\u201cIf you feel panicked by the amount of debt you have and you feel you aren\u2019t just making it month to month, it\u2019s best to start taking action soon, because things are going to get tougher before they get better,\u201d said Eunice Sibiya, Head of Consumer Education at FNB.<\/p>\n
Signs that your debt is out of control<\/b> Draw up a list of your debt<\/b> Draw up a budget and prioritise your debt<\/b> Seek professional help if you can\u2019t manage on your own<\/b>
\nThere are a few signs and financial behaviours that indicate that your finances are in trouble or that you are headed in that direction.
\n\u201cTaking out a loan to pay off alternative credit is a sure fire indication that your finances are in shambles.
\n\u201cOther indicators are if you find yourself missing some of your debt repayments and paying a few instead of being able to afford all your debt monthly, then you are in trouble. Also, if you are using credit to finance a lifestyle you can\u2019t afford, you are sadly way in over your head.\u201d
\nThe first step is to recognise that you have a debt problem and commit to sorting your finances out.<\/p>
\nThe first step to take when trying to get rid of your debt is to draw up a list of all your debt and decide which is the most pressing or expensive. Ideally you should aim to get rid of debt with the highest interest rates.
\n\u201cThe higher the interest rate, the more you are paying on servicing the debt.
\n\u201cSo aim to reduce these debts first.\u201d
\nThese debts will include store accounts and unsecured loans, such as credit cards and personal loans.<\/p>\n
\nOnce you have a better understanding of your debt and which is the most pressing, you can now draw up a budget that will allow you to prioritise your \u2018debt crunching mission\u2019.
\nRemember this process shouldn\u2019t cripple the rest of your life. So while the idea is to rid yourself of debt quickly, your budget should be realistic and allow you to still live a comfortable life.<\/p>
\n\u201cIf you are highly indebted and are unable to recover on your own, debt review maybe a solution, however it should also be a last resort.
\n\u201cA debt counsellor will be assigned to you and is responsible for all your finances. However, it still remains your responsibility to keep tabs on the progress made,\u201d she said.
\nUnder debt review consumers are not able to take on any further debt or use credit cards and will need to stick to a very strict repayment process.
\nYou will only be released from the review process once your debt counsellor gives the go ahead, which means you can\u2019t voluntarily remove yourself from the process. Debt review is also not free of charge and costs will differ.
\nFortunately it\u2019s not all doom and gloom, restoring your finances is possible with a few lifestyle changes, and a commitment to the process.
\n\u201cIt\u2019s important to remember that no strategy will work without a healthy dose of self-control and discipline on your part, we all know that you can\u2019t fix a problem with the same mindset or habits that created it.\u201d<\/p>\n