Conquering the Debt Mountain

Debt has become so normal that it has risen faster than the increase in household incomes.

According to a report a report by the SA Human Rights Commission that was released last year on the current state of South African finances, over half of South Africa's credit-active consumers are over-indebted.

I remember growing up and my mom saying to me, “We can’t buy that because we don’t have the cash for it.”  Times have changed.  We no longer need cash to buy anything anymore.  Now we buy things as long as we can afford the payments.  We’ve exchanged delayed gratification for delayed consequence and the consequence might be delayed retirement.

Today we live in a world where debt is so accessible. Just on Friday I threw out another letter giving me a pre-approved credit card with a R25,000 limit.

There was a time when the financial industry encouraged loan repayment as a financial strategy for retirement planning.  Today, the banks are offering lines of credit, credit cards and other loans.

Today, every financial institution is eager to issue a loan or a credit card because it is a profitable business, which is why it’s so heavily promoted but incredibly damaging to personal wealth building and financial security.

For many of us, monthly savings have been replaced by monthly debt payments, which may be the reason savings rates are so low.  We’ve now exchanged the pursuit of actual wealth with the pursuit of perceived wealth from overspending.

Getting into debt can happen seemingly overnight. Digging your way out can take much longer. It's easy to feel overwhelmed when you're carrying credit card debt, car loans, student loans, home loans or all of the above.

Too often when we are carrying consumer debt, it negatively impacts our ability (and our motivation) to save.

If we are to conquer the debt mountain and put ourselves on the path to financial freedom then we need to make a dramatic change.

So, the next time you go to the bank, think about what is really in YOUR best interest, not what just sounds easy and helps the bank make more money.

And if you have a mountain of debt, don’t wait to pay it off. Make the arrangements now to do what you can to pay off your debt as quickly as possible. Your finances, and your life, will improve.

If you are in debt and you need help please get in touch with the The National Debt Mediation Association via their website.