So, take a good look at your debt orders, are there things on there that you don’t use? That gym membership that you keep promising yourself you’ll start using again next month? The streaming subscription you keep because “it’s so cheap”? Each of these small outgoings can amount to a sizable saving every month.

While you’re accessing your bank statements, take a look at your day-to-day outgoings. If you can, print out a monthly statement and highlight transactions such as takeout coffees, meal deals or fast food and snacks. Once you’ve done this for the whole month, add them up and see how much you’re spending each month on these unnecessary purchases. You may find that cutting down on takeout food and drinks throughout the week can save you between R800-R1,000 per month! Try repeating this exercise with other spending, such as unnecessary purchases of clothing, shoes and any other luxuries, such as nights out and weekends away. Soon you’ll have spring cleaned your way to a much healthier bank balance!

How to Avoid Debt Using a Budget

You don’t have to already be in financial difficulty to create and stick to a budget. Budgeting is great for all sorts of circumstances, whether it’s to save up for something special or just to keep a close eye on your income and expenses.

If you’ve taken the first step by spring cleaning your finances, putting a budget in place will help to ensure that your bank balance remains healthy and that you always know what is going in and out. This means that there will be no surprises, and you’ll be less likely to fall into debt due to overspending prior to unexpected payments. If you need some extra guidance, read our previous blog on how to manage your money efficiently.

How to Avoid Impulse Purchases

It’s human nature to see something we like and have to fight the urge to buy it there and then. A great tip is to “give it time”. Often, we see something that we think we couldn’t possibly live without, but a week or a month later, we’re not so fussed. Giving it time means leaving the shop or closing your browser and walking away. After some time, a week or even a month, if you still feel that you could benefit from the purchase, then take a look at your budget and see if you can afford it.

Retailers know that they can benefit from impulse purchasing. When in-store or online, you will see flash sales and limited-time deals. While these are great news when you’re purchasing something you genuinely need and can save you a lot of money, they are not necessarily limited. The law states that to be classed as a “sale” or “offer”, an item must have been full price for a “meaningful amount of time”. So, that new item you simply NEED to buy this week because it’s 20% off in a flash sale was probably only full price for one month of the year. And when it’s full price again, a similar one will replace it in the sale. 

Steps to Take before Applying for Credit

If you’re considering applying for credit to make a purchase, there are a few steps you should take before doing so to avoid getting into more debt than you can afford.

1. Go back to the beginning of this blog and take the steps to spring clean your finances. Check your income and expenses to be sure that you can afford the items you are about to purchase.
2. Wait a while. As suggested earlier when discussing impulse buying, take some time to think about whether you really need the item. Sometimes, after a few days or a week, you can feel very differently about it!
3. If you already have debt, take a look at the agreement term and see if it is ending soon. If you only have a few months left of payments on a loan, can the new purchase wait until then, when you have more affordability?
4. If the new purchase is a long-term agreement, can you guarantee that your financial situation will still be the same in four years? Just because you can afford payments now, it doesn’t mean that you will be able to do so in the future, so think carefully about your financial stability.

When all is said and done, managing debt can be difficult. If you have found yourself in a situation where debt is becoming too much to handle, contact National Debt Support today. Our friendly and professional guides can help you to assess your situation, see if there is a debt solution that could benefit you and get you on the road to financial freedom.

Getting your finances under control and relieving yourself of suffocating debt stress is possible. With National Debt Support, you can find 7 ways to deal with debt stress, you can take back control of your life and start planning for a financially-free future today. 

1. Make Healthy Life Choices

Sometimes when you get into seriously stressful situations, it is easy to let it get the better of you. The all-consuming problem of debt stress can mean that you stop doing things for yourself, like staying active and having a social life. 

When you are dealing with stress, it is important to keep up some levels of exercise. Exercise offers many health benefits — and it pumps you full of “feel-good” endorphins, stopping you from focusing on your financial troubles. 

Maintaining an active social life should also be a priority when dealing with stressors. Debt can already leave you feeling alone and the last thing you want to do is isolate yourself from your friends and family. It is always a good idea to confide in those around you and never be afraid to ask for help if you need it. And maintaining contact doesn’t have to cost the earth – a phone call to check in, an invitation for a catch up or meeting for a quick coffee all make a difference, and all can be relatively inexpensive.

Finally, never turn to coping mechanisms like alcohol — an expensive way to dull the senses that will only exacerbate your anxiety. You will feel so much better if you can be kind to your body and maintain a healthy lifestyle.

2. Understand When Stress Is Getting to You

Although stress is something we all experience, many people struggle to spot it or even understand it. It is therefore important to look for signs that you could be experiencing an unhealthy level of stress and anxiety. The following signs are a major indicator of debt stress:

• The thought of debt makes you feel ill
• Your sleep pattern is impacted and you find yourself feeling exhausted
• You don’t want to see or speak to friends or family
• You struggle to concentrate on tasks at work 
• You feel overwhelmed.

3. Accept the Situation

When struggling with debt, there is nothing to be ashamed of. Even today, there is sometimes a stigma attached to debt when it is a problem that will impact many responsible, good people. Debt is extremely common, with over 10 million South Africans estimated to be over-indebted, you are not the only one who is struggling with debt. This is why accepting your situation and taking action shouldn’t be something to be ashamed of. 

When accepting the situation you are in, it is also important to try and take as much responsibility as possible. Accepting responsibility for your debt can help you overcome the issue and empower you to take action.

4. Seek Support

If debt-related stress is getting to you, you must get support. If your friends and family can’t help you through this difficult time, you should consider getting in contact with National Debt Support.

If you have been dealing with anxiety and stress and you cannot see the light at the end of the tunnel, it is important to get medical help immediately and contact your local GP. Your doctor can offer advice and point you in the direction of psychological therapy services near you. It is important to know that there are many people and services out there to help you.

5. Get Professional Advice

Remember that you don’t have to do everything by yourself. We know financial problems affect good people and here at National Debt Support, we are here to help. We offer professional debt advice and solutions that will help you take back control of your finances.

With National Debt Support debt guidance, you will find all the information and advice you need to manage your debt and start making better financial decisions. 

 6. Put Debt Stress in Perspective

Money isn’t everything and even when it feels like it is, it is important to realise that the worst-case scenario isn’t that bad and that many others before you have faced the same challenge but tackled it and are on the road to financial freedom. Also remember, you won’t be the last person to encounter financial difficulty – and by taking action you may be able to offer support to someone else in the future, as someone who has been there and understands first hand. National Debt Supportis able to provide you with advice.

7. Make a Plan

Finally, it is important to come up with a plan to manage your finances. Take a look into your finances, try to figure out where you can save money and how you can possibly earn a little extra income on the side. 

Budgeting is a great way to keep track of your finances and understand what you can afford to repay. Once you start taking control of your finances, managing that debt doesn’t look like such an impossible task. Check out National Debt Support budgeting tips and learn how to be smarter with your money.

Although the global pandemic has had a huge impact on everyone’s finances, debt stress is something that no one should suffer. Be aware that your money worries are not unusual and you shouldn’t be embarrassed to ask for help. It is important to remember all the things you can be grateful for and know that help is always at hand.

Are you struggling with debt stress? National Debt Support can help you manage your debt with a Debt Review. Request a free call back today and feel the weight lifted from your shoulders.

What Is Good Debt?

Good debt is a debt that will benefit your future or enable you to become financially better off further down the line. For example, a sensible investment such as a mortgage to purchase a home or as a solid investment is good debt. Mortgages are often cheaper per month than rent, and once paid off, the home is yours and you can live mortgage/rent-free. Additionally, when purchased as an investment, you can even make money by selling the property further down the line.

Student loans are also considered good debt. Graduates have far better job prospects and a higher likelihood of earning a bigger salary. The same goes for investing in other kinds of further education or training courses.

If you run or own your own business, investing in it so that it can grow would be considered good debt too. If you have a solid business plan and put in the hard work needed for it to become a success, your business could eventually be worth a lot more money than the loan you originally took out to expand it.

What Is Bad Debt?

In contrast to those good debts, bad debt is one that drains your resources in repayments, will not “pay for itself” in the future and does not benefit your professional development. Bad debt may even put you in a position whereby you cannot afford your usual lifestyle or default on usual bills due to the unaffordable repayments.

Debt is usually considered to be “bad debt” when it is unaffordable to the individual. Many unnecessary items — such as cars or luxury holidays — are also considered bad debt because they either depreciate in value immediately or hold no value at all. However, the kind of debt that is considered a real “no-no” is borrowing money to repay debt, unless you consolidate your debts and no longer spend on the lines of credit you have cleared. If you are struggling to reach the end of every month and have tried budgeting to no avail, take a look at our information on Debt Review or contact us for more information.

How Much Is Too Much Debt?

A great way of keeping an eye on your finances, and whether you should apply for that credit purchase or save up for it the old fashioned way, is to work out your debt-to-income ratio (DTI).

A debt-to-income ratio (DTI) is one of the many factors that lenders look at when making a decision on your lending criteria. But it’s not just lenders that should be interested in this. Your DTI will help you to monitor your income and expenses, get a better understanding of where you may need to cut back and where you may have some flexibility!

How to Work Out Your Debt-to-Income Ratio (DTI)

1. Add up all of your monthly debt payments. This should include mortgage payments, loans, store credit, student loans, credit cards and any other form of debt. It may be a good idea to add an estimated payment amount for a loan you are considering to this total. This way, you will get a true reflection of your DTI after this new debt is added.
2. Now add up your total income. Include your gross monthly income, any child benefit and anything earned through freelancing.
3. Divide your monthly debt by your monthly income and multiply by 100. The result is your DTI as a percentage

Income ÷ Debt x 100 = DTI

Debt in South Africa

An April 2020 report from TransUnion provides context as to how much South Africans owe on outstanding loans.

The report shows that:

• The average South African owes R19,265 on their credit card account, while the average credit line (the amount of credit a person may borrow from) is R32,973.
• The average outstanding amount on home loans is  R514,938.
• The average outstanding amount in vehicle financing loans is R187,193.
• The average outstanding amount on personal loans is R36,835.

If you are concerned about your level of debt and your ability to keep up with your repayments, don’t hesitate to contact National Debt Support today to chat with one of our friendly advisors, who will assess your situation and give professional, non-biased guidance.

How to Manage Debt

Sometimes, managing debt can be easier said than done. There may have been some unforeseen circumstances such as a job loss or a relationship breakdown, or you may have had to borrow more money than you intended due to an unexpected expense.

Take a look at our budgeting ideas to get top tips for managing your money to get yourself back on track. If you would like further information or guidance, request a free callback to speak with one of our expert guides today.

How to Get Out of Debt

If Debt has become a problem and it has gotten to the point that you are missing payments or being chased by debt collection agencies, contact National Debt Support today. Our friendly expert guides will help you to understand your options when it comes to managing your debt and whether you could benefit from Debt Review. So call today and begin your journey to financial freedom

Just as you have to take care of your physiological health, you also need to take care of your financial health. Our financial health is something that we simply cannot neglect as the consequences could be detrimental. The good news is that it’s never too late to start looking after your financial health!

Tips to help you manage your money

• Track your spending

If you don’t know what and where your money is going each month, then your personal spending habits probably have some room for improvement. Understanding your spending habits can be a simple process, there’s no need to manually record each purchase, there are apps for this that can make your life a lot easier. Furthermore, there are also a number of banks that offer this service for free if you use one of their transactional accounts or debit cards. This way, you can see exactly how much you are spending on each category (for example: groceries, transport, clothing) on a monthly basis. 

• Create a realistic monthly budget

Use your monthly spending habits, as well as your monthly income, you can now set a budget! We know that creating a budget may seem quite daunting at first, but it’s necessary to get your financial health in order. Having a budget in place is vital as it allows you to see exactly where your money is going and where you can save. It’s often the small purchases that can add up quickly, so it’s important to leave some room in your budget for the little ‘unexpected’ purchases.

• Build an emergency fund

An emergency fund is an essential safeguard against any unexpected expenses. If the pandemic has taught us anything, it’s to always be prepared for the unexpected. Having an emergency fund can save you a lot of money, and not only that, it can help you avoid going into debt! Unexpected expenses can be BIG, and when they catch you off guard, you won’t be smiling. Vet bills, vehicle repairs and job losses are among the things many of us simply don’t budget for and if you don’t have an emergency fund, you’ll land up having to resort to credit cards or high-interest loans. Emergency funds are especially important if you have debt, as they can help you avoid borrowing even more money. At a minimum, it is recommended to have at least three months (this will take time to accumulate) worth of living expenses saved in your emergency fund. However, the more you can save, the better.

• Control your debt

Debt makes it incredibly difficult to manage your money efficiently, so it’s important to get it under control and paid off as soon as possible. You don’t want to get caught in the debt trap as this will lead you to take more loans to help you with your repayments. A great way to get on top of your debt is to prioritise them in terms of which is more important.

At National Debt Support, we know that bad debt happens to good people. If you’re struggling with bad debt, we are here to help you! Request a free call back today and feel the weight lifted from your shoulders.

The National Youth Development Agency (NYDA) yearly acknowledges June 16th through its Youth Action for Economic Freedom in Our Lifetime program, which was created to address the challenges faced by our nation’s youth such as educational, environmental and employment development. South Africa currently has the highest unemployment rate in Africa for 2023, with 30% of the country’s labour force being unemployed. As discouraging as this may sound, there is still reason to be optimistic about the future, through strategies for improving youth inclusion and employment. National Debt Support discusses strategies to increase youth empowerment in ways that both businesses and young people of our nation can benefit. 

Employment versus Employability 

Many entry-level job opportunities offer little skills training or career development and are either casual or part-time, but require a minimum of three years experience which leaves youth with little to no real opportunities to gain the experience they require. Here’s how to potentially combat this trend: 

1. Entrepreneurship – With the right knowledge and skills, entrepreneurship can be a powerful tool in fighting youth unemployment, as it is about creating value in business solutions in methods that have not been done before. This kind of thinking should be encouraged by businesses and business owners, by giving employees an environment that inspires new ideas and the resources to implement them. Upskilling youth to adapt their approaches to different scenarios that are socio-economic, will not only benefit the business itself, but could help change the unemployment cycle long term. 
2. On-the-job training and learning – Young employees could benefit from this strategy and enforce long-term success of the business by growing the skills needed in the workforce of tomorrow. As daunting as working and training at the same time might sound, the practice encourages skills such as working well under pressure, critical thinking and problem solving; which ultimately creates work efficiency for both employee and business
3. Mentorship – From the perspective of leadership development, mentorship is beneficial to both senior and junior employees, as it promotes diversity in a business for problem solving and innovation. When mentors and students collaborate to share their ideas, experience and skills, businesses can benefit from fresh ideas and new perspectives while the youth can benefit from informed knowledge received from their mentor – this creates productivity in the work environment
4. Creating employability programmes – Young people are incredibly disadvantaged by the no-job no-experience cycle, as they continue to struggle with finding meaningful employment and even when they do, it is affected by lower-wages, substandard prospects and strained mental health. Employer-led programmes are a great way to develop pipelines for talent and prepare businesses for the future. 

How Businesses Can Benefit From Hiring Youth

Many businesses are not open to the idea of hiring youth due to persuasive stereotypes and narratives that they lack loyalty and are unmotivated (especially considering conversations around Gen Z), but there are many benefits that businesses can gain from this. Here are the two most important: 

1. Secure workforce for the future – Hiring young people is a cost-effective approach to develop a company or a business over time. Younger people have more willingness and capacity to learn than older people, with higher attitudes of optimism and motivation. This encourages a business’ talent pipeline and strengthens the company brand. 
2. Business Tax Aid – Did you know that businesses can receive a tax benefit for hiring young people? SME tax benefits offer an Employment Tax Incentive (ETI) that reduces an employer’s overall pay-as-you-earn (PAYE) contribution without interfering with an employee’s earnings. The ETI rewards businesses for hiring young people, and in return, they gain valuable experiences and make a living. 

Are you still unemployed?  

If you are still in the slug of applying for jobs and getting rejected, or a business owner looking for ways to expand and grow. Here are some ideas that can help get things going: 

1. Online Upskilling courses – Did you know that Google provides free online courses? There is a wide range of free online learning content that is curated to help kick-start your career or boost your business. You can make use of individual modules or end-to-end courses then attain a Google Certificate upon completion. 
2. Social Media – Social media has a huge presence in the employment and recruitment sector. If you enjoy and are skillful at using social media, use this as an opportunity to build a strong profile on platforms such as LinkedIn, PNet and Indeed to improve your employment prospects. LinkedIn can be used to make content to shine a light on your best skills. You will also get notifications from recruitment agencies looking for prospective candidates that fit their criteria
3. Network – Is there an industry or profession you are interested in? Start networking. To grow a network, you can join online forums and groups dedicated to the industry then offer to help others, answering questions and making contact with people. You will be the first to know of any upcoming jobs in the industry and have credible references or mentors. 

To put it simply and directly, youth are the future – not only for our country, but for the world. Employment opportunities provide more than experience and an income, but also teach the youth about things that matter, such as financial guidance, cost of living, debt in South Africa and money management. 

If you are struggling with debt and thinking about entering into debt review, National Debt Support is here to offer you non-judgmental debt advice and financial guidance. Request a free call back today with our understanding and caring team. 

Which debt should be a priority debt?

If you’re wondering which debts should be a priority, start by considering the type of debt you have. Generally, a secured debt will always be more of a priority than an unsecured debt. This is because failing to make repayments on secured debt can have severe consequences. If you don’t make repayments on secured debts, you risk losing the assets that they are linked to, such as your home or car.

To help you prioritize your debts, we’ve compiled a list of priority debts and their consequences. Keep in mind that this is just an example and may not accurately reflect your specific situation. It’s essential to analyze your debts individually and work out your unique priority list. By doing so, you can manage your debts effectively and minimize the impact they have on your financial well-being.

Priority List:

Debt                                                   Consequence

Should you consider the size of your debt?   

When prioritizing your debt, it’s crucial to consider the size of each one. Although it may be tempting to focus on reducing larger debts by paying more than the minimum monthly payment, this approach may not be the best long-term solution. Instead, it’s recommended that you pay off your smaller debts first, particularly those with higher interest rates such as credit cards and store cards.

By tackling these high-interest debts first, you can save money on interest charges in the long run and free up additional funds to put towards your larger debts, such as unsecured loans. These types of debts are designed to be paid off over a more extended period, so it’s okay to continue making minimum monthly payments on them.

However, if you come into some extra cash, it’s wise to use it to pay off smaller debts first before applying any additional payments to your larger debts. This strategy will help you save more money in the long run and pay off your debts faster. When prioritizing your debt, focus on paying off smaller debts with higher interest rates first. Then, once those are taken care of, you can allocate additional payments towards larger debts. Remember that paying off debt is a long-term process, and it’s important to be patient and persistent in your efforts to become debt-free.

What to do if you are fall behind on payments

If you are in a difficult situation where you simply cannot afford to keep up with your minimum monthly repayments for all of your debts, you need to seek debt help now. 

Consequently when debt is unmanageable, there are debt solutions that can help you to regain control of your finances. No matter what level of debt you are in, there is always a debt solution for you. Take a look at our website for information on the various options available to suit your needs or request a free callback for impartial debt advice.

At National Debt Support we know that bad debt happens to good people. Our goal is to help you move out of debt and become financially free. Our team has helped thousands of people become financially free. Request a free callback to discuss your debt.

Setting your goal is the easy part, knowing how to get there can be a little more difficult. So take a look at how to make a budget with our budget planning tips below and start budgeting your way toward your goals.

How To Make a Monthly Budget

Before you begin, follow these steps to prepare your monthly budget;

1. 1. Calculate your monthly household income. Don’t forget to include alternative income such as a pension, spousal or child maintenance. If your income has been reduced recently or is expected to be, ensure you use the lower figure.
   2. Identify your priority bills. Priority bills include rent/mortgage payments, utility bills, other payments that carry serious consequences if left unpaid.
   3. Calculate your fixed outgoings. These should include your priority bills and any other fixed monthly payments that you need to pay, such as debt repayments, mobile phone bills, car repayments, Dstv subscriptions, etc.
   4. Calculate your non-monthly fixed outgoings. This is  where many people fall short when trying to budget. There are often payments that we make throughout the year regularly but not monthly. These can include car services, childcare, school uniforms etc. Once calculated, divide the total by 12 and you have your monthly total.
   5. Calculate your regular monthly spending. This is the other tricky one. Often when creating a budget it can be difficult to remember all the small everyday costs. It helps to go over historical bank statements or receipts to get an average amount. Always round up to give yourself a buffer. These outgoings can include food shopping, clothing, hobbies, fuel etc.

How to make a budget In Excel or Google Sheets

Making a budget in Microsoft Excel or Google Sheets is an excellent way of keeping track of your income and expenses as well as having historic, easy to view payment tracking. This enables you to be able to look at where you could be saving money, it will also flag up any inconsistencies or problems with your finances earlier.

Budgeting Your Way through Short Term Income Changes

Here are some top tips for cutting back on daily and monthly expenses;

1. 1. Batch cook. Cooking large quantities of food and freezing it in batches can really cut costs and reduce waste.
   2. Fakeaways. Instead of ordering takeaways or eating out, try creating your own Indian or Chinese ‘fakeaways’. BBC Good Food has some great recipes for budget meals and fakeaways all organised into handy collections.
   3. Cancel unused memberships and subscriptions. If you have a gym membership that you just don’t get value from or a subscription to a magazine or other publication…cancel it. You can always rejoin or sign up again when you can afford to do so.
   4. TV & Entertainment. Do you have a subscription to a music service or TV streaming service? You would be surprised by how much you could save each month by cancelling or downgrading these subscriptions until your situation improves. There are free options for music streaming available (that may just have additional adverts) to use in the meantime.
   5. Coffee. Many people list coffee as one of their biggest unnecessary spending habits. That daily coffee on the way to work or at lunch can mount up to a lot of money per month. If you spend R30 per coffee five times per week, that’s R600 per month. Invest in a good reusable coffee cup or flask and make it at home for the car journey, you’ll be surprised how much you can save!

At National Debt Support, we know that bad debt happens to good people. We specialise in Debt Review and make it our mission to rescue people who have found themselves in financial difficulty. Our qualified debt counsellors have used the Debt Review process to help thousands of people manage their debt and find financial freedom. Let us help you on your journey to financial freedom.

Here at National Debt Support, we understand that debt is difficult to deal with both financially and emotionally. It can sometimes feel like an isolating experience you want to keep secret, but it is essential to remember that nothing is embarrassing about financial difficulties. At National Debt Support, we understand that bad debt happens to good people, and that is where our expert advice and professional services can help lighten your burden.

As we start to see the beginning of the end of the coronavirus pandemic, now is the time to regain control of your financial future and follow our 6 tips for getting out of debt.

1. Write down Your Debts and Prioritise Them

The first step to tackling your debts is to make a note of all the money you currently owe. This can seem like a daunting task but believe us, facing your responsibilities head-on is the only way out of financial difficulties. It is also essential to write down all the money you currently owe so that you can keep track of it all and not miss your repayment periods.

Prioritise debts that need to be paid back first, once you have a record of them,  work out which ones you have a little more wiggle room with.

Prioritising your debts doesn’t just mean paying back the largest amounts first. Instead, make sure that you keep up to date with important payments like your rent, mortgage or utility bills to ensure that you continue to have a roof over your head, water and electricity.

Next, you should pay off the debts with the highest interest rates to not pay back way more than you have to.

2. Make a Budget or Spending Plan

It is important to know exactly how much money you have coming in and how much is going out. It is usually due to poor budgeting that many people find themselves in debt in the first place.

Once you understand your finances, you can start making a budget or a spending plan. Look at your income and try to find ways to limit your spending. Is it possible to cut down on your phone bills or morning coffees? If so, this is a great place to start. After that, you can look around for cheaper alternatives to the services you already use. Many of us don’t even realise that we are paying more for our utilities or television plans than we need to be.

Developing a smarter spending plan will leave you with more cash in your pocket at the end of the month.

3. Look for Extra Income

If you find that your regular income doesn’t cover your outgoings, it might be an excellent time to explore the option of gaining an extra income.

You can do this in a couple of different ways. First of all, you can look to work more hours or pick up another job on the weekends. This could be a huge help for many people when getting out of debt, even if it is just a short term solution that could stop you from paying large amounts of interest.

4. Take Care of Your Mental Health

Although it may not be a tip for getting out of debt, it is of the utmost importance to remember to look after your mental health and emotional well-being if you’re suffering financial difficulties.

It is common for people to feel a considerable amount of shame and isolation due to debt stress. Debt, however, is not something to feel embarrassed about. Make sure you get professional medical help if you find it too much to cope with, and continue making healthy choices, such as meeting up with friends and family and maintaining your exercise routine. Only when you are in a good place mentally will you be successful in getting out of debt.

5. Get Professional Help

It is always okay to ask for help. However, getting out of debt can be complex and sometimes, professional experience is required. National Debt Support can offer expertise, debt guidance and solutions to help you take back control of your financial future.

6. Consider Your Debt Solutions

Debt Review

Debt Review is a government legislated process that forms part of the National Credit Act 34 of 2005 (NCA) which was created to help and protect people who are struggling to meet their monthly debt repayments.

Under Debt Review, your debt counsellor will formulate a new affordable monthly repayment plan by taking into account all of your income and expenses. Your debt counsellor will then negotiate with your creditors to reduce your monthly repayments (in some cases by up to 50%). Your debt counsellor will aim to ensure that your interest rates, as well as your monthly repayments are reduced, helping you pay back your creditors and become financially free within a period of 60 months or less.

Debt Review enables you to manage your costs of living and regain your financial freedom. Read our blog explaining all of the benefits of Debt Review.

If you are struggling to pay your debts, National Debt Support is here to help you manage your debt. Request a free call back today and learn how to manage your money better.

What’s the difference between “good debt” and “bad debt”?

Good debt is debt that is used to enhance your wealth. You may take out a loan to purchase something that will boost your monthly income, or its value may increase over time, allowing you to make a profit if you sell the item in the future. In addition to this, good debt may be viewed as a loan used to acquire something that has a productive value, such as buying a car to travel to work and supporting your family.

Bad debt, then, is the opposite of this. Bad debt is debt used to purchase something that will not enhance your income, will not grow in value over time, and has little to no productive value.

Sometimes, it’s not always crystal clear. What bad debt is for some may be good debt for others. For example, buying a gaming console and some video games on a store card would be bad debt.

But if that same retailer bought a large number of consoles and games from a warehouse on credit to sell in the shop, that would be good debt. Why? Because the retailer will likely make a profit on those items, allowing them to clear their debt with profit left over.

This is the essence of good debt: it is debt used to generate future returns. Other forms of good debt may include a mortgage to buy a house; a loan to start or invest in a business; money used to invest in commodities or financial assets; and money lent to businesses for an agreed interest rate, such as peer-to-peer lending. All these types of investing carry significant risks.

An important point to note is that it is only considered good debt if the growth in value or income from your asset outweighs the cost of your loan — if it does not, then it is bad debt because the cost of your loan will be more than what you are making from your investment.

What Is Problem Debt?

Problem debt is when your monthly income struggles to meet your monthly outgoings. No matter how much we earn, whether it is R1,000 per week or R5,000 per week, there will always come the point when debt becomes a problem.

If you find that a large part of your income goes straight back out to pay off your recurring debt, this is problem debt. The best solution is to pay this down as quickly as possible. The issue with problem debt is that it can quickly spiral out of control — it may only take a one-week holiday and a few missed payments for your debt to become unmanageable.

Your debt can also be considered a problem if it impacts your well-being. Debt can affect us all differently; some of us can feel comfortable owing quite large amounts, others can feel stressed and worried over the smallest amount. Therefore it is important to consider how you respond to debt.

If debt makes you feel stressed and worried, then clearing your debts may be the best option to take that worry off your mind. If you are comfortable with debts, you will also need to be very cautious because you may allow yourself to take on too much of a burden.

How Do You Deal With Debt Problems?

One of the best ways to start resolving debt problems is to begin tracking your monthly financial inflows and outflows. It is easy to lose track of what you are spending, leaving you with the impression that you have not overspent. This could be a justification for purchasing that dress or that new phone on your credit card — but if you were aware of precisely how much you had spent, you might think twice.

This is why tracking our finances is so helpful. It puts us in control, like a business finance manager, allowing us to scrutinise every expense. Instead of basing your spending on a whim, base your spending on a budget, this is far more productive. You can set aside precisely what you need for your bills, for shopping, and even for savings and investments.

How Much Debt Is Normal?

Some people have a lot of debt, some people have little debt, so there is no normal amount of debt. A better question to ask is, what is a reasonable or manageable amount of debt?

When you apply for a mortgage, one of the things the bank will want to check before accepting your application is affordability: based on your current income and expenses, would you be able to pay the additional cost of your mortgage each month?

You can use a simple ratio to figure out what percentage of your monthly income goes towards recurring debts. It is called the debt-to-income ratio, and it works like this: recurring monthly debt / gross monthly income = debt-to-income ratio.

For example, let’s say you pay R10,000 per month on your mortgage, R3,000 on your car loan and R3,500 on credit cards, and you earn R25,000 per month.

(10,000 + 3,000 + 3,500) / 25,000 = 0.66

This means that 66% of your income is being spent on recurring debt. Keep in mind that there will be other monthly expenses, such as food, clothing, household bills, car fuel, and repair bills, which vary from month to month.

Most financial advisors recommend that a good percentage is 35% or less spent on recurring monthly debts. If your debt-to-income ratio is higher than this, then it is best to try and get it down as soon as possible.

Where Can You Get Help If You Have Debt Problems?

At National Debt Support we understand that bad debt happens to good people. We know the stress, anxiety and sleepless nights which come with being overwhelmed by debt.

Our commitment is to provide the best service to our clients, helping them to manage their debt, showing compassion and earning their trust. We journey together with our clients guiding them to their financial freedom, so that they can live their best lives again.

We have a team of well-trained debt experts and debt counsellors ready to assist our clients in securing an affordable, personalised, monthly payment which will cater for all accounts. Through Debt Review, a government legislated process that forms part of the National Credit Act, we help South Africans reduce their debt repayments by up to 50%, end debt collector harassment, and legally protect their assets from repossession.

Call us on 031 010 0509, or request a free call back.

What exactly is Debt Review?

As mentioned above, Debt Review is a government legislated process that forms part of the NCA which was created to help and protect people who are struggling to meet their monthly debt repayments.

Under Debt Review, your debt counsellor will formulate a new affordable monthly repayment plan by taking into account all of your income and expenses. Your debt counsellor will then negotiate with your creditors to reduce your monthly repayments (in some cases by up to 50%). Your debt counsellor will aim to ensure that your interest rates, as well as your monthly repayments are reduced, helping you pay back your creditors and become financially free within a period of 60 months or less.

Debt Review enables you to manage your costs of living and regain your financial freedom.

Below, we look at the advantages of Debt Review:

The Benefits of Debt Review

• Legal protection from creditors 

Once you are under Debt Review, you and your assets are legally protected from repossession by the NCA. This means that your creditors cannot hassle you by calling and demanding payment. Your creditors will be legally required to communicate with your debt counsellor and may not contact you directly.

• One fixed monthly payment

Your debt counsellor will negotiate with all of your creditors and formulate a single, reduced monthly payment. This means that you will no longer have to make multiple payments to your creditors. You will only be required to make one fixed monthly payment , which will then be split across all of your creditors by your debt counsellor. What is important to note, is that this fixed monthly payment can be reduced by up to 50% of your previous combined monthly repayments.

• You won’t pay more than you can afford

One of the main goals of the Debt Review process is to help you pay off your debt whilst enabling you to manage all of your other living expenses. This means that your budget will meet your basic needs first before provision is made for your debts.

• No blacklisting 

Whilst under Debt Review, you are protected by the NCA from being blacklisted. The credit bureaus cannot blacklist you and once you have completed the Debt Review process, there is no permanent record indicating that you have ever been under Debt Review.

• No up-front fees

With Debt Review, there are no up-front fees. Your debt counsellors fees are included in your single monthly payment. Debt Review fees are regulated by the National Credit Regulator (NCR) so the fees will generally be the same for all debt counsellors.

At National Debt Support, we know that bad debt happens to good people and that most of the time it is unavoidable. Our goal is to help you on your journey to financial freedom. Our debt counsellors have used the Debt Review process to help thousands of people manage their debt and find financial freedom. We are here to support and guide you through the Debt Review process so you can rebuild your finances. All you need to do is contact us, and then we will guide you through the process.