If you, like so many South Africans are feeling overwhelmed by the debt trap that you got yourself into due in part to the lending policies of many banks, then you are an ideal candidate for debt consolidation. Debt consolidation is NOT debt review, it is you personally taking responsibility for your debt and deciding that the best thing for your peace of mind and your sanity is to get out of debt.
The first thing to do is to acknowledge the debt that you have.
Take every last debt, no matter how big or how small, wether you owe the money to a friend/family member, a bank or a store. Write down every single debt that you have along with the amount you are paying or should be paying towards the settlement of these debts.
As you do this exercise you will likely be astonished at how much you should be paying! Good… now tell yourself that once you have settled these debts, you will never get yourself into the same predicament again.
There are a few things that you can do to begin with.
1. Pay off your small debts
Take your list of debts and select the smallest and easiest debt to pay off, no matter what it is and pay it off. Put a large red stripe through it and keep that list somewhere that it is easily accessible. It is amazing how seeing the completed stripe on a page insires you to remove the next one. Soon you may even find yourself have a glass of water instead of a coffee and paying that R20 into another debt.
2. Take your debts and see your bank, acknowledge that you are in over your head and try to work with them to get a debt consolidation loan.
What this effectively means, is that the bank lends you 1 amount to cover all or part of your debts so that you have 1 affordable loan payment each month. The reason that it is likely to save you money on interest is that the short term loans, store cards and credit cards is very high and by taking 1 loan, settling all of the high interest loans and paying back one single loan is a whole lot cheaper.
Also remember that for each returned payment or debit order there is a cost attached it, so by reducing your payments from 10 small payment to 1 consolidated loan payment you will be saving a whole lot just on bank charges. This may seem insignificant to you, but this is probably due to you not knowing what those bank charges are all about.
Start consilidating your debt and moving towards a debt free life.