Debt is an issue that most South Africans unfortunately find themselves facing for most of their adult lives. Every individual deals with different forms and scales of debt and this also affects them in many different ways. In today’s society, being financially healthy is of the utmost importance and often when debt spirals out of control there are professional debt review services, such as DebtSafe. These services are available to assist with managing and settling any debt scenario as well educating individuals on how to assess their own situation.
Wikus Olivier, debt expert at DebtSafe, suggests the following useful tips when managing debt:
Accept your situation
Often times we know that we are in debt, yet we continue to spend recklessly thinking we have everything under control. Taking a step back and examining the reality of what we are faced with can be a sobering experience. As the adage goes, acceptance is the first step toward recovery.
Get the big picture
Once you have come to terms with your financial situation, it is important to access all of your financial documents, agreements, accounts etc., so that you have a clearer understanding of what it is that you owe and to whom. Writing it all out and adding the figures will also aid in breaking the process down and making it more understandable. You can start by downloading your credit report from all 3 major credit bureaus. You will have to pay a fee to download your report but it will give you a clear picture of what your “credit reputation” is. Remember, in order to manage something effectively; you have to be able to measure it.
Make a change
Now that you have evaluated your situation, you need to decide on how you will change your circumstances. Create or rework your budget, trim unnecessary expenses altogether from spending, research cheaper alternatives to existing costs and start gaining more control of your finances. It is here where you need to get creative and have the discipline to follow through on your financial plan. No one said it is going to be easy but it is going to be worthwhile.
Cut off loose ends
First start by bringing any arrear amounts on your debt up to date. Keeping those accounts in arrears will make it difficult for you to make any type of progress. It is also important to then begin settling debts as soon as possible, no matter how big or small. It is often wise to settle all of the smaller debts first. These amounts quickly add up, and can go a long way to reducing pressure and the perceived scale of debt, which can often seem overwhelming. If you are able to settle a debt, irrespective of how big the balance is, it will have a very positive impact on your emotional commitment to get your debt sorted out. Once a start is made, and each step completed, the process gets easier. Having the discipline to carry on month after month is what will bring the breakthrough at the end.
Speak to a professional
If you are able to speak to a professional, it’s a good idea to take your reworked plan to an expert of your choice and gain advice on this. Gaining a second opinion can benefit the way you see things. Should you be experiencing severe distress due to financial problems, it may also be advisable to seek the guidance of a psychologist or life coach.
“Regardless of the amount of debt individuals find themselves facing, it is never too late to get on the correct path to changing your situation. Choosing to follow these simple and practical steps can assist you in beginning your journey to a debt free future,” concludes Olivier.
