Escaping debt and living a life of financial freedom

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Samke was debt-free by 27, three years ahead of her plan.
Samke was debt-free by 27, three years ahead of her plan.

PERSONAL FINANCE


When 26-year-old Samke started her Money Makeover journey, her goal was to be debt-free by the age of 30. However, just a few months after celebrating her 27th birthday, she had achieved her goal and was living the life of financial freedom. This achievement was why she was named the winner of the 2019 Absa/City Press Money Makeover Challenge.

Once an energetic and happy woman with a strong drive to help others, Samke admitted that her financial burden had sucked the life out of her.

She said:

I was on antidepressants and had stopped looking after my body. I had even stopped doing the things I enjoy, such as reading.

Living debt-free seemed like an ambitious target, as Samke was swamped in debt, living off her credit card, and juggling living expenses and family demands by taking on expensive, short-term loans.

“The financial pressure came when I started working. My first job used to pay me R3 500 and transport was R800. I used to give my parents R1 000 and I had to take care of my needs as well.

“Not having any financial education or awareness made me vulnerable to all the offers I would get from financial institutions.

PODCAST: My Money: How to plan for a lifestyle change

“No one offered to teach me about different investments or savings plans, but I was always offered loans. In a way, it made me think that I could afford the ‘new’ lifestyle I was living, as I had been a student and money to me was a dream.

“Instead of that habit stopping when I got a new job with more money, it just escalated, and I was offered more loans. One day I found myself deep in debt, not able to pay and not coping. It just felt like I never had enough money.

“Things got worse when I got retrenched. I was in and out of jobs that offered me half of what I used to earn. The lifestyle I was used to became too much ...

Since I work in finance, it hindered me from getting jobs because no one wants to hire a finance person who has a bad credit record.

“I also had family obligations, since I come from a disadvantaged background. I needed to take care of things and make sure that the family had enough to get through the month.”

When Samke entered the Absa/City Press Money Makeover Challenge, she had just started a new job with a better salary and wanted to take the opportunity to start making better financial decisions. She worked with an Absa financial adviser, who helped her draw up a proper budget and form a repayment plan. By sticking to her new budget, she found an extra R1 000 a month that she could use to start paying those debts.

With the support of her adviser and the motivation to stay in the Money Makeover bootcamp, Samke experienced a financial and emotional transition.

Within six months, she had settled her short-term debt and built up an emergency fund. Her goal of being debt-free by 30 was fast-tracked by three years.

READ: Making a plan for protecting your legacy

She also experienced a significant personal shift.

“I am no longer depressed; I am much happier and more open. I now go to the gym and I have changed my look completely.”

She also laid down boundaries when it came to her family commitments. She set an amount in her budget to support her family and learnt to say no to additional financial requests. She also had to review the amount she was giving to her church.

As someone who believes in giving, she had to realise that the only sustainable way to give is to make sure that your own finances are stable. Due to her more robust budget, she was able to manage a financial setback when her mother needed to be hospitalised, without tapping into credit or her savings.

The Money Makeover Challenge takes six individuals through a bootcamp over six months, during which they transform their finances.

This year’s Absa/City Press Money Makeover candidates have been selected and will soon start working with their advisers to create their six-month plan. We will be kicking off with their stories on June 19. Follow their journey and apply their lessons so that you too can use this year to turn your finances around. Watch these pages and follow the Money Makeover Facebook page @CPMoneyMakeover for more.


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