Many people battle with unmanageable debt but don’t know exactly where they stand. Being in the dark about how much you owe can sink you into even more debt as interest climbs and can lead to blacklisting, blocking you from accessing credit.
Research shows that 71% of indebted people are using large portions of their salaries to service debt.
Salem Nyathi, consumer financial education specialist for Momentum Group, highlights Experian’s latest consumer default index, which shows a 14% improvement in default rates.
“[This] means that fewer people are missing their credit repayments. At first glance many in the financial industry might see this as a sign that consumers are doing better,” says Nyathi.
“These numbers can create a dangerous illusion. What we’re seeing is not necessarily a real recovery in household finances. In many cases, it’s simply that banks and formal lenders are saying ‘no’ more often. The people who would have defaulted are just not getting access to credit in the first place.
“At the same time, households remain under intense pressure from rising living costs, especially food, transport and healthcare, while many salaries have stayed flat. To cope, families are often forced to look for other ways to get by, turning to informal lenders, instant cash offers or multiple small loans that end up costing far more over time.”
Nyathi says millions of people are being pushed into debt, cannot afford to pay it back and “become stuck in a cycle of borrowing simply to survive”.
“As the realities of the new year settle in, 2026 is likely to expose just how financially vulnerable many households still are. This makes now a crucial time for consumers to look honestly at how they are using credit, make careful choices, and start building financial resilience before the real pressures of the year ahead fully hit.”
She says having debt does not make one powerless. “You still have choices, and you can use them. Your first act of financial courage is simple, even if it feels difficult at first,” says Nyathi.
“You cannot fix what you refuse to look at. The first step out of unmanageable debt is to know exactly where you stand. Write down every cent you owe: who you owe, how much, the monthly instalment and, if possible, the interest rate.
“Debt should then be sorted from most dangerous to least, for example, loan sharks and informal lenders, high-interest personal loans, credit cards, overdrafts and retail store cards, and then lower-interest debts such as certain long-term loans.
“If you can see that you won’t be able to pay, don’t wait for things to get worse,” Nyathi says. “Talk to your creditors early and ask about lower instalments or longer repayment terms. Facing the truth is hard, but it is the only way to start taking back control.”
Nyathi says to get out of debt, one should break the cycle of taking credit to survive.
“One of the main reasons debt becomes unmanageable is that people use new credit to cover everyday basics such as groceries, transport and school costs, and then struggle even more the following month.
Before taking any new credit, she suggests asking a few honest questions: will this help you earn more money or reduce your costs in the long term? Or is it just helping you get through one month while making the next month harder?
“Avoid loan sharks and instant cash offers. They often come with extremely high interest and hidden fees that can quickly turn a small problem into a crisis. If you already feel trapped, rather speak to a qualified financial adviser than take another expensive loan. You need a realistic repayment plan, not another quick fix.”
Nyathi’s tips on how to build small debt resilience habits:
- Start a small emergency savings buffer: Even R50 or R100 a month, in a separate account, and use it only for real emergencies such as medical needs, urgent repairs or unexpected job loss;
- Before making a large purchase on credit: Wait 48 hours and ask yourself whether you truly need it, or whether saving up and paying cash would be the wiser option;
- Set defined limits on monthly financial support to family: And avoid assuming debt or opening store accounts in your own name on behalf of others; and
- Draw up a simple bare-bones budget: This covers only essential items, including rent or bond, food, transport, insurance and investments, electricity and other utilities, school fees, and minimum debt repayments.
“Cut out what you can,” says Nyathi. “Look at subscriptions like unused gym memberships and streaming services, takeaways, upgrades and other non-essential spending. Every rand you free up helps you breathe a little easier.”
