Debt Solution for the Millennial
Mr. M is a 25 year old production operator for a security company who stays with his parents in Witbank. He has one daughter, three sisters and both parents, all dependent on him for financial support. He also pays for his little sister’s school fees.
After becoming over indebted through the burden of financially supporting his family, he was placed on debt review to rectify his financial state. Below is a table that sets out Mr. M’s income and expenses.
‘The young Millennial fell upon hard financial times when he took on more debt than they could afford, in order to support his family.’
| Income: | |
| Salary | R13,000 |
| TOTAL: | R13,000 |
| Expenses: | |
| Rent | R1,800 |
| Electricity | R300 |
| Water | R200 |
| Vehicle insurance | R700 |
| Food & household goods | R1,600 |
| Life, health & critical illness insurance | R300 |
| Bank charges | R200 |
| Mobile phone | R200 |
| Travel expenses | R1,200 |
| Contingency | R400 |
| Child Maintenance | R800 |
| Clothing | R300 |
| TOTAL: | R8,100 |
| Available for debt repayment: | R4,900 |
‘He could not afford monthly debt repayments, on top of essential expenses as his available money was less than half the amount needed’
As you can see from the above table, Mr M’s expenses add up to R8,100. As the total income is R13,000, they were left with R4,900 for debt repayment after expenses.
The below table sets out what Mr M owed towards the debt amount, on a monthly basis, before entering debt review.
| Debt | Interest rate | Instalment |
| Clothing account | 26.00% | R545 |
| FNB personal loan | 32.65% | R2,855 |
| Capitec multi loan | 32.65% | R4,800 |
| TOTAL: | R8,200 | |
| Over-indebted by: | R3,300 | |
‘Entering debt review with National Debt Advisors was the best decision Mr. M ever made.’
As we compare what Mr. M earns to the R8,200 they owed monthly, a troubling picture comes to light about their situation. Clearly, they could not afford their debt repayments, on top of their monthly expenses. This is why Entering debt review with National Debt Advisors was the best decision Mr. M ever made.
| Debt | Interest rate | Instalment |
| Clothing account | 1.31% | R99.37 |
| FNB personal loan | 8.22% | R1,336.47 |
| Capitec multi loan | 32.65% | R2,502.67 |
| TOTAL: | R3,938.51 | |
| Amount saved monthly: | R4,261.49 | |
‘Mr. M now only owes R3,938.51 monthly on debt repayments, which means he is saving R4,261.49 every month thanks to NDA’
The above table looks a lot more positive and realistic for Mr. M. It shows the new low interest rates and instalments that Mr. M’s debt counsellor at National Debt Advisors arranged with creditors. As a result, the family are able to afford their monthly expenses and debt repayments with ease.
Mr. M now only owes R3,938.51 monthly on debt repayments, which means he is saving R4,261.49 every month thanks to NDA. Moreover, NDA also arranged for the interest rates to be reduced, which means he will save a lot of money on interest too. Better yet, he won’t have to stress about law suits or repossessions due to non-payment of debts. Now that is something that can take the weight off his shoulders!
Check out our other case studies to read about how NDA has helped other clients achieve financial freedom.
