Tired of living from paycheck to paycheck
and end up giving the money to other people anyway?

Decide to be free!

 

Let me give you a few 'day to day' and 'month to month' money management tips I have found to be very useful myself to help ease the burden of my own debts. A lot of people do not know how to handle their money efficiently and correctly. I myself was one of them until I got tired of living on the edge every month. I did a bit of research on the internet and, from that info, I made pledge to free myself from all debt and to own my own successful business within 5 years.

Yes that is right, FIVE years, not instant money or instant success. It could be sooner if you suppliment your income with extra odd jobs or your business becomes successful sooner. But give yourself enough time.

Three years down the line, even though I am working full time for a boss, I can now safely say I am debt free except for the usual general daily costs. ie water, lights, school fees, food, etc. Plus I have since got divorced and am the sole supporter of two teenage children. The steps to my own financial freedom and business have been set and are in the process of growing in size.

How did I do it?

I researched and spoke to many people who are already secure in themselves.

I then made up my mind to succeed, to be a winner!

I would not take no for an answer.

You have the power to control your own life
and you will succeed once you have learned to step forward
and control your decisions and actions.

For instance, when you go shopping, don't take a big trolley if you are only going for bread and milk. Don't even take a basket. Just walk in, get those two items and then walk to the teller. Don't be waylaid by the magazine stand or the sweets counter. If you feel you don't have the power, ask someone who does to get the items for you. Even by doing that you are taking a stand against unnecessary spending. For every time you go shopping, drop R2 or R5 into a 'piggy bank' that you have in the kitchen.Then once a month, deposit that into a savings account you have opened or deposit it into your bond or home loan account to help pay that off quicker thereby saving you interest money in the long run.

Also watch out for driving far for a special that is being held. Ask yourself do I really need what is on special and will the cost of petrol be more than I'll save?

Don't pawn items. The interest is a killer and you end up paying the same price as a new product with your item still in the pawn shop. Rather sell the item privately or hold a garage sale and you'll have one bill less to pay at the end of the month.

Don't buy clothing on account! If you want something special save up for it or do without and if you have to have a clothing account, keep it on the 6 month interest free option, and pay in time. Don't let yourself off the hook. Keep to it and it'll become a habit.

Pay your accounts first then do your grocery shopping. You will find that only really necessary items end up in your basket if you have less money in your purse.

Always ask yourself as you are about to take an item It is a want or a need? If it is a want, do not take it until you know you have paid every one of the needs. And no, sorry girls, chocolate is not a need but it can be used as a special reward.

Make a list with three columns in it

Needs (not ending)

Have to's (limited debt)

Wants (not necessary)

Now write down your monthly expenses putting them in the column they should be in. I have used a few examples below.

Needs (not ending)

Have to's (limited debt)

Wants (not necessary)

Rent / home loan
Electricity
Water
Food
School Fees
Petrol (Unless you get a lift)

Edgars
Pawn shop
Telephone
Lawyers
etc

Videos
New clothing
Hair do's
Chocolates
Going to dinner
etc

You get the idea. Then put figures next to the needs and at the end add it all up.

Needs

monthly

Have to (limited debt)

Total of debt

Wants

Rent / home loan
Electricity
Water
Food
School Fees
Petrol (Unless you get a lift)

R1200
R200
R150
R800
R600
R500

Edgars
Pawn shop
Telephone
Lawyers

R3250
R1680
R350
R6800

Videos
New clothing
Hair do
Chocolates
Go to dinner

Total needs

R3450

 

R12080

 

Ok. Now split your salary (if you are lucky enough to receive one) according to your needs first. Then find out what interest rates you are paying on each of the accounts (or have to list) outstanding. Pay the higher interest account off first. (If you are prepared to lose or forfeit the items in the Pawn shop, all the better.)

Needs

monthly

Have to (limited debt) *annual % rate

Total of debt

Wants

Rent / home loan
Electricity
Water
Food
School Fees
Petrol (Unless you get a lift)

R1200
R200
R150
R800
R600
R500

Edgars *20%
Pawn shop *55%
Telephone *12%
Lawyers *32%

R3250
R1680
R350
R6800

Videos
New clothing
Hair do
Chocolates
Go to dinner

Total needs

R3450

 

R12080

 

*NB! Interest rates shown here are only an example and not the actual rates the companies use. Find out the real rates yourselves!

Phone the accounts department of the 'Limited Debts' and arrange with the lower interest rated companies to pay a smaller monthly payments until your situation is under control. Instead of R300 per month request to pay R150 or lower for a few month. Most companies are eager to help people take control of their finances.

If you receive a salary of R5000 per month then split your payments like this

Needs

monthly

Have to (limited debt) *annual % rate

Monthly Payment

Wants

Rent / home loan
Electricity
Water
Food
School Fees
Petrol (Unless you get a lift)

R1500
R200
R150
R800
R600
R500

Pawn shop *55%
Lawyers *32%
Edgars *20%
Telephone *18%

R700
R250
R150
R150

Videos
New clothing
Hair do
Chocolates
Go to dinner

Total needs

R3750

 

R1250

 

So the first two months you will not be able to afford any wants. Those will come to you at a date in the not too distant future. You can find cheaper methods of having these wants if you 'simply could not do without them' Get a friend to set your hair at home at the cost of a home kit from the grocery store, dye your old clothes a new colour using a dye from the local chemist or add ribbons or beads in a few strategic places. Tape the movies when you would normally be asleep. The ideas are limitless.

NB! Remember that just because you have an 'available' balance on an account does not mean you must rush out and buy new items! Get rid of your old debt first!

The fourth month should look something like this:

Needs

monthly

Have to (limited debt) *annual % rate

Monthly Payment

Wants

Rent / home loan
Electricity
Water
Food
School Fees
Petrol (Unless you get a lift)

R1500
R200
R150
R800
R600
R500

Pawn shop *55%
Lawyers *32%
Edgars *20%
Telephone *18%

Finished
R700
R250
Finished

Videos
New clothing
Hair do
Chocolates
Go to dinner

Total needs

R3750

 

R950

 

So you have managed to pay off two accounts, increased the remaining payments as promised. You now have R300 extra to save, fit into your payments or buy a want.

If you fitted the extra into the limited debts, within 8 months you have dropped from R12080 in limited debts owed to ħR4685!**

That is staggering isn't it?

Yes, there is light at the end of the tunnel after all. And by your 12th month payment - you should have finished your Limited Debts completely**, provided you did not make new debt or skip on payments.

**NB! This is based solely on the debt and figures above and not on what YOU actually owe. You need to set out a personal payment plan for yourself that suits your pocket using the guide above.

It could be paid off even quicker as 'needs' are lower on some months than others and you can shuffle the extra into one of your limited debts. (School fees are generally only payable over 10 months and you could organise lifts or get a bicycle to ride to work and get fit while you save!)

If you are good at your job, you probably will get an increase or bonus. Keep a portion of that to put towards your Limited Debts and pay them off sooner.

We'll continue this route to being Financially Secure in the next chapter soon to follow.

Please note this plan may not work for just anyone.

I am basing this plan on what worked for ME on a personal basis.
I am NOT a professional advisor.
If you have any queries or doubts, please see a professional DEBT consultant
who can help you draw up your own effective plan.

 

SEWOOD.CO.ZA, Sue Hulley and its associates disclaim all liability for any loss, damage, injury or expense however caused, arising from the use of or reliance upon, in any manner, the information provided through this service and does not warrant the truth, accuracy or completeness of the information provided.