Become debt-free by avoiding the causes

Many South Africans buckling under the heavy weight of debt describe a sudden, ‘overnight’ realisation of the size of their financial dilemma. The gradual build up to a financial meltdown seems to go unnoticed until one day, often in a person’s mid- to late twenties, when he/she makes an assessment of the future and sees only crippling debt.

Whether you are already in the process of professional debt relief or considering getting professional assistance, it is valuable to go back to the root of your financial dilemma, in order to avoid the mistakes that led to your debt in the first place.

To become and STAY debt-free, the following mistakes should be avoided at all costs:

  • Not working with a budget or spending plan. It is vital to set clear spending goals: without them, you will have minimal chances of staying out of debt. You cannot afford to lose your extra income towards high-interest monthly credit payments. A clear and fixed budget will help you live within your means and make it possible to build up an emergency fund.


  • Making irresponsible purchases will make it almost impossible to become debt-free and destroy any progress you’ve started to make in your debt repayments. Self-discipline is the key secret to becoming and staying debt-free. Aim to weigh up the consequences of every purchase and avoid those that will steer you away from your ultimate goal: living a debt-free life.
  • Purchasing a new car every few years. Buying a new car when you are only a few months away from paying off your current car loan is not a financially sound decision, even if you have a steady income – in fact, it will defeat your best efforts at becoming debt-free.

At ZeroDebt, we understand the stresses of debt and can help you free yourself from the debt cycle. If you see no way out of debt and cannot manage your financial obligations, ZeroDebt offers professional and expert debt relief services. Contact us at 087 702 1738. ZeroDebt is registered with the National Credit Regulator.

Emergency fund: how to start one?

Why is an emergency fund so crucial to your financial health?

  • It will decrease your debt. In times of emergency, people with no emergency fund usually turn to the faithful credit card: this means your debt repayment will most likely be the first thing to suffer, digging you even deeper into debt.
  • It will smooth out your budget.Without an emergency fund, you will have to re-adjust your budget at the first sign of an emergency expense. With an emergency fund in place, budgeting will be much simpler and less stressful.
  • You can prevent late fees. If you are living from month to month, it is inevitable that there will be times when you cannot pay a bill on time, or the only option is to overdraw your bank account. An emergency fund can help prevent these financial lows.
  • You can finally get ahead. It is very stressful to play catch-up every month. If you have an emergency fund your financial stress will decrease, because you can pay bills in advance.

Most people know that an emergency fund is essential and have good intentions, but lack the knowledge to build up one. These are some solid strategies for putting deed to word.

Selected strategies for building up an emergency fund

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  • Start small.  Every little bit helps – just start.
  • Automatic deduction. Setting up an online savings account works: this way, your contribution is automatically deducted each month.
  • Treat your fund contribution as a bill.  If you add your emergency fund contribution to your list of bills, it becomes a non-negotiable and you won’t spend it on unnecessary luxuries.
  • Reduce your spending.  Have a look at your budget and see where you can save money, then use that money towards your emergency fund.
  • If you pay off debts, don’t spend that money.  As soon as you finish a payment, e.g. a car payment, be careful of spending the money you used to contribute. Rather, take the amount you were paying to that debt and use it for your emergency fund.
  • Quit smoking or drinking.  No need to elaborate: you will save significantly if you kick the habit.
  • Limit your access.  At one time or another, you will be tempted to spend your savings. If you know your self-discipline won’t always be what it should be, a good solution is to put your savings an account that is hard to access, e.g. having it roll into a CD or Treasury bond.
  • Save tax refunds or bonuses.
  • Save your change.  You will be surprised to see how those coins add up.
  • Skip dessert.  Save the money you would have spent in an envelope and see how it adds up. This one has the added benefit of losing weight!
  • Stay in.  Cook and entertain yourself at home and put the savings into your emergency fund.
  • Freelance.  Use the extra income towards your emergency fund.

Money mistakes during different life stages

NCR help KZN government host workshop on debt counselling

The KwaZulu-Natal government, in partnership with the KwaZulu-Natal Financial Literacy Association (KZNFLA),

South Africa’s number of over-indebted consumers is worryingly high. People are guilty of general financial mistakes, for example not applying self-discipline and splurging on unnecessary items, not saving, not having a spending plan, etc. Due to the fact that each life stage presents us with different needs, there are also very specific mistakes, linked to different ages.

To stay debt free and financially secure, steer clear of the following financial blunders.

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In your 20s: Living above your means. Not saving for retirement


  • Very few people earn enough money in their 20’s to afford luxuries like travelling, the latest car, fashion, etc. Those that do over indulge end up with large sums of debt in the long run. A budget is non-negotiable.
  • Don’t fall for the illusion that retirement is far away. It is crucial to start saving as early as possible to ensure a comfortable retirement.

In your 30s: Combining finances. Delaying insurance

  • Many individuals in partnerships tend to combine all of their income with their partner or spouse. The possibility is always there that the relationship might end, leaving them off less financially stable than had they kept some of their finances separate.
  • A safer idea is to have a separate account for your income and share expenses equally out of a joint account. Also, keep any investments in your own name.
  • Insurance is an essential expense. The younger you sign up for insurance policies, the lower your rate is.

In Your 40s: Funding further studies over retirement accounts. Not saving enough

  • The more you can save and the sooner you save it, the better. It is easier to contribute a small amount of money monthly than a large sum at once. It is not pleasant to realise you’ve turned 60 and have no retirement savings.
  • If you have children, avoid helping them pay for their further studies at the expense of your retirement funding. Do what you can do to save for both, but place your retirement needs first.

In Your 50s: Co-signing on a loan. Getting too defensive with savings

  • Nowadays, merely preserving capital is not a sustainable financial solution in this age group. Ensure that your money grows to avoid your bank account drying up.
  • If you have children, be cautious of co-signing to help them with big purchases

In Your 60s and Beyond: Underestimating medical expenses. Overlooking your income

  • Beware of simply living off your retirement funds. It is crucial to keep on proactively building and maximising your retirement funds. Use them to continue earning income, e.g. via stable dividend stocks, CDs or bonds that offer regular payments.
  • Do not underestimate health expenses: rather build in future medical needs into your retirement savings plan, and consider purchasing long-term care insurance.

So take that first step. Simply call us directly at 087 702 1738 or contact our supportive debt counsellors via our contact page. Dont have the time? Request a Free Call Back and one of our counsellors will contact you! Zero Debt is a certified Debt Counselling company.