Speaking of debt...

[Arzy]

So I've noticed that there is a common link between a lot of threads in the last couple of days relating to debt and the effect it is having on lifestyles. I'm thinking of "So I went to my bank..."; "Rate your life" and "I'm Broke (Rant)" for example

Now the question I want to pose, not to the OP's of said threads but to anyone in general:

- What steps have you taken in the last while to reduce your overall debt?

My wife and I sat down last weekend and I made a quick spreadsheet to work in conjunction with our budget illustrating how much extra cash we could have on a monthly basis by clearing out some of our unnecessary expenses. I can do this because we really do follow the principle of what mine is yours and even though we have seperate bank accounts we use them as if it was one account.

- Now the first thing on our list was clothing accounts, this is interest free debt, but we are going to moving away from using these accounts and instead just get new clothes more regularly on a cash basis.
- Then I called around a bit for new insurance quotes, I've now realised this is something I should do every two years, as our insurance premium was cut by 1/3.
- Credit cards are also a burden, so in the calculation we start paying extra into these as soon as clothing accounts get settled.
- Then we look at a couple of the policies and things we have taken out over time and made a decision regarding which of these are really necessary and cancelled the rest, nothing that will have a major effect on retirement and health though

For us this was a rather simple exercise and by sticking to the plan for 6 months our disposable cash is almost doubled in august. Sure we will most likely spend this on other things, but at that stage it is a major burden that is effectively reduced.

For those that have gone through something similar, what other debt did you try and cancel out or reduce?

[Voldemort]

Im just waiting for me bonus n March, that'll sort out most of me debt:)

[Pitbull]

I only buy what I can afford and still maintain my current life style.

There is the od month I really run into dept because of Heavy weekends, Tyre replacements, Cam Belt broke - R 1000.00 I never had and so forth. So then 2 or 3 heavy months recovering and then I'm back where I was. As long as I keep it that way I should never have an issue

[Dolby]

Two ways ...

Less drinking
Take outs

On the above I easily spend R2500-R3000pm

[Pitbull]

Im just waiting for me bonus n March, that'll sort out most of me debt:)

O YEA !!!

Damn it's bonus month :D
This is going to be a good year, nice increase end of March and a Bonus

WOOT !

Thanx for reminding me btw :D

[Omac]

Im just waiting for me bonus n March, that'll sort out most of me debt:)

I used to live like that! It didn't work for me! It's spending money before you have it! :)

[AcidRaZor]

I paid off my one credit card and one personal loan that I had. This free'd up enough money for me to be able to afford to quit my job and relocate to somewhere better, even though it meant less pay.

The plan was to use the extra cash to pay off my other credit card, then proceed to pay off my personal loan and then perhaps pay extra into my car (which you shouldn't really do)

But yea, things changed

[Datura]

Two ways ...

Less drinking
Take outs

On the above I easily spend R2500-R3000pm

Yip same here. Shocking!

[Skeptik]

WoolWorths just sent me a Store Card. I just have to sign it and activate it. No reason, just out of the blue.

Pretty irresponsible IMHO.

[TelkomUseless]

My wife has halved her clothing account (R1500 less pm), I know... its insane.But they stole my car, so need a new car (2nd hand for R1000pm-R1500 about).

Cancelled my Discovery medical... going on the wife's medical (she got a permanent position).Saved more than R1k pm.

Only have R3000 for studies on CreditCard. Trying to pay that ASAP.

I don't live beyond my means. I'm paranoid about debt. I rather drive my cheap car, and sleep well , than driving something expensive and worry each day.

[Surv0]

I dont spend what i dont have = no debt, except for my car :p

[Ecco]

I'll get rid of my adsl line at home and only use the net at work! LOL - not one of you said that one, hehehehehe!

[Waaib]

I managed to work through a mountain of debt. Took me 4 years.

I started by cutting up all credit cards and shopping account cards. This forced me to use cash only. Debit cards are a great alternative to cash if carrying it is unsafe.

Then I started with the smallest debt and paid that off first. Once the smallest was gone I took that repayment and added it to the next smallest and so on. So start with the smallest first and worked towards the biggest. Lumping it all together didn't occur to me.

For me it worked because I could see I was making progress and by the end of it I had a great spending habit. I still don't have any store cards etc but do have a credit card that I pay off every month.

[Waaib]

WoolWorths just sent me a Store Card. I just have to sign it and activate it. No reason, just out of the blue.

Pretty irresponsible IMHO.

I thought the NCA made this illegal?

[ajax]

I'll get rid of my adsl line at home and only use the net at work! LOL - not one of you said that one, hehehehehe!

Don't even speak the unspeakable :D


Cycling to work - I hear petrol is going up by about 60c/litre next week and probably another 30c odd in April :eek:
Virtually no more take out
Scrutinize grocery fliers and only buy the stuff that's on special and only the stuff I really need.
Turned my geyser down to 50 degrees. In summer I don't use much hot water anyway.
Observing the time I make calls, i.e. rather wait till off peak times
No clothing/store cards
Ensure I can always clear my credit card at the end of the month - self discipline is luckily a virtue of mine

[Xenophon]

i have no option, going the debt councelling route :eek:

[acidrain]

Im generally not a believer in creating debt.... the problem just came when my dad fell into hardship. Both myself and my sister are floating in a sea of debt, only account i have is my cellhpone and even then im only paying subscription ( best contract deal i could ever have asked for ). Im managing at the moment but the constant calls from the banks over the same issue is just stressful to say the least.

[acidrain]

i have no option, going the debt councelling route :eek:

Std. Bank offered that to me but i hear you get listed on the credit bereau if you go this route... thats why id rather struggle and keep my head above water.

[Xenophon]

Std. Bank offered that to me but i hear you get listed on the credit bereau if you go this route... thats why id rather struggle and keep my head above water.

yeah, i know. you also sign a form to say you won't take out any additional debt until they give you the certificate that you're clear of debt. but i'll rather go this route than continue receiving all these calls. i have researched this thoroughly and for me it is the best option. only debt i will consider again is when
i move and to buy another house.

[supersunbird]

I paid off my one credit card and one personal loan that I had. This free'd up enough money for me to be able to afford to quit my job and relocate to somewhere better, even though it meant less pay.

The plan was to use the extra cash to pay off my other credit card, then proceed to pay off my personal loan and then perhaps pay extra into my car (which you shouldn't really do)

But yea, things changed

Why not pay off the car quicker?

Im getting about 9000 extra end March and want to pay of my Uno and invest that R1000 pm into My Virgin Money CC... Or maybe it would be better to drop that 9000 into the Virgin Money?

[Waaib]

Why not pay off the car quicker?

Im getting about 9000 extra end March and want to pay of my Uno and invest that R1000 pm into My Virgin Money CC... Or maybe it would be better to drop that 9000 into the Virgin Money?

My rule if thumb is don't bother saving unless you are debt free. Rather use the 'saving' to pay off debt. You always pay more interst on debt than you earn interest on positive balance. But that's just me.

[alf101]

First u buy what u have to.
Then u buy what u want.

Doesn't anybody budget?

If u use spreadsheets, MS Money, Quicken, or whatever to manage your finances, u shouldn't run into problems.
At least u'll see them coming.

[Crusader]

My general rule is that if I can't buy it cash I don't buy it at all... or wait till I can afford it.
You should only go into debt when buying something that could increase in value (a house) or a necessity like a car.

If you do have debt it is the best idea to pay off that debt before trying to put savings away. Even if you can get an excellent interest rate on your savings it will most likely be less than half the interest you are paying on debt.

To get rid of debt you'll need to see what charges the highest interest rate. Then pay as much money as you can to get rid of that debt. Once that's done move on to the next highest one, pay the normal amount + the amount you now have available from the previous debt. Continue till you are debt free... then stick to not creating any new debt and start investing the cash you would have been paying for the debt.

The key is in investing the cash you now have available and NOT spending it.

[Toko]

I'm thinking of getting a small bike and only using the car when I have to. I filled up today and it cost me R474 for 63 odd litres

[Arzy]

With the petrol price going up at the rate it currently is I think a lot of people are going to start getting bikes.

It really is a very vicious circle at this stage: Petrol goes up, everything else goes up, consumer has to pay more for day to day expenses(we already cut out the luxuries), inflation rate moves out of the bracket, reserve bank raises interest rates to curb inflation, consumer now has less money to pay for more expensive goods, petrol goes up...

Thus getting back to the point of clearing as much debt as possible so as to allow for funds to be saved. The only people who benefit with interest rates going up are those who are in a position to save. Which get back to the original topic, what have you done recently to reduce your overall debt?

The suggestion thus far:
- Clear accounts and work on cash basis
- Use extra cash from accounts to clear credit cards and loans
- Reduce amount of luxuries: Drinking, smoking & take outs
- Budget
- Stick to the budget

[Pitbull]

Don't be mislead

Bikes uses the same amount of fuel as cars if not more, depends on how you drive them. If your talking about a scooter I would agree ;)

[AcidRaZor]

I found an excellent (free) program. http://www.thezeal.com/software/index.php?Money_Manager_Ex

It allows you to capture all your accounts and have monthly recurring accounts you can just enter the transaction to on your accounts (without having to capture it again) It warns you of upcoming payments (the monthly recurring stuff) and you can keep an eye on all your stuff using nice reports. See where your money goes to etc.

Plus, it has a budget feature where you can draw up your entire budget. But not only that, if you spend money on dining out for instance, it immediately reflects in your budget to give actual figures of what you spent that year and has a little light bulb to tell you that this was an unplanned expense. Pretty neat.


Why not pay off the car quicker?

Im getting about 9000 extra end March and want to pay of my Uno and invest that R1000 pm into My Virgin Money CC... Or maybe it would be better to drop that 9000 into the Virgin Money?

Pay the 9000 into the credit card and try to clear that. If your credit card is 9000+ you'll save much more than paying off your car first as it generally has a higher interest rate than your car. The cash you save in repayments on your credit card, stick that back into the cc till its paid off entirely. You'll probably have around R1000 extra then lying around to put back in your car.... and by the sound of it you'll pay it off within 9 months anyway, so you might want to consider putting the money you save on the cc into some other debt rather than your car and pay it off entirely using your normal monthly instalments

[BiteMe]

my debt solution: i figured out i actually had way enough money to support my lifestyle, but it wasnt going to the correct places. basically, my wife was one big black hole of mystery..sorry to say it. we owed R150k on loans, and were always hitting the limit on the overdraft..

i took her cards, i had her salary transferred to my bank account, and i "pay" her spending money for the week now. sounds a bit hitler, but it works magic. essentially, she is not good with numbers.

we now actually buy more luxury goods than before...because the money is not wasted. i got cash savings at home in a safe for day-to-day messing about, got a fairly large amount in a savings account, got a positive balance in my bank 3 times our combined salary and most importantly, we are 100% debt free..dont owe a penny. both cars are paid off etc. monthly bills are just debits for insurance and services, which means there is more slush available for me to move to savings, and we hardly touch our debit cards because if we need anything there is cash at home to use instead.

it's a cycle..once you are in debt you end up more in debt...what i can say is once you pay the debt off and save, it is very easy to increase your savings.

[Bondizzo]

I'm basically debt free, but I have a cc with virgin money which I use instead of cash at times as its free to swipe and got them to put the limit low to R4000, I clear it off every month. I'm thinking of buying another car but 2nd hand in the 70-100 thousand range, I dont want to go into debt so I'll buy that cash, or is it wiser to keep saving ?

Another thing is I don't rely on my salary, I got payed yesterday and wasn't excited about it at all as I have a couple more sources of income, as soon as they stabalise I'll lose the 9-5.

[TelkomUseless]

my debt solution: i figured out i actually had way enough money to support my lifestyle, but it wasnt going to the correct places. basically, my wife was one big black hole of mystery..sorry to say it. we owed R150k on loans, and were always hitting the limit on the overdraft..

i took her cards, i had her salary transferred to my bank account, and i "pay" her spending money for the week now. sounds a bit hitler, but it works magic. essentially, she is not good with numbers.

we now actually buy more luxury goods than before...because the money is not wasted. i got cash savings at home in a safe for day-to-day messing about, got a fairly large amount in a savings account, got a positive balance in my bank 3 times our combined salary and most importantly, we are 100% debt free..dont owe a penny. both cars are paid off etc. monthly bills are just debits for insurance and services, which means there is more slush available for me to move to savings, and we hardly touch our debit cards because if we need anything there is cash at home to use instead.

it's a cycle..once you are in debt you end up more in debt...what i can say is once you pay the debt off and save, it is very easy to increase your savings.
That is why my wife has no Credit Cards, Contract for cell phone (on pay as you go). She calmed down on the clothing accounts.. because I told her is the clothes or the house. She needs to pay for stuff in the house and car. Not just me.

If she had a Credit Card or Cell phone contract, we would be living on the streets.

That is why they call it tough love :)

[Crusader]

Just found an interesting calculation you can do to see your debt-to-earnings ratio: take your monthly debt repayments (excluding bond) divide them by your monthly after tax income and multiply by 100.

0 to 10% is good.
11 to 16 is fair.
17 to 20 is dangerous.
Above 21% requires professional help.

[Arzy]

I agree with the comment about having enough to support a lifestyle, one problem though is that as the money increases so do the demands of that lifestyle :)

Regarding the issues with spouses, one of the major reasons my wife and I sat down originally to go through this exercise is because she felt she had almost no money left after paying the things she normally pays.

To explain in more detail how my household works, I am the breadwinner, my wife is currently busy with her articles(legal) and earns a pittance but she only has a year to go though. As I said earlier we basically work out of one bank account but the split is currently that I pay for everything relating to the house, medical, insurance etc. She pays for her car and her accounts.

In essence I agree with the people who say that they need to manage the spending of their spouses/significant others. In my case though, while trying to show my wife how much extra money she could have on a monthly basis by not paying for all her into clothing accounts and her credit card I actually found all the places I was going wrong myself.

Now its a case of where we both agreed to go through this process for the next six months and then to reap the rewards. By the end of the year we will have paid off her car and in essence the only remaining debt will be a single study loan.

[amabacha]

I bank with ABSA and have 8 debit orders which I get charged for - about R5.50 per debit order. Does anyone know if its cheaper to move these monthly bills to my credit card? I stay out of the red most months so not too worried about paying interest. Thanks

[Dolby]

You could look at Go Banking ... they're pretty good with all banking fee's, including debit order fee's

[supersunbird]

Pay the 9000 into the credit card and try to clear that. If your credit card is 9000+ you'll save much more than paying off your car first as it generally has a higher interest rate than your car. The cash you save in repayments on your credit card, stick that back into the cc till its paid off entirely. You'll probably have around R1000 extra then lying around to put back in your car.... and by the sound of it you'll pay it off within 9 months anyway, so you might want to consider putting the money you save on the cc into some other debt rather than your car and pay it off entirely using your normal monthly instalments

No no no, you misunderstood.

My cars last payment is in November. My VirginMoney CC (8.5% interest per annum on + balance, no card fees) is currently at R0 (its new and intended for saving).

Absolutely no other debt around, till I try to buy a duplex in a few months...

[blunomore]

We would be SO well-off if my significant other did not have to pay a ****load of maintenance to the ex-Mrs, as well as ad hoc payments every time his 4 spoilt children from that marriage (of which 3 are in their 20s already) cries to 'daddy' to bail them out.

I think the best investment as far as your kids are concerned, is to teach them the value of delayed gratification.

[TelkomUseless]

We would be SO well-off if my significant other did not have to pay a ****load of maintenance to the ex-Mrs, as well as ad hoc payments every time his 4 spoilt children from that marriage (of which 3 are in their 20s already) cries to 'daddy' to bail them out.

I think the best investment as far as your kids are concerned, is to teach them the value of delayed gratification.
I think 90% of SA can do with delayed gratification! Everybody wants everything NOW... use credit card for instant gratification...

[AcidRaZor]

No no no, you misunderstood.

My cars last payment is in November. My VirginMoney CC (8.5% interest per annum on + balance, no card fees) is currently at R0 (its new and intended for saving).

Absolutely no other debt around, till I try to buy a duplex in a few months...

Well if your last payment is in November I'd suggest phoning the bank and getting a settlement amount. Then work out how much you will actually pay till November.

If you pay R1000 for your car that'll be 9000 till November. Your settlement should be lower than that so find that out then:

R9000 - (settlement) = saving

Remember your car depreciates over time as well.

Putting the R9000 in your credit card at 8.5% interest as a savings mechanism might be better than paying off your car. It's only 9 months from now. 9 months from now you'll have R9000 + (interest on saving) + your car repayment to save.

If the R9000 goes into your bond (if you had one) then I'd say go for it, but not your car.

Cars aren't worth "investing" in.

[Voider72]

I re-advanced my bond twice and was still in debt, so I now moved my Bond AGAIN to another bank which gave me another R100k, that will take 3months to clear so i used bridging finance for now

My expenses are way more than my income, to sort this out, i'm looking for higher paying positions AND trying to settle the credit cards, cut down on eating out etc...

I found that I can negotiate with the banks by getting a low interest rate from One bank and then asking the other if they'll better it, then i move

But it will take time I think

[Dolby]

We would be SO well-off if my significant other did not have to pay a ****load of maintenance to the ex-Mrs, as well as ad hoc payments every time his 4 spoilt children from that marriage (of which 3 are in their 20s already) cries to 'daddy' to bail them out.

I think the best investment as far as your kids are concerned, is to teach them the value of delayed gratification.

And what does he say about it? Has he complained?

[blunomore]

And what does he say about it? Has he complained?


I love him dearly, despite his pathological fear of confrontation :D

He cannot say NO to his kids.

[nobasooto]

I bank with ABSA and have 8 debit orders which I get charged for - about R5.50 per debit order. Does anyone know if its cheaper to move these monthly bills to my credit card? I stay out of the red most months so not too worried about paying interest. Thanks

Yeah there should be 0 charge IF you can pay be credit card instead.

[nobasooto]

My wife has halved her clothing account (R1500 less pm)

LOL.. two words - beech slap.

What does she do with all her clothes...?

[Dolby]

I love him dearly, despite his pathological fear of confrontation :D

He cannot say NO to his kids.

I understand what you are saying ... but they ARE his kids ;) My dad was the same with me and brother (though - we weren't spoiled ...)

[superB]

I understand what you are saying ... but they ARE his kids ;) My dad was the same with me and brother (though - we weren't spoiled ...)

LIES!! All lies!!

[blunomore]

I understand what you are saying ... but they ARE his kids ;) My dad was the same with me and brother (though - we weren't spoiled ...)

I know I talk easily, since they are not my kids, but I would have taught them that money must be earned, that the least you can do is pay your own speeding tickets and that if you are a student and you want something your pocket money cannot pay for, you may wanna consider getting a holiday job.

If you give a child everything they want, it is the most insidious form of child abuse, because you are NOT preparing that kid for the harsh reality of the real world out there.

In his defence though, the kids live with their mother, who encourages them to take as much money as they can get from him.

[sahopeful]

I inherited 3 credit cards, a couple of loans, and alot of stuff from my reckless first 2 years of work. This in addition to my mammoth student loan, and car loan.

Gees its 2008, and its been shocking to see how much interest I've paid over the years. I've now closed 2 of the 3 credit cards. Cancelled my ADSL, and using my HSDPA card (part of the stuff!) on 500MB bundle, while using work's data for big downloads. Converted my cellphone contract to pay as you go, and negotiated with the girlfriend to use gtalk. Cancelled my under-utilised gym contract. Drive much slower (80km/hr in 120 zone!), and saving to buy a scooter cash. Putting the extra cashflow in the last credit card and clothing account.

It feels sooooo much better to be able to survive through a month without using a credit card.. And actually earn some interest on my GoBank and Capitec savings accounts..

[BiteMe]

debt is the system's way of ensuring you stay in slavery and be compliant.

once you experience going through the month without utilising credit and having a bigger positive balance than the month before (via saving etc) there is no going back, you are free, ..free to make your OWN decisions. you cant put a monetary value on that feeling.

[Hot_Chocolate]

yeah, know that feeling of not coping. We started 2 years ago. And we only have hoam loan, 2 vehicle loans (both finishing this year) and another loan left. The other loan we took out to get rid of our cc. It was the best way for us. Glad to say by the end of this year, we will only have home loan left over

[Dolby]

I inherited 3 credit cards, a couple of loans, and alot of stuff from my reckless first 2 years of work. This in addition to my mammoth student loan, and car loan.

Gees its 2008, and its been shocking to see how much interest I've paid over the years. I've now closed 2 of the 3 credit cards. Cancelled my ADSL, and using my HSDPA card (part of the stuff!) on 500MB bundle, while using work's data for big downloads. Converted my cellphone contract to pay as you go, and negotiated with the girlfriend to use gtalk. Cancelled my under-utilised gym contract. Drive much slower (80km/hr in 120 zone!), and saving to buy a scooter cash. Putting the extra cashflow in the last credit card and clothing account.

It feels sooooo much better to be able to survive through a month without using a credit card.. And actually earn some interest on my GoBank and Capitec savings accounts..

Awesome ideas :)

[K@izer§øze™]

WoolWorths just sent me a Store Card. I just have to sign it and activate it. No reason, just out of the blue.

Pretty irresponsible IMHO.

Err...run up a HUGE bill and go for debt councelling...hehehe..its against the law to give you credit without proper checks. The NCR sees to that

[CharlesM]

Here's a cool tip if you have a problem with spending too much on you credit/store cards...

Most of us use these cards as they are convenient and we can shop impulsively. Take each of one of your cards and put them in a plastic dish of water in the freezer.

When you want to buy something and pay with a card, you will need to take the dish out of the freezer the night before to defrost. You can't defrost it in the microwave, so you'll have plenty of time to rethink before you buy.

[blunomore]

Pick and Pay have a instore magazine with coupons for discounts.

In my opinion, however, the discounts are not on important items - it's the nice-to-haves, not the need-to-haves .... but it may save some people a few rands.

[AntiThesis]

I've inherited and earned my own debt over some years and since last year Jan or so I started getting organised. I'm still sitting in the red more or less every month but I'm certainly making headway :)

[BrandonH]

I'm sitting on about £800 credit card debt which is not too bad considering cc credit limits are usually between £2000 - £5000.

[CharlesM]

Can you share some tips on how you got out of debt?

I have a few tools on my site, click here (http://mydebt.co.za/index.php?view=category&id=40%3Afree-downloads&option=com_content&Itemid=81) to download them

[Arzy]

Well since I originally started this topic I've progressed rather well in clearing a lot of my debt, I basically followed the process in the first post but refined it a bit. If I had to give tips to anyone I would say the process would be as follows:

1) Identify your debt and other controllable expenditure
2) Rank debt according to the interest rate charged and total value of the debt
3) Identify possibilities for reductions in controllable expenditure
4) Set a limit for your expenditure and use the rest to pay off debt.

The important part to note is that this is only the start, from here on in it actually takes action to get out of debt. My actions were as follows:

1) Identification
I basically made a list of all the clothing accounts, credit cards, loans and debit orders I were being paid on a monthly basis with their total value. It actually scared me what percentage of my monthly income was being taken up by these when I saw the total figure and not just individual transactions on my bank statement.

2) Ranking
My debt consist of clothing accounts, credit cards and a revolving credit plan. The rates of these differ quite a lot so I did two rankings, first according to the interest rate charged and then according to the value of the debt.

On interest rate my ranking was:
Clothing accounts (0%)
Revolving credit (16%)
Credit Cards (17% & 18%)

On value my ranking was(highest to lowest):
Revolving credit
Credit Card 1
Credit Card 2
Clothing accounts

3) Reductions
After ranking my debt I looked at my other debit orders that went through, these included insurance, medical aid and other policies. I once again did some calculations and found that close on 20% of my income was going to retirement provision, life insurance, medical top up insurance and all those other silly plans that your bank and medical aid call you about monthly offering as a special to only selected clients. I cancelled the bulk of these and called around for quotes for others, the net effect was:

1/3 deduction in my insurance premium(I actually added my wife's car onto my policy and I'm still paying less than what I was for just my car and the house)
About R1000 a month in cancelled policies without touching my medical aid
I am still contributing 14% of my gross income to my pension fund(I'm only 26 so this is still rather high)

4) Limit and pay
So after ranking my debt and creating some extra funds each month through the reduction of my expenditure I started working on my debt. The first and most important part of this is to know exactly what you have available each month to make your payments with and still have a life. This means you have to budget, there are a lot of tools to do this with. I personally use Microsoft Money and Excel.

Next step I decided what I would regard as reasonable free cash on a monthly basis and then reduced it with 10%. This was just personal preference though. What you have left you can then put into your debt. My calculation was as follows:

Net Income
Less: Fixed Expenditure(Medical Aid, Insurance, Telephone, House, Food, Petrol)
Less: Expected variable expenditure(yes, your basically giving yourself an allowance)
Equals: Disposable income available for debt repayment

Now normally the advice would be to start with your smallest debt and pay that off first, I personally think interest rates should be taken into account as well. On a side note it is also important to remember that each month you must continue to pay the minimum amount in each form of debt you have. It has unfortunately happened that when people try to clear there debt they stopped paying some of their debt and put those payment into other debt, this will most likely result in a judgement being taken against you. My repayment schedule thus worked out as follows:

Clothing accounts (0% interest) got no additional payments and will be cleared in June.
Credit Card 1, the smallest of my two cards but with the highest rate, is getting all the additional funds I have available at this stage and will also be cleared in June.
Credit Card 2, gets its payment each month as per statement until June, from July I put the additional funds from my clothing accounts and credit card 1 into this card and it will be cleared by December.
Revolving credit gets its minimum payment each month until December, from January I will be putting all additional funds I have available into it and then if all goes well I will be totally debt free in August next year.

For the time being though it takes a lot of commitment and some obedience, but in the long run it is definately worth it. As a final thought, I have not budgetted for any bonusses or other aditional funds during the year, should I happen to receive these I would most likely take a small portion and place the rest into my debt as well so as to hurry the process along.

[kaspaas]

A few years ago I suffered a financial nightmare where my business income evaporated in a few weeks (Major client "restructured" - or rather almost closed down).

It was also at the time when bond interest rates peaked at 25%.

I did survive ....

Cash is king, and working to keep my cash flow as healthy as possible was the main target.

By locking my credit card in the safe (It is too easy to get excuses to use it)

By living cash - it is a different experience swiping even a debit card to actually counting real money.

I had envelopes for my budget R200 in one for fuel, R300 in another for food etc.

No Cokes or chips, nevermind beer - and I don't smoke. Even coffee, tea and sugar vanished from my shopping list. I drank water when thirsty.

Replaced meat with soya (terrible but I survived!)

Slowed down and actually improved my fuel consumption by 25%.

I got rid of my short term debt by repaying the smallest first - it created a cashflow improvement.

I learnt another aspect of the value of additional payment on my bond in the fat years - the bank was more than willing to accept a reduced monthly payment as long as the outstanding balance was not higher than it would have been if I did not make the additional payments.

Until today, I live mostly cash. I have an Edgars account as well as a credit card which I use as little as possible just to keep a credit record going.

Surviving in tough times requires lots of discipline, and sacrifices. But in the long run, it is worth it.

It is wonderful to be debtfree - I only have my bond left on more than 30 days. No other debt.

But it does require discipline to save to buy a car cash.

And I don't care anymore about nasty comments because I'm considered as a cheapskate for using Pick&Pay as my bank (GoBanking)