Debt Restruct

Getting out of debt is hard, and staying out of debt is just as difficult, but as important. Find out how to get out and stay out of debt.

How To Stay Out Of Debt When You Get Out Of Debt

Cropped off image of a woman looking at her phone whilst simultaneously look at her credit card.

Debt freedom may seem impossible when you are dealing with an overwhelming amount of debt, however, with the right help there is light at the end of the tunnel, and it’s possible to remain debt-free once you get there. 

In this blog, we share some important tips on how to stay out of debt and address any persistent negative debt habits or behaviour that may be holding you back. Keep reading to find out how you can get out and stay out of debt.  


First step: get out of debt

The first step is always the most important – if you’re struggling, seek professional help or advice from a financial expert. 

It may seem embarrassing to talk to somebody about your financial situation but suffering in silence is not the answer. Working with a financial professional can help you to leverage governed programs that put an effective plan in place to consistently eradicate your debt.  

Here are our top three ways you can get out of debt


   1. Use a debt repayment method 

A solid repayment plan can do wonders for getting on top of your debt. Maximise on methods that have a track record of success such as: 

The Debt Snowball

The debt snowball method works by focusing on paying off the smallest debt amount first and then paying off the next highest amount until you reach the largest amount. This method is about building momentum and boosting your confidence in tackling your debt, one payment at a time. 

The Debt Avalanche 

This approach is similar to the debt snowball method; however, you pay the debt amount with the highest interest rate first and then move to the lowest making your debt repayment speed up over time, much like an avalanche. By paying the minimum on outstanding debt accounts first, and then using extra money to pay off other significant balances, you will end up paying less in total interest. 


   2. Apply for debt counselling

Also known as debt review, debt counselling assists over-indebted South Africans in simplifying and reorganising their debts through a legally-approved debt management plan. After you get approved for debt review, you will work with a debt counsellor registered with the National Credit Regulator (NCR), to make reduced and consolidated monthly repayments towards what you owe until you are declared debt-free. 

The debt counselling method has a myriad of benefits, including the protection of your valuable assets from repossession, little to no contact with aggressive creditors, a reduced monthly repayment amount, and steady progress towards completely eliminating your debt. 


   3. Refinance debt with a debt consolidation loan 

A debt consolidation loan is a loan that consolidates your debt in order to make repayments to a single creditor. The positives of a single repayment term include a lower interest rate, reduced installment amounts and an extended repayment time. 

This is best suited to an individual with strict financial habits. Furthermore, it is worth noting that your overall creditworthiness and income will decide if you qualify for a debt consolidation loan.

Check to see if you qualify to reduce your debt instalment with our quick quiz

How to stay out of debt

Once you have gotten on top of your debt, it is imperative that you do not fall back into the same habits. Here are some tips to help you stay on track: 

  • Create a personal budget: A detailed personal budget will enable you to set financial goals and keep you accountable for your spending. To get motivated, try out free budgeting apps like 22seven or Mint.
  • Spend cash: Keeping cash allows for a physical representation of how much money you have and can work to reduce overspending. Another bonus of using cash is that it minimises charges on your bank account.
  • Track and maintain your credit: Keep track of your credit score and prioritise paying your credit card timeously every month. If necessary, cancel your credit card if it causes you to recklessly spend outside your budget.
  • Take time to educate yourself: Research good financial habits or speak to a financial professional to whip your money habits into shape.
  • Avoid gambling: Do not throw away your hard-earned money on luck-based games, betting or lottery tickets. 


Addressing persistent debt problems

Bad saving and investing habits

Make sure you have a dedicated savings account or interest-bearing investment. Do you know the expression ‘Pay yourself first’? It means that before you pay your monthly expenses, first deposit a certain amount of money into your savings or investment account. This simply makes a habit out of saving. 

Not earning enough money

If you believe earning more money will enable you to cover all your expenses, consider working overtime at your current job or finding part-time employment. 

Living paycheck to paycheck 

Other than increasing your income, consider decreasing your overall monthly living expenses. This may call for the need to downsize your home in order to decrease rent, sell unused items or cancel recreational memberships or subscriptions. 

Living above your means

To save extra money, you may need to reduce the number of times you eat out at restaurants, spend money on recreational activities, order takeaway or go on shopping sprees. On this note, if you find that you spend money emotionally or compulsively, it may be a good idea to seek professional help. 

Compulsive spending

As aforementioned, if you find yourself spending compulsively on items you do not need, it may be a good idea to address this behaviour with a professional. One small way to address this is by adopting an ‘out of sight, out of mind’ approach: cancel any mails you get about sales, cancel retail credit cards and even change where you shop to minimise temptation. 


Living debt-free, now and forever 

A life without debt is achievable, especially when you make the effort to be disciplined and seek professional debt help when necessary. We hope this blog has shed light on how you can maintain a debt-free life, now and in the future.

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Disclaimer: This website and any information herein is not intended to be, nor does it constitute, financial, tax, legal, investment, credit, or other advice. Before making any decision or taking any action regarding your finances, you should consult a qualified professional directly.

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