Slaves to society's greed.
Never spend more than you can afford
If you can't afford it - you shouldn't buy it.
You'll end up having to borrow against your overdraft, credit cards or perhaps ultimately even from friends to pay your debt - making more debt in order to pay off debt.....
that is ridiculous, isn't it?
Yet, so many people do just that.
Decide today - right now that you will not buy anything on credit anymore and that if you can not afford it, you will not buy it.
Save up for it instead - you'll appreciate it so much more!
Admit you have a problem
Ignoring the fact that you have debt - won't make it disappear.
You need to face it as soon as possible.
Make a list of all your debt so that you are clear on how much you owe.
If possible, consolidate your debt by taking out one loan at your bank in order to pay off all your other loans. But make very sure that your bank offers you a better interest rate - compared to your other loans.
Keep a "spend diary" in order to keep track of all your minor spending:
- snacks ;
- chocolates and crisps ;
- or cappuccinos with the girls.
You’ll be surprised how quickly it all adds up.
Now make a list of all your unnecessary expenses:
- books ;
- parties ;
- clubs ;
- alcohol ;
- book club ;
- or a gym membership.
Decide what you can give up and where you can cut down.
Remember - every bit that you are able to save must go towards paying off your debt!
You must try and kill this "debt monster" as quickly as possible before it devours you.
No retail therapy
Another "baddy" in my book is impulse buying.
Do you spend money, when you feel depressed, because you are bored or just before "that time of the month"?
Make a note of how you feel after spending money you didn't really have.
Did it ultimately help you feel better?
Well, the only solution for me was to stay away from the shops and to visit a close friend who was aware of my battle.
After about 6 months the cycle was broken and I can safely say that I no long "impulse buy".
Budget, budget, budget
Alright. No you know:
- how much you need to pay every month toward your debt,
- how to control your need to spend (stop retail therapy in its tracks),
- and you're more aware of your other bad spending habits.
It's time to draw up a budget.
List all your expenses. This includes:
- Loan instalments,
- Rent or bond repayments,
- Car loan
and more - here is an
example of a budget
I drew up.
If your expenses are more than your income, then you will need to find ways to
. Apart from these cost cutting tips, you can also cut costs by:
- Getting rid of your credit card or at least by leaving it at home whenever you go out.
- Trying to get a better deal on your household and car insurance, your bond costs and even on your mobile phone contract.
- Spending less time on the phone talking and by texting more.
Plan ahead and Save
Last but not least.
There is something exhilarating in the knowledge that you have a bit of money saved up somewhere.
It will come in handy for those unexpected expenses like:
- a new car battery,
- Dentist appointment,
- or even a broken window.
Plan ahead by also putting money away for your retirement. Put it in a Retirement Annuity so that you can not access it before you reach retirement age.
Yes - I can hear you say "but I am only 27" or "I am only 34" - but experts will tell you that you need to put money towards your retirement early, so that you would be able to maintain your lifestyle when you are older.