One young woman who was drowning and floundering in debt was able to lift herself out of the financial doldrums, by taking steps to remedy her situation, and by making changes to her bad money management habits. She made some smart financial moves, and now her future looks brighter and more promising than ever. Well, what exactly did she do? She dealt with her limiting beliefs that were hindering her from making great financial strides, and now she is so proud of her achievement. Read on and listen carefully to this young professional’s amazing (story) interview.
Sindi: I am Sindi Zungu. I am 34 years old and I live in Daveyton. The last few years have been tough for me. I lost my Mom a year ago, she had throat cancer. As if that was not enough, I suffered another blow, towards the end of the year Ex-boyfriend and I broke up and I found out that I was expecting a child. I was not in a good space, I thought I had lost my mind.
Zinzi: I’m so sorry to hear that about your Mom and the breakup with your boyfriend. Congratulations on your bundle of joy. What prompted you and paved the way to wanting to become debt-free?
Sindi: There were several things going on. My Mom had been very ill with cancer for quite a long time now and her medical bills were piling up. I was looking to change jobs to earn a better salary or start a business. But… I was struggling to find something to leapfrog to. At the same time, I was dealing with about R300,000 worth of debt.
I was feeling helpless, frustrated, stressed, having sleepless nights always feeling down, exhausted and so sorry for myself, But I knew that somehow I needed to take control of my financial situation and nobody but me had to take the necessary steps to remedy this chaos that was wreaking havoc not only in my life but my growth and progress.
I got in touch with Zinzi, an acquaintance of mine with whom we went to the same school and who is now a Financial Well-Being Mentor (you can also call her a financial expert/pro), who has helped me to calm down and explained a few things to me. Now looking back, I feel so silly and it is unbelievable that I had fallen into the debt spiral (pitfall). Had it not been for me taking action and getting in touch with her, I am absolutely convinced that I would still be drowning and have even gotten into a deeper hole, still to this day.
For instance, my Mom’s increasing medical bill can be largely recovered by her medical health insurance and any extras covered by our savings. Luckily, she had prepared for it before her retirement as a nurse. The main focus point now that Zinzi really wanted me to pay attention to, was how to manage and control my debt and get out of the death trap immediately. I was this close to becoming bankrupt, and she literally took me through, held my hand, and helped me understand the entire process. It wasn’t going to be easy, yet it was possible if I was willing to take action.
Zinzi: So what did you do? How much debt were you carrying and did you manage to pay it off and how long did it take?
Sindi: I paid off R270,000 in the last 4 years and I’m on track to pay off the balance by the end of the year. Then, I just have a small amount of my student loan to take care of and I now will look financially strong again. Firstly I must say that I had no clue how much debt burden I was carrying then Zinzi suggested that I had to first do a credit health check, which is absolutely FREE to establish how much and the size of the debt I was in.
We then checked the 3 most used and popular Credit Bureaus in South Africa, ie. Transunion, Experian, and Compuscan just to mention a few Zinzi explained that it records and stores a database of all your total credit (debt) that you have taken out, it shows outstanding balances, how much you paid, are still paying, and owe each creditor each month, and what your credit score is? And that is how I found out how much I owed and I was horrified when I saw those reports.
Zinzi: Do you mind telling us more about the debt? What was it?
Sindi: When I started working, I had 4 credit cards, including 2 store cards, a car loan, and a student loan. Perhaps my biggest mistake was buying a brand new BMW MINI Cooper, which at the time I thought was a status symbol to display to my colleagues and neighbors that I was moving up the career ladder. I regret the decision and am very angry with myself. I have since learned that all these lies that we have been fed all along were just fallacies, seduction, and an excuse to get us into more debt.
Zinzi: Where did you find the cash to pay off your debt?
Sindi: At the time I worked for one of the banks here in South Africa as an Assistant Accounts Manager. They paid me decently but then a friend of mine convinced me that I should be doing my own thing. I had always dreamt of starting a baking business, but have never believed in myself that I could. The good news is I have already started my business and am still in the growing pains phase, there is still a lot of work to be done. I am happy to report that It is starting to take off very well.
Zinzi: What sacrifices did you have to make to get yourself out of debt?
Sindi: I sold my car and once I did that I began using public transport again to travel every day. My route is relatively easy and it gave me a chance to read or catch up on my emails. I also put an end to indulging in daily coffees from places like McDonald’s and Mugg and Bean and weekend movies. As much as I love to indulge in these financial bad habits that when calculated over a period of a year was costing me a lot of money that I could have saved or invested or paid off my debt. That is the first lesson, a wake-up call and realization that I learned.
Zinzi: What money-saving tips can you share?
Sindi: Budget, budget, and budget again, I know it sounds crazy, right, I also cringed when I was reminded about it, but what other choice did I have to get out of this insanity that I was digging deeper and deeper into for myself? Funny, my Mom always preached, taught, and used it, so I don’t know why it took me this long to realize the importance and the role it played in our lives, but when Zinzi and I got together we started using it again. I cannot tell you the relief it brought to my life, as I was living close on edge of disaster.
All you need is the simple basic Budget Workbook and record all the regular expenses you have. Now have a serious look at them and see where the unnecessary indulgencies are and where money is leaking out of the money bucket and taking you nowhere close to your future financial goals. You will be surprised by how much money you can save just by doing this exercise alone.
I used all that money to clear a lot of my debt, as I said before, it was not easy, but doable and all it needs is patience, discipline, and consistency. Yes, I also needed to work on the self-limiting beliefs that were sabotaging and holding me back because of the excuses I had playing over and over in my mind avoiding the use of the helpful tools that my Mom gave us when we were young.
The following frugal tips below I have learned have helped me get out of debt for good
Learn and understand Needs vs Wants
There are things in life that you need to live on a daily basis (basic needs) and then there are other things that are just luxuries (wants) period and we must learn to distinguish between the two areas and not get them confused.
Learn to keep a list
When it came to grocery shopping, I would always have my list with me in my bag, so I would buy my groceries and other goods all in one shot, either at the month’s end or the beginning of each month. I also realized that by doing this, I saved money on transport too. Where possible, I buy in bulk as it is cheaper.
Watch those credit cards
I got into trouble by using those small thin pieces of plastic that I thought were offering me convenience without understanding the financial trouble they would get me in later. Now wherever possible I pay with cash with my debit card right out of my bank account in that way I know exactly how much money is left in my account, no second-guessing. I now keep 1 credit card for absolute emergencies only.
I got tech smart
That meant I disconnected my fixed landline at home and saved most of my communication costs online and offline, limited only to the internet and Whatsapp where possible. I also became strict about turning lights off in rooms that were not used, my electrical appliances, and my geyser when not in use.
I learned to cook even better at home by eating healthy foods
I learned and tried a few new recipes and made a point of making more food than I needed each dinner so that I had something to take to work the next day, as they say, healthy life wealthy pockets. I hardly ate out of the restaurant with girls’ night out and as a result, I saved even more money. I had lost most of my friends through this exercise I realized that it was costing and demanding more out of me than what I put in and it was not effective and efficient in serving my life in the long run. I am grateful I did.
Zinzi: Now that you are almost debt-free and are managing your finances and saving regularly, have you made any big purchases with cash, since starting your debt-free journey?
Sindi: I am very lucky that I still have my Mom’s house, which she bought and paid for ages ago. While I have not made any big purchases yet, I am working on saving for a second-hand low-maintenance car in the future to help with my business as well as my bundle of joy. I have plans to learn a new skill set, such as dropshipping and affiliate marketing, that will help in generating more revenue that will eventually boost my business.
While I work towards that goal (2-3 years), I do not plan on any major splashing out yet. In this short time, I have managed to build up a solid emergency fund to cushion myself against any unplanned incidents or events, and I am proud of the work that I have put in. I now see the results of the sacrifices I made are now paying off.
Zinzi: Thank you for sharing your story with us and the audience (readers). What is the best part about becoming debt-free? What does it feel like?
Sindi: Becoming debt-free offers peace of mind from the debt trap and money stress, which is priceless. I sleep better and no longer worry about who I owe money to. I have since realized and learned that once you get control of your debt and manage your finances better and begin to save regularly, everything else becomes easier to grab any investment opportunities that are available out there for me, my family, and my loved ones.
The air I breathe is somewhat refreshing and different from where I am right now. I encourage anyone who is willing to undertake the journey to remedy their financial chaos while they are still young, time is ticking by and you will never get it back, so time is too short to waste on living on borrowed time. Make it count while you can, so start today!
Thank you for reading and indulging in the blog post. Please share your own journey to becoming debt-free, and you are welcome to exchange ideas on how to improve your financial situation. Please leave your comment below, and we will definitely engage. Thank you once again for gracing us with your presence.