A Simple Guide to Debt Management

A Simple Guide to Debt Management - Afrika Kesho

For many, hearing the word “debt” flashes mental images of repossession of property, a million letters of demand from creditors and lastly, not being able to afford maintaining one’s lifestyle.

Most people cannot afford to pay cash for the things they need, and so they find themselves taking out loans to make their wishes come true. Sadly, most of these people end up buried under a mountain of debt that they fail to pay off.

You are one of the people who are slowly falling into a debt ditch if your expenses are more than your income and you run out of money before the end of the month. This ends up with you having to borrow money from your family and friends, and you struggling to make the required payments on your credit agreements or maybe even take out more credit to pay off other credit in order to make ends meet.

Till Debt Do Us Apart - Afrika Kesho

To avoid all this from happening, you need to formulate a debt management and settlement plan to get rid of your bad debt faster. Such a plan includes these steps:

1. Seek a consolidation loan with your bank to help you pay off some of your debt (it is advisable to always get a financial advice from a registered financial advisor before pursuing such solutions)

2. Create a budget for your monthly expenses

3. Make payment arrangements with your creditors to pay affordable installments that are within your budget to ensure that you can still afford your basic necessities without having to get more credit

You can even sacrifice some of your luxuries so that you can double up on payments and pay off your debts sooner, and if you are able to you can get yourself a freelance job or start a side-hustle to bring in extra cash to pay off your debt.

Wallet with Money - Afrika KeshoWallet with Money - Afrika Kesho

For those who are beyond these self-help debt management solutions, there are options such as consulting with a debt resolution specialist so that they can assist you with managing your debt. You can also apply for debt review, whereby a debt counselor will assess outstanding debt and give you a restructured debt repayment plan by renegotiating interest rates with creditors in order to reduce them, as well as extending the debt repayment terms.

In essence, debt management is an important solution to many financial problems that people face on a daily basis, learn to avoid getting into unnecessary financial difficulties and you’ll soon realize that some debt can work out well for you in fulfilling your financial needs.

In everything you do, keep this one less in mind: do not spend more than you earn.

This article was written by Karabo Rantho.

You can contact Karabo Rantho by clicking on the social media buttons below, or by emailing her on: karabor@afrikakesho.co.za.

 

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