How to Dig Your Way Out of Debt

From a recent Wonderful World Survey, we know that almost all of us (95% in fact) want to prioritise being financially independent and free. If we’re to do this, we’ll need to get debt-free first.

If you’re struggling with debt, you may feel like you’re in an ever-deepening pit. Instead of being able to climb out of it, your expenses keep rising and the pit keeps getting deeper. This isn’t just bad financially, the stress of debt is bad for your emotional and physical health too.

So instead of waiting to win the Lotto (spoiler alert: it’s not gonna happen), here are some simple ways to begin to dig your way out. Think of yourself as standing in that pit with a small shovel. Each time you put one of these tips below into practice, you’re taking back some ground and putting it beneath your feet. It might not seem to make a difference at first, but slowly, steadily, as you continue to take back ground and put it where it belongs, you’ll begin to rise up and bury that debt, once and for all.

  1. Cash in on a reality cheque 

We live in a world and time that tells us we can and should have it all. But that’s simply not really true or possible. If you’re to get out of debt once and for all, you first need to change the way you think about a lot of things, not just money. You might need to readjust your definition of needs and wants. You’ll need to face the facts spelled out by your bank figures… those numbers don’t lie. First, be clear about your present costs. Do you know exactly how much you currently tend to spend and on what? This knowledge is the starting point and it’s an absolutely crucial step toward achieving real financial freedom.

  1. Make a money plan

Sadly, none of us can have a money tree but we can all have a money plan. It’s time to plot your budget and work out exactly how much debt you’re in. When you budget, you’re spending in theory, on purpose, every cent you get before the month begins. Many people view a budget as a straight jacket, but when you see that a budget is just spending your money with intention, you’ll actually experience more freedom than before. Give it three to four months to start working. Remember to budget your debt repayments as a top priority. It won’t be perfect the first time you do it and you’ll probably need to adjust it as you go. There are some amazing apps that can help you as you navigate the rocky road of learning how to stay in control of you money. I recommend Old Mutual’s 22seven app.

  1. Ditch the debt, from smallest to biggest 

It’s time to deal a blow to that debt – one small shovel hit at a time. Depending on what kind of debt you have, try to get rid of the smallest amounts first, just so you can feel like you’re getting somewhere and also to simplify your life and debts. Alternatively, look at the interest you’re paying and work toward paying off the one with the highest interest rate first. If you’re in heavy debt, the NCA protects you from being over- or surprise-charged, and their debt counsellors are well worth considering.

  1. Cut up the cards

Clothing accounts and credit cards are very often just the pretty, plastic gateways to debt pits. Much better to save up for the things you want. Buy your clothing cash. Don’t use a credit card unless you have the discipline and money to settle the full balance every month. If you do choose to keep one, set a low limit on the amount you can borrow from the creditor – and tell them not to increase that amount without your permission.

  1. Dig really deep…

Not into more debt, but into your own habits and tendencies that got you into debt in the first place. Try to unlearn all the bad habits, whether it be shopping when you are broke or going out a lot to forget. We each need to find our own way to a happiness that can’t be bought or sold.

That’s true freedom – and it’s interest-free.

Written by: Julie Williams – Lifestyle Editor


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27 thoughts on “How to Dig Your Way Out of Debt

  1. Phathomhle N. says:

    A strategy that has worked for me is what l call The Big 3. In general, there are three debt repayment strategies that can help people pay down or pay off debt more efficiently. Pay the smallest debt as fast as possible. Pay minimums on all other debt. Then pay that extra toward the next largest debt. I hope this helps someone.

    My friend [email protected] has joined rubybox.

  2. Thabiso H. says:

    This article was very insightful, as someone who has quite a lot of debt, it will be very helpful. I know now to budget every month and to cut up those cards, they have been a mess.

  3. Philani N. says:

    Thank you ManBox for this information, this is very useful even though in reality this is challenging considering other factors that are forcing us to always indebted to something.

  4. Philani N. says:

    Thank you ManBox for this information this is very usefully, even though it’s very difficult to match what’s on the paper vs reality but all it takes it’s a discipline and respect for money.

  5. Maldwin W. says:

    This is an interesting post and I have looked at all the routes listed on them, yet each month I feel myself slipping into that ever deepening hole and now its no longer a hole, but quicksand starting to pull me further in … This is the harsh reality for those who are in debt … along with depression, acts of violence amongst other things. Try paying a bond, raising two kids, owning a vehicle, and being the sole bread winner in the family then this whole is no longer a pit, but a mine…