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I have a confection to make I have a pile of debt oh well it not much of a secrete because if you knew me personally you would most likely to knew this already. Some of my debt date back in my collage days (aka students loans) that is way back 10 years ago. As much as i’ve made progress in terms of paying back some of my creditors it still not good enough so am trying to come up with the plan that will speed up the process and help me save something in order to help me not fall back on borrowing while at the same time maintaining me and my family.

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I’ve calculated all of my debt and came up with the figured of $43040, you see in dollars that us the manageable sum but in my currency [i’m South African] well I am screwed to say the least. I’m hoping to pay it back within three years or less if my business pick up some steam, apart from blogging I took the liberty of registering a company.

Pay back creditors

As much much as we wont like to admit it at some point we will have to pay back the money owed and the sooner the better. Currently i’m earning the average of $2000 per month from my business which is not much to enough. While my expenses both business and personal equals to $560 [again in my currency it it so little] so far and will definitely increase as the business grows. I decided to put at least $1000 per month toward my debt, the sum that will most likely place $36000 after three years and the debt of less than $7000. That it self would be great but i’m hoping [betting] that the business pick up and increases it income which it turn would free me to increase the debt repayment.

Save one cent at the time
A little goes a long way that saying is so much true when it comes to saving. While I don’t have the luxury of working a full time job and it benefit of retirement saving, I have to make an extra effort when it comes savings. While normally this would not enter my thoughts but things have changed in three years or I now have responsibilities like my nephew whom i’m a legal guardian too. Although my brother took steps to make sure his kids are taken cared off in the form of trust fund but I still have to save for extra securities. Calculating from my current earnings I thought I should create a savings account and put it about $250 for the next twenty years. I could or should increase it as my income increase but so far $250 will give me at least $60000 in the next twenty years.

Buy Cheap

Most people including myself we opt to buy the most expensive items and I must admit although it took me a while, I now look for savings the most. Often we pay for the brand other than the product, we can save even more when buying things like used car instead of brand new one and are plenty of reliable used cars out there. You might just get a great deal on a car that will last for years with relatively little maintenance. You can get more bargain on online action sites for electronic products two of my previous phones were second hands purchased online.

How much should I save?

The question differ from person to person and While I do believe that anyone working should save a portion [preferable 10%] of their income we should take into consideration our different needs are not the same and not all of us have the luxury of the full time job. %5 -%10 of your income should be the base more if you can afford it.

The first priority in my case is the retirement savings followed by the mortgage. Even though I don’t need a house at the moment but I do recognise value in owning your own property. Currently i’m leaving with my three sisters in the family house that we inherited from our mother -think the series Charmed without the magic. So i’m putting aside $150 towards the house and gradually increased it after I paid off my debt. The money will be strictly saved because I wont be looking at any houses for at least i’m debt free but would come handy when I do.

The idea is that in the next three to five years or so I will have at least $9000 placed toward the house which in my currency is about R110000.

Can you live a debt free lifestyle? The answer is yes it might appear impossible, but many people are successfully it. A world without debt is possible you just have to take it one step at the time and have a plan because the little you save the better.

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Constance Khuzwayo

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