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Winnie’s plan for beating your December debt

Winnie Kunene

By Winnie Kunene  January 16, 2018

You need a plan to tackle your December debt. Money Psychologist Winnie Kunene has the solution. 

You wouldn’t believe the number of people I speak to every year who get themselves into trouble over December. Holiday debt is the gift that keeps on taking away large chunks of money from your pocket! And this debt can be with you the whole year, or even longer. If you fell into the debt trap this past December, here are my pointers for getting out of it, as quickly as possible.

Sit down and work out how bad it really is – and be honest!You need to do a calculation of how bad your debt situation really is. This means adding up your credit cards, personal loans, retail cards and any money you may have borrowed from friends and family. Include the debt you had before the holidays – you need to know how much you owe in total.


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For now, if you have a car loan or a home loan, you can leave those out of the calculation. We will talk about them further down in this article.

Banks and retailers make money off the interest that you pay them.

Don’t just pay back the minimum amount you oweYou have the power to influence the extent to which all this debt takes control of your life. Understand that the banks and retailers make money off the interest that you pay them when you owe them money. The longer you owe them money, the more interest you pay. Therefore, it is in your best interests (wink!) to get rid of debt as quickly as possible by overpaying on all your repayments.

Choose your debt-beating method There are two main approaches to paying off debt. The first is the snowball method. In this method, you identify the line of credit with the smallest amount owing, and pay extra into that account until it is paid back. Then tackle the next smallest amount for extra repayments, until you work your way through all your debts. This is the method I prefer because each time you pay off a debt, it will give you a psychological boost and motivate you to move on to the next one.

The other approach is the avalanche method. This one involves finding out which of your lines of credit has the highest interest rate and paying extra into that account until it is closed, and so on. This method makes the most mathematical sense because the higher the interest, the more money it is costing you each month, so it’s a good idea to get rid of it, BUT I find that it can be hard to calculate and it doesn’t give you the motivation that the snowball method offers. But if you think it will work for you, then go for it.

Look at how you can cut your expenses Of course, all this extra money for paying off debt has to come from somewhere, so you are going to have to make some lifestyle adjustments if you are serious about the process. Plan to hibernate until at least Easter, and spend money only on the necessities like food and transport.

Tell your friends and family!There’s nothing to be ashamed of when you are doing what needs to be done to get rid of debt. Plan cost-free socialising like picnics in the park, at-home movie nights or pot-luck dinners so that you can still see people. And if you are supporting family members, let them know that they will also have to cut back – within reason – until you have resolved your debt. The sooner you’ve paid back your debts, the more money there will be to go around in future.

Now tackle your car and home loans Car finance and home loans fall into a different category because they are funding large and necessary assets. But even though they are so-called “good” debts, there’s no reason you should accept the minimum repayments on these either. Once you’ve got into the habit of killing debt off quickly, start paying extra into your car or home loan – even paying a small amount extra every month can take months, or even years, off your repayment term, and save you thousands of rands worth of interest.

Learn from your mistakes Debt is not a permanent state of being. You don’t need to live like this. Get into the habit of saving – you need savings for specific goals as well as for emergencies. This way, you shouldn’t need credit to get by. Avoid store credit and credit card debt completely, and start saving now (or as soon as you’ve paid off your debts) for next December so you don’t fall into the debt trap again next year.

The views and opinions expressed in this article are those of the authors and do not necessarily represent or reflect the views of 1Life or its employees.

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