Lessen the emotional impact of debt by paying off debt to close ties first
Once you start living in debt, it's hard to get out. The more you spend, the more you need to start paying off debt to ensure you don't enter a debt black hole. That's why you end up borrowing from friends and family to make ends meet. It's no wonder that more than half of all South Africans feel they'll never be financially free from the debt cycle, as Visa's recently released Wealth Worries Survey suggests. If you're one of them, here's a way to ease the emotional impact of debt…
In the US, millions of people are begging for work at any wage, with the middle-class forced into ever-increasing debt
. “Meanwhile all the income and wealth accumulates at the very top,” writes Dave Johnson on the Seeing the Forest
And now, Visa’s Wealth Worries Survey reveals a similar situation in South Africa, with more than half of middle-class South Africans saying they fear they’ll never be financially free.
“Almost 90% say they have average debt repayments of more than R7,000 a month,” writes Mamello Masote on the Business Day’s BDLive
Here’s why you need to take on less debt and now to live debt-free sooner
is without doubt the biggest hurdle to wealth creation and is often the main reason people are unable to save. Unfortunately, debt
accumulation is often a matter of hindsight; most people over the age of 40 will tell you that if there was something they would redo, it would be to take on less debt
,” said personal finance expert Maya Fisher-French in the BDLive
But what can you do if it’s too late to avoid taking on debt
Here’s a way to ease the emotional impact of debt
One method you can try is the “debt tsunami”
Here, you pay off your debts
according to their emotional impact.
This works because “managing money isn't always simply a math problem, it’s largely psychological and emotional too,”says Melanie Pinola on the Lifehacker
That’s why paying off debts
according to emotional impact might feel more ”freeing” for you than simply paying off the one with the highest interest rate
first, especially if it means paying back a family member to prevent tension in your relationship, adds Pinola.
So assess the emotional and psychological impact your debts
are having on you to decide which debts to pay off first and you’ll feel debt-free