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.

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.