spending habits

If you’re committed to ending your debts, you’re going to have to resign yourself to the fact that you’re going to have to focus on spending less and paying back more.  Zone in on the problem and start asking yourself the hard questions: “Are you a big spender?”

If your answer is “yes”, then what EXACTLY are you spending your cash on? Has your salary been decreased? Or did you make one mistake and things got out of control?

Rule number 1: YOU CANNOT BORROW YOUR WAY OUT OF DEBT IT NEVER WORKS!!!

Create a budget

I truly get tired of talking about budgeting, but people truly under estimate the power of working with a budget. If your spending money without monitoring where it’s going or how much you have left after expenses are paid, then you truly have no clue what is happening in your financial life.

Go through your bank and credit card statements and identify what expenses and luxuries you can cut down on.

Then slap yourself awake and start seriously rethinking your spending habits. We’ve got tips on how to cut your shopping bill, and work on your spending habits on our site.

Prioritise Prioritise Prioritise!!!

Certain debts have far more dangerous consequences if you default than others. For example, if you fall behind on your home loan, you could lose your home. But if you don’t pay off store card debts, you can simply lose money or possessions via the legal collection process. You can read more about priority and non-priority debts here.

Don’t run & hide, speak to your credit providers

If you’re behind on your debt repayments, it’s worth speaking to the credit providers. Most are willing to try and accommodate you on your current financial situation, though it is a matter of “give & take”. You’re going to have to work with them though to find the middle grounds. When you run and hide that’s when the bad things happen.

Consider debt snowballing

For some debtors, it makes sense to focus on paying off the debt with the highest interest rate first, but there are numerous variable involved to this method. This is in practice is called ‘debt snowballing’.

NB: this is not a solution for everyone so be EXTREMELY CAREFUL about this approach, consider chatting to a specialist first (CALL ME) to see if it will work for you before you dive in head first.

Safety net, everyone loves them!

Once you’re back in the black (bye bye red!), keep on trucking to build up a financial cushion. This will give you some breathing space if you get caught out again and the world throws you some lemons. You can do this by saving, yes seriously! Just like your parents used to whine to you to do growing up, turns out they were right.

So all that money that you’ve learnt to source and work with over 2018? Well now it’s time to start banking some of it and protecting your financial self.

Consider a Debt Management Plan

If this is already too stressful and you don’t know how to start or can’t handle your creditors yourself, know that there is absolutely no shame in asking for help. Only the foolish suffer in silence when there is a helping hand that can reach out and lift you up.

You can sign up for Debt Counselling (also known as Debt Review), where you pay a set amount each month which gets distributed to your creditors via a legal arrangement.

But be careful. You need to sign up with Debt Counsellor you’ve met and spoken to, someone you can trust – NOT whoever calls you that day or has flashy adverts in the local paper. Flashy marketing does not equate to expertise or professionalism. Therefore choosing a Debt Counsellor is like picking a doctor you can trust your life too, because you’re entrusting your financial life in their hands.

With over 11 years of specialized experience in the debt & legal field Oyisa United Debt Specialists is committed to assisting South African consumers in financial liberation.

OUDS is uniquely placed to tend to your best interests and see that you are financially secure, which you deserve.