Debt Restruct

Mistakes You Should Avoid When Paying Off Debt

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If you’re willing to make the necessary commitment, getting out of debt can change your life. We have all learned, one way or another, that mistakes are meant to be made. But we also learned that learning from them is a must. That is why we are here to tell you about all the mistakes people make when paying off debt in order to help you avoid them. 

There is more to getting out of debt than just paying off credit card debt. The key to becoming debt-free is changing your spending habits, knowing who and how much you owe, prioritising debts, creating an emergency fund, knowing where to find help if you fall off track, and many more.

As a result, there are many decisions to be made and it’s likely- if not probable- that mistakes will be made along the way. Here are a few things you can avoid that will make it easier for you to get out of debt.


Mistakes to avoid when paying off debt

Not properly tracking progress on your accounts

The first step is to monitor your debt repayment efforts because as your debt balance falls, you’ll be more motivated to make additional sacrifices to pay it off. If you need extra money to pay off debt, you might consider picking up a side job or working overtime.

Depending on the severity of your debt situation, you may have to refinance the debt at a lower rate, increase your payments, or consider drastic measures like a debt settlement or bankruptcy.

Not having a plan to pay off the debt

Debt repayment can be a difficult task, especially if you know you want to succeed at it. Rather, you should set clear financial goals and make a detailed plan to help you achieve them. Here are some things to consider:

  • In order of priority, which of your debts should you pay off first? 
  • Amount of money you have available for debt repayment.
  • Your total debt.

Making only the minimum monthly debt repayments

If you only pay the minimum amount monthly, then you may have more money in your pocket each month, but your final balance will be much higher than your original balance by the time your debt is paid off. In addition, paying only the minimum means you will be in debt for a lot longer.

Distributing the money to pay off the debt too much

Your goal should be to pay the minimum on all your bills and decide on one particular bill to send the extra cash to. By doing so (either the lowest amount first for momentum, or the amount with the highest interest, to save on interest costs), you could pay down the debt much faster and eventually eliminate it – and you would have fewer creditors to worry about.

Working on paying off debt without an emergency fund

An emergency fund is essential because nothing can be guaranteed, whether it’s unemployment or car accidents. Most experts recommend keeping 3-6 months’ worth of expenses in an emergency fund. If you’re trying to pay off debt fast, it might take a while, but it has to be part of your monthly budget. 

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

Creating more debt

Those who do not have their spending under control, are suffering from debt, and still considering creating more debt are making a huge mistake. Trying to dig your way out of a hole is a sure-fire recipe for disaster. So, when you’re trying to pay off debt, stop borrowing.

Not changing spending habits

You will never get out of debt if you don’t change your spending habits. Get into the habit of having your coffee and breakfast at home in the morning, eat more home-cooked meals, and remember that you don’t need to buy clothes every week. By changing your mindset, your spending habits will significantly change.

Trying to become debt-free without any help

There is no shame in asking for help! There are several options available for anyone that needs  assistance with their debt. Popular debt help options include debt review, debt consolidation loans, debt settlement, or if all else fails, even bankruptcy. 

Not creating a practical budget

If you don’t have a practical budget, you will end up with thousands of Rands of debt without realising when it happened. That is why it is important to develop a realistic budget that addresses financial needs.

Closing credit accounts after they’re paid off

Don’t close the account after paying it off. In credit scoring, your debt is not the only factor taken into account, but also your credit availability. The presence of credit, but no use of it, is a sign of restraint, and can even improve your credit score.

Disregarding retirement savings

Despite our instinct to eliminate debt as rapidly as possible, it’s a costly mistake in the long run. Don’t let getting out of debt takes away from your retirement savings. As soon as you start working, contribute 5% to 10% of your income toward retirement savings. 

Not staying motivated by neglecting personal rewards

Rewards shouldn’t ruin either your budget or your mood. When celebrations are accompanied by a financial hangover, they’re not really celebrations. Spend a special evening out with your spouse or go to a concert nearby. Include the reward in your budget and pay it in cash.


How to avoid these common mistakes

Now, you know what kind of debt mistakes you need to avoid, but this doesn’t mean there are no chances of you falling into them. So, here are a few tips on paying off debt that will help you avoid them completely: 

  • Always check your budget.
  • Hide your credit card and depend on paying with cash. 
  • Share the cost with your partner or roommates.
  • Ask for a raise. 
  • Generate more income. 
  • Pay all bills on time. 
  • Ask for a rate reduction
  • Never hesitate to seek professional help. 

Getting professional help with a debt repayment plan

Speaking of professional help, many people who are struggling to pay off their debt miss out on the opportunity of allowing others to rescue them. 

Over-indebted consumers who need help handling complex debt situations can always count on debt counsellors who help them manage their debt repayment more efficiently and eventually become debt-free. They could even provide impartial, confidential, and practical advice or lend an emphatic ear.


Now, you’re set to pay off your debt without making these costly mistakes!

We believe that you deserve to live a fulfilling life, one free of debt and financial insecurity. It is up to you how your financial freedom journey unfolds. You can either strike out on your own or learn from others’ mistakes and successes. 

By following our tips and avoiding those debt mistakes, you can accomplish your financial goals faster, pay off debt, and keep more money in order to start building your wealth.

Do you know whether you qualify?

Find out if you’re eligible to reduce your debt and protect your belongings.

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.

Start managing your money better with Debt Restruct today

How to Explain Debt Review to Your Partner, Spouse, or Significant Other

red haired woman explaining debt review to her partner using a tablet in her right hand with a white wall and some plants in the background

Planning your future with your partner is vital to any relationship, especially on matters concerning finances. However, talking to your partner about debt can be difficult. Many people carry their own debt burden, making it even bigger and stressful.

Marriage brings two compatible people together, and also, in some way, it links their finances and debts. Money management can help couples reduce money stress and know how to avoid getting over-indebted. Also, good communication with your spouse can help you reduce too much pressure.

But what if your financial situation is getting worse and you are considering debt review to deal with overwhelming debts. Should you talk to your spouse about it?

Debt review is a debt relief measure that helps many over-indebted South Africans get out of debt. The process allows consumers to make ends meet by reducing their monthly debt repayments by consolidating their debts to make repaying easier, and helping them deal with the stress by talking to creditors on their behalf.


Telling your Partner about Debt Review

Getting support during these difficult financial times is necessary, and that’s where your partner comes in. It would be best if you let your spouse know about your financial situation as soon as possible. After all, they will be the first to know when something is not alright.

Talking about debt review can trigger negative feelings. But it’s better than keeping it from your partner, which can make life unbearable. Too much stress can result in heated arguments, mental health issues like anxiety, and poor communication.

If you have decided to talk about your debt, reassure your partner that debt review will help you deal with the problem. Debt counselling or debt review was enforced by the National Credit Act in 2007 to help over-indebted South African consumers repay their debts.


Explaining the progress you are making to them and the benefits of debt review will assure them that your debt problem will not be around forever. Working out issues together can solve many marital problems. This applies to finances also. Naturally, you can expect that a few questions may arise whilst discussing debt review with your partner.


Here are some of the questions you should expect:


How will Debt Review Help?

When you are over-indebted and opting for debt review, it is essential to explain the pros and cons of the debt review process to your partner. The key is to get the help that will build your finances up again. Debt review will give you and your partner legal protection from getting harassed by your creditors. Therefore, you won’t have to worry about creditors repossessing your assets or precious belongings.


While under debt review, you will not be able to make more debt through further lending. This is a valuable benefit which will protect you from getting into more financial trouble. And the inability to borrow more money will help you to repay the existing debt in the shortest time possible. The debt counsellor will negotiate a lower monthly repayment that gives you sufficient income to cover other monthly expenses.

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

Will Debt Review Affect Your Spouse?

During the debt review process, all income should be considered. If you are married, your partner’s income may be included according to your marital contract. But how exactly will debt review affect your partner?


When married in Community of Property (CoP)

Married in a community of property means that you equally share what you own. This also stands during the debt review process. When you are in this marriage type, you and your spouse will apply for a debt review process together. You both have to agree to start a debt review process before the application is processed. Remember, after the debt review process, you and your partner will be responsible for debt repayment.


Married outside Community of Property (OCOP)

If you are married outside the community of property, it means that you and your partner own everything independently. Partners under this marital contract are not obligated by the law to go through the debt review process together. This means you can apply for debt review independently.

Your spouse can rest assured that their finances will not be affected. However, a reliable debt counselor like Debt Restruct will guide you and your spouse through the best course of action, including a step-by-step guide to the debt review process.


The Result of Discussing Debt Review with Your Partner

As challenging as sharing your financial troubles with your spouse can be, it is vital to work together to deal with any situation that comes across your relationship.

Discussing your over-indebtedness and tackling it head-on will ensure that money woes won’t bring your relationship to a bitter end. 

You are not alone in this, Debt Restruct is helping thousands of South Africans build a better future with our trusted debt review service. Get in touch or try our assessment below to see if you qualify to start reducing your monthly debt instalment.

Do you know whether you qualify?

Find out if you’re eligible to reduce your debt and protect your belongings.

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.

Start managing your money better with Debt Restruct today