Financial freedom starts when you empower yourself to take control of your future. Join Winnie Kunene, Money Psychologist as she helps Violet beat the burden of debt.
Violet was the winner of the 1Life Win a Financial Makeover competition. That means she will have seven sessions with me, Winnie Kunene, Money Psychologist and trustee on the board of Truth About Money. You can get to know Violet by reading the blogs where I report back on our first and second sessions. Read on to find out what progress she has made this month.
October has been a big month for Violet, because she’s managed to make some serious progress with her debts. Turning your finances around is usually about taking small steps, but last month, Violet made a major breakthrough - she repaid her staff loan a month earlier than it was due to be paid up. This loan was being paid back at R1 000 a month, which was deducted from her salary, so this month, she now has that extra cash to allocate to her other debts, which is a real win for her. We had a celebratory “high five”.
If you remember, we are using the snowball method to tackle Violet’s debts. The snowball method involves putting any extra money you have into your smallest debt to eliminate it as quickly as possible. This gives you the boost of finalising one debt – and freeing up the cash you were spending on it – to motivate you to tackle the next smallest debt. It’s definitely working for Violet.
Now that she has the extra R1 000, Violet will allocate R510 of the funds to the R490 she is already paying back to Ackermans, bringing her total repayment up to R1 000. At this rate, she’ll be done with this debt by February 2018, which isn’t very far away at all!
That leaves R490 of the extra money she now has. Violet is going to split R450 of it between her other debts, and the other R40 goes into her pocket. This was her decision – and I think it’s a good one. Every little bit she pays back eats into the capital and interest that she owes, helps her to pay back her loans faster and brings her goal of living debt free a little closer.
Knowing that there’s an end to her troubles has clearly made her happy.
Violet tells me that she’s “sick and tired” of having these debts hanging over her head, and that she will never do this again. Having a goal and someone to give her direction has made Violet much happier and more at peace with her finances. She says she’s sleeping better at night and has even gained some weight. Knowing that there’s an end to her troubles has clearly made her happy. Bravo, Violet!
What has really struck me about going through this process with Violet is that things are already so much better for her – but it’s not as if someone has given her extra money or taken away a debt. She’s doing this all herself, with the money she earns each month. It’s amazing what a little financial guidance can do for a person. I am proud to have met Violet and to be a part of this incredible journey with her.