Debt Consolidation Plan
Preparation Meets Opportunity
You may be concerned that taking out a debt consolidation loan will get you deeper in to debt and this is a legitimate concern, when considering the state of the South African credit market. However, we at Reduce My Debts can provide you with a practical debt consolidation plan, so you can avoid racking up more debt by sticking to the plan that your consultant draws up for you.
Don’t worry, we will make sure that your debt consolidation plan is tailor-made to suit your specific situation and factors in your living expenses and unexpected costs. Overall, the plan will require you to adopt budgeting and finance tactics that will ensure you are able to keep up with your repayments.
Here are some important tactics to help you stick to your debt consolidation plan.
Monitor your income and expenditure
Use a spreadsheet to track of all your sources of income, including your salary, bonuses, tax credits, dividends etc. Then track all of your necessary and usual monthly outgoing expenses – take into account everything from food to clothing, haircuts, dentist visits, domestic fees etc.
Total up each of the columns and then highlight the expenses that you could do without – these are the areas in which you will need to cut back so as to ensure you have enough funds to pay of your debt consolidation loan.
List your expenses in order of priority
You will need to be strict about your budgeting and therefore it is necessary for you to list your standard expenses in of priority so that you attend to items higher up on the list first. This helps you to ensure that all your essentials are covered. Some of your top priorities will naturally be rent/mortgage, food, electricity and clothing.
You will only be able to tell if you can afford monthly loan repayments, once you have detracted all of these must-pay expenses from your total income. Any money left over, after factoring in your repayments, should be saved for emergencies.