Debt can negatively affect your confidence, ambitions and relationships.

It is about much more than money and it can impact your mental and physical health.

According to a World Bank report, South Africans were the biggest borrowers in the world in 2014. Between 2013 and 2014, 86% of South Africans took out a loan.

Debt affects different people in different ways. While one person may suffer anxiety over just R1,000 of credit card debt, another may not think twice about their debt until they see a loan and credit card balance top R200,000.

Regardless of the amount, here are some of the common emotional issues associated with debt:

Loneliness
People close to you start avoiding you and you start feeling isolated. Friends and family are uncomfortable around you. They might fear that you’ll ask them for money that they think they’ll never get back.

Stress
If you are worrying about money, payments, bills and debt, you’ll naturally start feeling stressed. Stress can wreak havoc on your health, work and personal life. The more your debt grows, the more anxious you become.

Frustration
As the amounts you owe increase, you might feel a bit hopeless. You start wondering if you’ll ever be debt-free.

Fear
Debt makes you scared. You’re afraid to answer the phone in case it’s yet another lender harassing you. You’re afraid to check your mailbox in case you find another warning notice. What if your possessions are repossessed?

Shame
Most people that have mountains of debt feel embarrassed about their financial situation. You might feel ashamed of yourself when you compare yourself with friends and family. At work you might be worried about what your colleagues think of you.

Physical illness
Our mental health has an impact on our physical well-being. To make matters worse, treating illness might require money!

The benefits of paying off debt go well beyond the money. It can benefit you psychologically. It can bring back your self-esteem and lead you on the right path. It can instill a sense of determination that will assist you in remaining financially healthy. Whether you are close to the finish line or not, here are some ways debt payments can help restore balance in your life.

1. Budgeting
Budgeting is your first step. You should work out what your monthly expenses are and what costs need to be cut for you to make your monthly debt repayments.

2. Paying off debt
There are two methods you can use to get rid of debt: the snowball and the avalanche method.

Using the snowball method, you pay off your debt by balance, starting with the smallest debt. This method works well if you need to stay motivated to keep reducing that debt.

The avalanche method focuses on paying off the debt with the highest interest first. This method is the most cost effective, efficient and fastest way to get out of debt but requires a lot more discipline.

3. Contacting your credit providers
If you can’t meet all your financial obligations and keep up with monthly repayments, you’ll need to contact your credit providers.

You can either visit your creditors in person or phone them and try to negotiate easier payment terms. Creditors are usually open to negotiating easier payment terms if you’re in a tight position.

4. Debt consolidation
A consolidated loan is a loan that is taken out to pay off smaller loans, thus reducing the number of payments made in a month, as well as the amount paid monthly.

While a consolidated loan might seem like a good idea, there are disadvantages that you need to consider before taking the leap. Remember, debt consolidation doesn’t get rid of your debt, it’s simply the same debt in another form. You should also calculate how much interest you will pay on your current debt and compare this amount with the interest you’d be paying if you take on a consolidated loan.

5. Debt review
If your debt has become unmanageable you could consider debt counselling. Your debt counsellor will inform your credit providers and the various credit bureaus that you are under debt review. Both you and your counsellor will then map out a debt repayment plan that fits into your budget.

6. Boost your financial skills
Many companies recognise the importance of promoting better physical and mental health and wellness for their employees. Now some of these same firms are joining a growing number of employers that also help workers better understand their personal finances and improve their financial fitness.

Why don’t you ask your employer to set up a financial support programme at work to help employees struggling with debt.

Your net worth is not your self-worth. You are not a bad person because you are in debt.

Accept the mistakes that got you into debt and work to be practical.

It is important to understand that debt it temporary. It’s normal to feel completely overcome by the money you owe, but all you need to do is take small steps to regain control again.

Take it one day at a time and keep going.

eBook: A step-by-step guide to paying off debt
Download this free guide for advice and information on getting rid of your debt, including how to choose the best debt repayment method, contacting your creditors and making repayment plans. You will also learn how to budget, save & invest to stay out of debt.

Read this article on 9 ways to get your employees out of debt:
https://www.sage.com/za/business-resources/essential-reading/9-ways-to-get-your-employees-out-of-debt

* SOURCE:
http://www.news24.com/PartnerContent/shocker-south-africas-debt-stats-20151204