FEATURE
Although Halloween may not be as popular in South Africa as it is in other parts of the world, there is a new monster called “skoloto” (debt) that is keeping consumers awake at night. Many people are tormented by skoloto. But it’s a nightmare that can be overcome.
Even on a low income it’s possible to control debt or to get out of debt. Managing your debt is all about taking control of your spending behaviour by changing your mindset. That doesn’t mean it’s easy, of course, but it does mean that if you are determined to overpower this nightmare, you can. Commit to making whatever lifestyle changes are necessary. Start living within your means. If you have to use credit, use it responsibly and draw up a budget and most of all stick to it.
If your debt problem is severe and you are being threatened with demand letters, you need to obtain a full report that shows all your debt. This can be extracted from any of the major credit bureaus like TransUnion, Compuscan and Experian for free once a year and will give you a clear indication of how much you owe.
Here are eight tips that will help you to defeat your debt:
1.Be honest with yourself, track your spending patterns by analysing your bank statements, and draw up a realistic monthly budget that reflects the reality of your situation.
2.List your expenses according to your needs, not your wants. This will help you to cut out non-essential spending.
3.Don’t go grocery shopping without a list, and be prepared to stick to the list. Also, don’t go grocery shopping on an empty stomach. You’ll be too tempted to buy things that are not on your list.
4.Avoid using rotating credit on store cards for daily essentials; instead be smart about collecting coupons and rewards on loyalty cards.
5.Learn to say “sorry, no” to yourself and your family if it is not within your means to assist. Make sure everyone in your household understands how important it is for you to get out of debt. This might limit the number of loan requests from friends and family.
6.For extra cash, sell items you don’t use or want any more on your neighbourhood Facebook group.
7.Make an arrangement with your creditors. If it doesn’t work, consider consolidating your loans but avoid getting further into debt during this period. If you don’t qualify for a loan consolidation, consult a debt counsellor who is registered with the national credit regulator to assist you with restructuring your debts in terms of the National Credit Act.
8.Take action today to change your behaviour. Procrastination is often your worst enemy and keeps you from taking the small steps that will lead to bigger change.