Managing Your Debt: A South African Perspective

Debt can happen for several reasons: unexpected expenses, job loss or simply making a poor financial decision. Whatever the reason, it’s important to recognise that debt is a problem that many South Africans face and to understand the different methods of managing it. First, it’s important to take a step back and truly assess your financials by tracking your current income and expenses. This will provide an idea of what needs to be done in order to manage your debt. Once that is established, the next step is to identify the type of debt you have. There are many sources of borrowing and various levels of debt, including credit cards, student loans, personal loans, etc. It’s important to distinguish between different types of debt in order to determine which type requires immediate attention. There are several ways to manage debt, each of which is aimed at reducing your overall debt and ultimately getting out of debt altogether.

Pay off the Highest Interest Rate First

It’s tempting to pay off your smallest debts first, however, it’s wiser to pay off your debt with the highest interest rate first. Paying off the highest interest rate balance first will not only result in fewer payments in the long run, but also potentially save you money in interest. Furthermore, paying off that first balance creates a sense of momentum, providing more incentive for the repayments of the remaining debts.

Consolidating Your Debt

Debt consolidation combines multiple debts into one more manageable payment amount and possibly at a lower interest rate. To achieve this, you would need to take out a loan from a bank or other institution and use it to pay off other simplified debts. Debt consolidation simplifies the repayment of your debt and makes keeping track of your finances easier.

Debt Review

Perhaps the most drastic precaution of managing debt is the debt review process, where you work with the National Credit Regulator of South Africa to negotiate an affordable repayment plan with your debtors. However, declaring yourself under debt review will affect your credit score and credit standing significantly.

Budgeting

It goes without saying that budgeting plays a major role in keeping debt under control. Start by understanding your spending habits and then create a budget plan to meet expense within your income limitations. This will also ensure that you avoid overspending and using more credit, while putting you on track with your debt repayments.

Getting Professional Help

One of the most effective ways to dealing with debt is to get professional help, like a financial adviser or financial planner. Financial advisers can provide help in setting up a budget, evaluating credit and debt solutions, and creating a debt repayment strategy. No matter which approach to managing debt you choose, it’s important to stay focused and stick to a plan. To make the process easier, QikTruck – South Africa’s leading on-demand truck and driver hire service – can help with providing reliable and affordable transport solutions, so you can take some of the pressure off your budget and ensure that you get the best financial advice and assistance available. So, if you’re looking to manage your debt, or if you’re just looking to get out of debt altogether, make QikTruck your go-to transport solution and get the help you need. Debt is a concern that so many South Africans have to face and it’s important to understand the different ways to manage it. At the end of the day, understanding the various debt management techniques and sticking to a plan or budget is what’s most important. And when you’re looking for the most reliable and affordable transport solutions, rely on QikTruck for reliable and affordable solutions.

 

Move anything anytime with QikTruck

Copyright 2022