Struggling with debt in South Africa? Follow these 5 proven steps to help you regain your financial freedom. Get expert tips and smart solutions from Old Mutual today! 

Ever feel like you're running on a treadmill that's going just a little too fast? Like you're working hard but somehow never quite getting ahead? If debt keeps you up at night, you're definitely not the only one feeling the pinch here in South Africa in 2025.  

The 3 biggest debt challenges South Africans face:

• Did you know that according to Debtbusters Q1 2025 Debt Index, for every Rand the average South African earns, around 69 cents goes straight towards paying off debt each month? That doesn't leave much for everything else, does it?  

• It's also interesting to see that even folks earning a good salary – over R35 000 a month – are feeling the strain, with some owing almost double what they earn in a year, reports Debtbusters.  
• And sadly, over a decade, from 2010 to 2020, consumer prices in South Africa rose by 65%, significantly eroding the buying power of the Rand. This means that an item that cost R100 in 2010 would have cost R165 in 2020, effectively reducing the buying power of R100 by approximately 39.4% over that period, reports the South African Reserve Bank. 

Debt can start small, but if you don't keep a close eye on it, it can quickly grow into a heavy financial burden. Some people find themselves in a tough spot, borrowing more just to pay off what they already owe, and the interest just keeps adding up.  

But here's the hopeful part for 2025: By taking proactive steps and, with Old Mutual’s help, you can tackle debt. Let's look at five simple steps that can help you take back control of your money and start moving towards a brighter financial future.  

1) COMMIT TO A DEBT-FREE WAY OF LIFE

To get rid of debt, you've got to make some tough choices. It's going to take some willpower to stick to a financial plan. Make that decision today; no more saying "just this one thing" or making excuses like "it was a small loan and I really needed that new gadget”. Getting out of debt requires small steps that can turn into good money habits.  

2) CREATE A BUDGET AND START SAVING 

The next thing to do is make a simple plan for your money – a budget. You need to be honest with yourself about what things really cost.  

Cut out what you don't really need: that fancy TV package you barely watch? That gym membership you signed up for but haven't used? You might need to say goodbye to them for now. Be tough here. Think about what you truly need, not just what looks good.  

Create your budget: Once you know what the important things are, put them into simple groups – rent/home loan, regular payments, food, transport, electricity etc. Some of these, like rent and regular payments, can be the same each month. For things like food and transport, keep an eye on how much you're spending so you don't go over.  

Make your money go further in 2025: When you start cutting costs, you might be surprised at how much more you can do with your money. Look out for good deals when you buy food and maybe buy in bulk if it makes sense. If you're paying a lot for your bank account, see if there's a cheaper option. Any money you save on things like banking or food could be used to pay off your debts faster.  

3) CREATE AN EMERGENCY FUND

Having a small pot of money for emergencies is important if you want to stay out of debt. If you don't have a ‘rainy day’ fund when something unexpected happens – like a pipe bursting at home or your car needing fixing – you might have to take out another loan. So, how much of a backup plan do you need?  

That depends on a few things in your life; think about the things you own that might need fixing or replacing unexpectedly, like your car or home appliances and try to save a little bit to cover those costs or alternatively, you could be covered by short-term insurance.  

4) IMPROVE YOUR CREDIT SCORE

Your credit score isn't just something they look at when you want to borrow money. It can also affect the interest you're already paying. Companies that lend money often check how risky their customers are, and if your score isn't great, you might end up paying more interest. So, it's a good idea to try and raise your credit score.  

Luckily, there are a few simple things you can do in 2025 to look less risky to lenders:  

• Pay on time, every time: Don't miss any payments. Set reminders if you need to.  

• Spend wisely: Don't borrow money for things you don't really need.  

Read more about credit scores here or, get a free credit score (if you don’t already have one) here.  

5) CONSIDER CONSOLIDATING YOUR DEBT

A debt consolidation loan is putting all your smaller loans into a bigger one. Sometimes, this can help people who have a lot of debt that feels out of control. It can offer a simpler way to manage your payments and, in some cases, the interest rate on the big loan might be lower than what you were paying on all the small ones, potentially lowering your monthly instalments. However, it's important to be aware that consolidation loans often come with a longer loan term, and while this can reduce your monthly payments, it might result in paying more interest and fees over the entire life of the loan. 

You can find helpful resources online to understand how it all works. At Old Mutual, we offer many ways to help you put your debts together. Our solutions are designed to help you manage your debt more effectively with potentially lower monthly repayments and structures that work for you, making it a smart way to gain control and work towards getting out of debt.