I failed too much when I was studying Chemical Engineering at Wits University, to the extent that I ended up finishing my degree 4 years later than I was supposed to. By the time I started working I was playing catch-up, my peers were managers and they had been in the workplace for four years while I was writing and re-writing exams. I had to buy a good car, upgrade my wardrobe, furnish the townhouse and there was too much to do and my graduate salary was just not enough to cover it all. The financiers were willing to give me all sorts of facilities, after all I was an upward mobile engineer, young, the right colour and the right gender. I woke up one day and realised I was in debt, the kind of debt that I could no longer service.

Debt slows you down and most people don’t know that. When you are in debt you spend tomorrow’s money today and instead of working for your future you end up working to fund your past. Most people use the approach of hiding your head in the sand when it comes to debt ( picture of a chicken hiding its head in the sand). We are generally eager to walk into bank, dealerships and retails stores to get credit cards, overdrafts, home-loans, vehicle finance, personal loans, clothing and cell phone accounts, etc. But when it comes to debt, most of us just hide and hope it goes away supernaturally.

If you are in debt, getting out of debt is one of your first steps to wealth creation and here is our 3 step process.

1. Know your numbers 

2. Find an extra R1000 
If you are going to be vigilant with dealing with debt then you can’t keep doing the same thing and expect different results, after all that is the definition of insanity. So either you cut your budget and find an extra R1000 (e.g. DSTV, reduce groceries, eating out, clothes, travel, beauty, etc.) or get an additional income (part time work, sell something, work overtime, etc.)

3. Attack your debt: Plan-Pay-Finish 
Plan: Look at the table from Step 1 and make all your minimum payments. With any money that is left over and the additional R500 pay off your lowest debt A. Pay off debt A and take all that money and add to debt B. Now you know how long it will take you to pay the debt,just pay it and finish.

If you get any additional money, no matter how small use it to pay the debt you are paying down at that time. Step 1, 2 & 3 is just the maths, the most important variable is YOU.

Paying down debt is boring, painful and seems a bit unfair because paying for last season’s fashion or for a phone that you have given away is just not exciting. This plan works and it is guaranteed to get you out of debt in 12-60 months and in 7 years all home loans could be fully paid. The biggest risk to this process is YOU, the man or woman who accumulated the debt in the first place. You are a human being and this is life. Life events will always come up to distract you and derail your process. Deaths, parties, burst geysers will always be there, just because you have decided to deal with your debt doesn’t mean you can put life on hold. Make sure that after you have addressed any emergencies you go back to your plan, a new pair of shoes is not an emergency! Be disciplined, exercise self control and delayed gratification and allow the picture of a debt free you to motivate you to stay on course.

Some people earn R80 000 and every month they only have R2000 left, what if you could have 50 or maybe 60 thousand? Would you have more choices? Free your income to build tomorrow and not just to pay for yesterday…