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Video: Create a debt repayment plan

Sep 29, 2020

We often believe that the only way to pay off debt is with a windfall like a big bonus or winning the lotto.

But this thinking gets us caught in an anti-wealth trap. We spend on our credit cards all year and use our bonus or 13th cheque to settle the debt, only to start the cycle again the next year. We are using those bonuses to pay off last year’s spending rather than investing and building wealth.

Rather start a monthly debt repayment plan that combines managing your budget with a disciplined debt settlement schedule.

Understand your total outstanding debt by drawing up a spreadsheet with all your credit agreement information including the outstanding amount, monthly instalment, interest rate, fees and the date it will be paid off.

Rather than trying to increase the repayment amount on each loan, target the smallest debt first. If you can settle one debt quickly it will give you the motivation to keep going and free up more cash to target the next debt.

Let’s assume you have multiple credit facilities and owe a total of R50 000. You have done your budget, cut some spending and freed up R1 000 to use to pay off debt.

  • Retail store account R3 000, current repayment R300 per month
  • Clothing account R7 000, current repayment R500 per month
  • Personal loan owing R10 000, current repayment R650
  • Bank credit card R30 000, current repayment R2 500 per month

You have just paid off R50 000 worth of debt with just R1 000 out of your budget. Remember this only works if you close down the credit facilities as you pay them off, otherwise you will just go back into debt.

You now have no short-term debt and nearly R5 000 to start investing – all without relying on a windfall.

You don’t need a miracle, just discipline.


  1. Hello, I need help with drawing up my budget, I am not an Excel inclined person, is there any chance you could send a template with all the features and points of interest you mentioned that can then be edited.
    That I believe I would be able to work with, I have looked online but most of the budget templates I can see are for Americans.
    Or can you point me to a resource that has such a template?
    Thank you

  2. I really like the debt snowball concept. But how will someone like me who freelance and don’t get a regular income every month go about this?

    • I am a freelancer so I know about irregular income! I have a whole chapter in my book on managing money as a freelancer. Create a basic budget and commit to yourself that when you get income in excess of that a percentage must go to paying off debt – you can then target one account at a time. Keep paying in extra to just one until it is cleared.


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Maya Fisher-French author of Money Questions Answered

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