Many South Africans are drowning in debt, with rising interest rates and inflation exacerbating the situation. If you are struggling to meet your debt repayments, we are here to offer practical solutions and insights to help you regain control of your finances.

In this fifth episode of the Santam Insure your Future Money Bootcamp, I’m again joined by Mapalo Makhu to look at some smart strategies to manage your debt.

This episode emphasises the importance of understanding your debt situation, including all the interest rates, fees, and credit insurance associated with it. We discuss the shock many people experience when they fully grasp the extent of their debt and how to move forward from that realisation.

One effective strategy we explore is the snowball method, where you focus on paying off your smallest debt first. This approach not only helps you clear debts faster but also provides a psychological boost as you see your debts disappearing one by one. We share real-life examples of how small, consistent payments can lead to significant progress in a short period.

We also discuss the importance of budgeting and finding extra cash within your current spending habits. By making small sacrifices and reallocating funds, you can make a substantial dent in your debt. We share stories of individuals who successfully paid off their debts by cutting back on impulsive purchases and redirecting “lazy money” towards debt repayment.

For those in more severe financial distress, we explore options like debt consolidation and debt review. We explain the pros and cons of each, highlighting the importance of understanding the long-term implications and the necessity of changing spending behaviours to avoid falling back into debt.

Debt consolidation can be beneficial if used correctly, but it requires discipline and a commitment to closing old credit lines. Debt review, on the other hand, is a legal process designed for those who are genuinely unable to meet their debt obligations. We caution against entering debt review lightly and stress the importance of fully understanding the process and its consequences.

We wrap up by encouraging listeners to take proactive steps in managing their debt, such as contacting creditors to negotiate better terms. Another one of our smart strategies to manage your debt is to regularly check your credit reports for accuracy as well as signs of identity theft.

We also share a motivational clip from another mentee, Andiswa, who successfully reduced her debt and started planning for a brighter financial future.

Don’t forget to download our budgeting and credit agreement templates to help you on your journey to financial freedom.