With the interest rates continuously rising, more and more South Africans are struggling to keep up with their debt.
Recent stats have revealed that many South Africans spend 65% of their net income on servicing debts. The snowball continues to grow, leaving more South Africans struggling to make ends meet.
The Debt Snowball
A recent survey about income distribution revealed how South Africans are taking on their current debts.
On top of that, the Reserve Bank notes that with the combination of greater debt and interest rates, the cost of servicing household repayments as part of nominal disposable income saw a rise from 7.5% in the third quarter of 2022 to 8.1% in the fourth quarter.
It’s shocking to note that more and more South Africans are relying heavily on their credit cards to get through the month, too. This quick assist solution might seem ideal, but it only works towards building up more debt with added interest rates.
Getting Back To the Green
There’s no denying that, at the current time, it feels almost impossible to service your debt and start saving for your future. Especially considering the current economic environment. While it may seem like an impossible task, it is entirely possible to move forward and get yourself out of the red.
The main thing is that you will need to take a long, hard look at your finances and devise a plan and strategy to make it work for you.
Tips to Get Your Debt Under Control
Vanesha Palani, Executive of Financial Management at Nedbank, shared some tips on how to get your repayments back under control.
Take Control of Your Finances
If you’re not in control of the process, it’s quick to get out of hand and harder to see a reduction of debt. Make the decision to get rid of money owing and motivate yourself to keep the pace of paying off your debts.
Pay More on Debt Than You Owe
Each month, there’s a minimum amount due. It’s better to pay more than the required amount to rid yourself of the debt quickly. It helps to not only eliminate what you owe but to also lower the interest rates. Pay as much as you’re able to snowball the reduction process.
Start with the Higher Interest Loans
It’s always easy to go for the amount you can pay off the quickest. A smarter way to do it would be to focus on getting rid of those high-interest loans first, as they are quite heavy on the pocket.
The more you earn, the more you will be able to pay off over a shorter time period. Look for ways you can potentially make more cash to help pay off large sums quicker. Look for part-time or freelance jobs.
Reduce Your Spending
We all like treats and entertainment, but when you’re dealing with debt, you want to adjust your lifestyle. And focus on what you can cut costs on to increase the amounts you can pay each month. Look for things that are non-essential, like streaming services and other entertainment.
Sell the Clutter
We often have things lying around the house that we don’t use. Instead of letting it gather dust and go unused for another couple of months, start selling these things and use the cash to pay off your debts.
Debtline is Here To Help
If you’ve tried all of these tips and you’re still struggling, let Debtline be the help you need. When undergoing debt review, you can work with a professional to create a plan that leads to being debt-free.
Debtline can assist in cutting down the percentage you spend on repayments monthly. We are a professional debt counselling firm that helps South Africans.
NCR-registered counsellors are available to assist with creating manageable repayments, provide expert advice, and offer protection during the debt review process. Contact the friendly support team at Debtline for assistance in cutting back on your repayments today.