Three steps to getting debt behind you

Debt is so easy to get into and so very difficult to get out of. Prevention is always better than cure but the reality is that we get enticed into debt over time and soon find ourselves in it way too deep. The cost of debt climbs quickly and robs us of the potential to create wealth.

Institutions make their money by lending money to you at a rate over the time. You can benefit by reversing the formula. Interest + time = profit. You cannot reduce the interest rate but can reduce the time = less profit for institution.

Less interest for institution means more savings for you. More savings for you compounded over time = more wealth for you.

Here are 3 steps to getting ahead of your debt in 2016. A debt trap can be likened to trying to fill up a bath with the tap on but leaving the plug out.

Step one

Put the plug in by making a conscious decision to get out of debt. The culprits need to be identified and cannot be allowed to increase anymore. Credit cards, overdraft, personal loans, store accounts, outstanding taxes. All have to stop.

Step two

Open up the tap with your disposable income. This is the money that is left over after your cost of living during the month. You will have to draw up a budget on a sheet of paper detailing your expenses throughout the month. Focusing on living expenses, split them into ‘nice to haves’ and ‘must haves’. This is the hard work as you have to be brutally honest with yourself in identifying what you need and what you can do without.

Step three

Keep a close eye on the water level. Divert the new found savings back into paying off your debts. Targeting the highest interest bearing ones first and then working through the next. Patiently keeping your living expenses well under control. A new year brings on a wave of price hikes. So your cost of living will is going to increase anyway. Expect 2016 to be really tough. The cost of debt will probably increase as interest rates are on the rise. Debt is the enemy so you need will have to squeeze those living expenses even more now than ever before. Reducing debt saves you fortunes and only saving for yourself instead of paying the bank will put you on the road to financial freedom.

Weekend Breakfast's Sam and Africa had a conversation with Paul Roelofse. Listen below...


This article first appeared on 702 : Three steps to getting debt behind you


CapeTalk welcomes all comments that are constructive, contribute to discussions in a meaningful manner and take stories forward.

However, we will NOT condone the following:

  • Racism (including offensive comments based on ethnicity and nationality)
  • Sexism
  • Homophobia
  • Religious intolerance
  • Cyber bullying
  • Hate speech
  • Derogatory language
  • Comments inciting violence.

We ask that your comments remain relevant to the articles they appear on and do not include general banter or conversation as this dilutes the effectiveness of the comments section.

We strive to make the CapeTalk community a safe and welcoming space for all.

CapeTalk reserves the right to: 1) remove any comments that do not follow the above guidelines; and, 2) ban users who repeatedly infringe the rules.

Should you find any comments upsetting or offensive you can also flag them and we will assess it against our guidelines.

CapeTalk is constantly reviewing its comments policy in order to create an environment conducive to constructive conversations.

Read More
Capetonian tackles 3300km canoe trip to raise awareness for NGO

Capetonian tackles 3300km canoe trip to raise awareness for NGO

'I’ve always had that urge to do something no one has ever done before.' - Elizma Fuller

This is why the movie 'Wonder' can teach our kids a lot

This is why the movie 'Wonder' can teach our kids a lot

'It’s a really nice story about why you shouldn’t treat people differently because they look different.' - Gayle Edmunds.

[LISTEN] This had never been done before says Professor Clarke

[LISTEN] This had never been done before says Professor Clarke

Professor Ron Clarke hosted a press conference to reveal the recent excavation of the full skeleton of Little Foot which took 20 years.

[LISTEN] 'We are dealing with an outbreak of Listeriosis' - Dr Thomas

[LISTEN] 'We are dealing with an outbreak of Listeriosis' - Dr Thomas

Head of the Centre for Enteric Diseases at the NICD Dr Thomas says that Listeriosis is problematic because it isn’t notifiable.

[LISTEN] South Africans waste 10 million tons of food every year

[LISTEN] South Africans waste 10 million tons of food every year

Founder of Agricolleges Int. Howard Blight talks about ways to reconcile the gap between those that waste, & those who don't have.

Public plans to march in an effort  to save the lives of paramedics

Public plans to march in an effort to save the lives of paramedics

Parliament needs to deploy the SANDF to escort emergency vehicles in focused areas - Noel Desfontaines, General Sec for Hospersa

Popular articles
'This puts pressure on Jacob Zuma to vacate office earlier'

'This puts pressure on Jacob Zuma to vacate office earlier'

The Money Show’s Bruce Whitfield interviews Daniel Silke, Political Economy Analyst at Political Futures Consultancy.

Judge Mlambo: Zuma's application amounts to abuse of judicial process

Judge Mlambo: Zuma's application amounts to abuse of judicial process

EWN Barry Bateman explains the High Court proceeding on President Zuma's application to set aside parts of Madonsela's report.

It's chicken for Joburgers and Durbanites, but what do Capetonians feast on?

It's chicken for Joburgers and Durbanites, but what do Capetonians feast on?

Stephen Grootes spoke to founder and CEO of OrderIn to find out more about South African's eating habits.

Predictably awesome new Nando's ad reminds South Africans ‘we can fix our sh$t’

Predictably awesome new Nando's ad reminds South Africans ‘we can fix our sh$t’

Watch the Guptas pack their bags and run in Nando's inspiring new advertisement.

PSG Chair Jannie Mouton opens up (kind of) about Steinhoff

PSG Chair Jannie Mouton opens up (kind of) about Steinhoff

In 2012 Steinhoff acquired 20% of wealth manager PSG, reportedly infuriating Mouton. Bruce Whitfield interviews him.

[LISTEN] Caller challenges Eusebius on land disposition

[LISTEN] Caller challenges Eusebius on land disposition

‘I need you to provide me with an answer' - John from Edenvale, Gauteng