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Achieving Debt Freedom

Updated: Oct 4, 2019

It is said that only 3% of the population are good money managers

As a life coach, I coach myself continuously. Sometimes results are quick, other times, drive, tenacity, time and patience are necessary. So when a client struggles a bit to achieve a goal, they are in good company. I have had to work harder in some areas of my life to achieve expected results. I believe that success is a work in progress and a destination we all strive to reach.

We all have that one thing that is a big mountain in front of us, that no matter how hard you try to climb it, you still find yourself back on the ground. For some the mountain is addiction, or rejection, maybe letting go for someone else; for me it had been debt. We were very poor growing up, my sisters don’t share the same sentiments, but I really believe we had it rough. As a result of lack of reasonable exposure to money, I didn’t know how to handle money. This is the reason why I ran away from home when I first got a job. I had never seen so much money and I wasn’t willing to share my hard-earned salary of R607.23 per month with my dad.

My husband was very disciplined in finances, but I wasn’t. After my divorce, I fell into the debt trap and though I came out a few times, I would fall back and start again. I knew a lot about debt payments because there is a lot of information about this subject everywhere but application of what I knew only brought temporary relief, I didn't know how to have satisfactory and maintainable results to win the debt battle and enjoy ultimate freedom. After trying different things that failed to provide a sustainable solution I decided to try a different angle.

I signed up for a financial independence course, not accounting, but personal finance. I knew that I have money, but my relationship with it needed some work. There was a lot of misalignment and disorder in the way I handled my money, so I realized that things had to change. I was very emotional and I experienced many-a-teary moments throughout the whole course, I realized that I have been my worst enemy sabotaging my wealth and the future of my kids with the way I had been handling money.

I knew that I have money, but my relationship with it needed some work

The first thing I learned was to NOT come out of debt the way I got in.

How do we get into debt?

Through advertising

Media - Advertisers are watching you, adverts are strategically placed to entice you to buy something that you don’t really need. Watch the types of adverts that appear when you are watching your favourite program, look at the timing of the advert. Close to pay day, you will be bombarded with lots of sales and special deals. During a sad program, funeral policy adverts will jump at you. Around the festive season, Coca Cola will be on all the billboards, they will be big and bold, with bigger names, some you haven’t heard before. All these brings excitement around November and December, not so much in January.

By the 26th of December, after you have spent all your money, Jet, Pep and Ackerman’s will have school uniforms displayed on their windows, CNA and Game following right behind with stationery. By this time, you are completely broke and you haven’t had a good sleep since the 25th of December. Schools need registration fees by the 6th of January, and African Bank will be giving you a breakdown of what you can do with a loan they’ll give you, from a laptop, registration fee, lobola, a wedding ring or wedding dress to a holiday in the Bahamas, coupled with a gold credit card. BFS will be setting up a table for you, those delicious sausage rolls and assortment of cool-drinks of theirs, and the friendliest staff in the whole world, you don’t stand much chance. They are all within their rights to advertise to you. None of this is illegal marketing. All clean.

Banks – banks encourages you to use your card to make purchases with the promise that it is cheaper to do that, maybe it is, but then while you swipe, a friendly bank employee is watching your every move. As soon as you receive a salary increase, she will be all over you with an offer to upgrade your status with an overdraft and a gold card. As soon as you hear words like upgrade and status, you immediately think you have arrived, you accept more debt.

Middle class poverty – this is when your money or salary increases, and you immediately upgrade your lifestyle. You want a better car and a better house. Holidays at grandma’s are no longer attractive, hotels become the order of the day. As a result of upgrading your lifestyle, you realize quickly that your money is not able to keep up with all your new expenses; so you end up thinking you need a better paying job with the hope that job-hopping will solve your cash flow problems – it will not. Tightening your belt will.

How to pay off your debt

Avoid cheating on your partner by committing financial infidelity. This is where you hide your spending habits from your partner with secret purchases that you hide in the office and in the boot. It is normal practice that in families one partner is responsible for certain financial responsibilities, say school fees, house and car payments for the husband and clothing, groceries, insurance and policies for the wife. Be honest and say if you are not able to handle your responsibility, because if you don’t acknowledge your weakness, that is when you will be getting secret loans to service your secret purchases. Include your personal spending monies to your budgets, this eliminates financial infidelity and gives you freedom to spoil yourself, that way you don’t hide your purchases.

Find out how much of what you are paying actually goes towards servicing your debt, you will be surprised to find out that the bulk of what you are paying goes towards interest, that is why it takes very long to pay off some debts.

Do not pay your accounts in the store, the tills are strategically placed towards the back of the store to seduce you to shop around, by the time you get to the tills, you have shoes, socks, a jersey, and a whole lot that you did not plan to buy. Set up a debit order instead.

If you have not been able to make payment, say for a month, make an arrangement to bring this up to date. Do not pay “whatever you can afford to pay”. This nice statement should not excite you, it means interest continues to be added onto your debt and your debt keeps growing more and more, and it will be difficult to control your debt.

Do not get a loan to pay another loan, even if the new loan appears to charge less interest. Don’t do it.

Run away from offers such as taking a big loan but only pay what you spent. It is not possible not to spend it all, and you will find yourself trapped needing the whole amount again and again. It is a never-ending depressing bondage that you should avoid at all costs.

It is said that only 3% of the population are good money managers. Let’s aim at being counted among the 3%

#debt #freedom