Pssst…. The secret to crushing debt is out, and it is time you start taking notice
When Rehana Cajee lost her job during the covid pandemic and her husband just four days later, she knew she had to find a way to make ends meet. She says the first six weeks after her husband’s passing were the most difficult, but her Annique business gave her the motivation she needed to provide for her three children, all of whom were of school-going age.
Rehana’s story of unemployment and mounting money woes is not uncommon. According to data from debt counsellor DebtBusters, consumers in South Africa need to spend around 63% of their take-home pay on debt repayment. Additionally, South Africa’s economy is characterised by low levels of economic growth, high levels of unemployment, inflation rates above 7% and a cycle of increases to the repo rate – increasing the cost of credit, says Chris Blair, CEO at remuneration firm 21st Century.
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Paying back debt requires a dedicated plan. Experts advise that you prioritise debts according to the interest rate you pay, starting with the highest interest rate first. Attack your most expensive load or debt first and pay the minimum required amounts on other debts. When your biggest debt is paid off, move to the second biggest, and so on.
Let’s face it. It’s one thing to have a debt repayment strategy, but another to get ahead and pay off these debts.