Now that we know why debt is bad for you the first thing you must do is to get rid of it.
What I would suggest is look at the ones you can get rid of the fastest and do that. Then look at the ones that cost you the most and get rid of them using the money you have now extra from the debt you were used to pay. Keep it like that and every new debt that is paid of add that payment towards your next bigger or more costly dept. One thing you just need to make sure is if there are penalties involved in paying debt off early and if there is ways to avoid these penalties by giving notice and what time period is associated with the notice.
The first and best rule to always remember is that you are the only one who cares about your own everyone else out there just want it for them. So if someone comes to you with a deal that is too good to be true, believe me it is and it will only cost you money in the end. So make the rule that you need to know who is getting paid for what and how much. I will come back to this topic in a later post.
Over the next few post I will show you what I have done so far. (Remember I am writing this blog as I am going along and I might make mistakes but this is the only way to learn.)
Firstly I know I was living above my means because I was sitting with a credit card debt of over R20 000! (About $3000 at that stage) And it was creeping away from zero in the wrong direction. I realised that I had to make a serious plan of changing my life style to pay off the debt. I was already working on average 11 hours work days and my health and relationship was fading away faster than what I realised.
The R20 000 was my credit card limit so when I hit it like a target and I could not get any more before the end of the month I got the wakeup call, I had to put fuel in the car to get to work the next day but there was nothing on the card to pay for the fuel, I was 33 and earned double what my parents did and I had to go and borrow money from them to get thru the month. That was it!!! Plans had to be made to change this around.
I started creating a budget and realised I am living R1200 short every month not even taking entertainment into account. This was the first step and most important one to make, the one where you actually realize you have to work of some sort of budget. If you are anything like me that is the most difficult thing to do. Plan a budget and stick to it. Over the next few years to date that had cost me more than what I realised at the time.
For this post I want to leave you with 2 rules:
1) Only you care about your money!
2) Have a budget!