5 Steps to be debt free in 2018

Here are 5 steps to be debt free in 2018. Avoid over indebtedness and taking out further credit. Live a debt free live in 2018.

  1. Compile a comprehensive budget

First step to ensuring you stay debt free in 2018 is to compile a comprehensive budget. What I mean by a comprehensive budget is that you should include all your expenses and income. Creating a budget will give you an idea on how much you are spending and how much surplus you have at the end of the month, this will prevent overspending and even eliminate the need for over spending. You may also use our free online calculator https://smartdebtadvisors.co.za/free-debt-calculator.

  1. Pay off as much debt as possible

Should you have surplus money from your 13th cheque or bonus, settle smaller debts or pay extra to accounts that charge higher interest rates. The more debt you settle the less interest or cost you will need to pay to service the debt.

Let’s look at an example:

Account X balance = R5000 (includes interest and cost)

Instalment over 5 months = R1000

Your savings account = R5000

Settlement Balance = R4200

Should you settle R4200 from your savings, you would possibly save R800, if you had to service the debt over 5 months you would be paying the full R5000. The R800 you saved in this exercise could possibly be used to pay off another smaller account.

  1. Stop taking out further credit

Taking out more credit is not an option. Rather save to purchase a large item.

  1. Don’t overspend on takeout’s and entertainment

These days luxury items are costly and an average meal for 2 people may cost R400 and a movie ticket could cost up to R178. Limit spending on luxury items.

  1. Review your credit report

If possible review your credit report annually. You may obtain a credit report from any off the major credit bureaus once a year for free. Look out for discrepancies in your credit report and report them to the credit bureau immediately by opening a dispute.

Here are links to some of the major credit bureau’s:

https://www.transunion.co.za

https://www.creditexpert.co.za/CERegister1.aspx

https://www.mycreditcheck.co.za

Always seek professional help from a debt counsellor should you be experience financial difficultly or contact a financial adviser should you need help with investing funds or saving money.

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5 Steps to be debt free in 2018
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5 Steps to be debt free in 2018
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Here are 5 steps to be debt free in 2018. Avoid over indebtedness and taking out further credit. Live a debt free live in 2018.
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Smart Debt Advisors
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