MONEY CLINIC | How can I improve my financial position while paying off R188k in debt?

A Fin24 reader under debt consolidation is left with less than R3 000 per month, finding it impossible to make ends meet. He writes:

I have consolidated all my debt. My debt consolidation started in Sep 2017 and I pay R18 294 every month, which includes bond, car, loans, and credit cards.

I currently owe around R188k on all credit and loans, excluding the bond and car. My salary at the time of going on to debt restructuring was around R27K (net) as I worked on commission for nine years. Back in May 2019 my company restructured and my salary was reduced to a fixed amount of R23K (net). My debt consolidation does not cover insurance or levies as I stay in a complex. My levy is R2 000 per month as I was working with a tight budget I had to cancel my insurance. After my levy is deducted I am left with less than R3 000 and I am finding it impossible to make ends meet on such a tight budget. 

I have sought advice from the debt consolidation company, but they are unable to help me due to the court order in place, which requires me to honour the payment amount of R18k. Due to the court order, every bank that I have approached is unable to offer me a consolidation based on my new earnings. I have even explored the option of selling my house and car, but neither of these avenues have yielded any results. 

Could you provide me with any kind of advice to help improve my financial situation? Or options I can explore to make it more manageable. I have tried to manage with what I have, but it is very difficult to live in the current economic climate. Please help.  

Elian Wiener, finance and investment expert, and founder of Wealthwoke, responds:

Making ends meet on such a small budget is extremely difficult. Here are a couple of options for you to explore.

• The Reserve Bank recently cut the repo rate by 1%. Approach your debt consolidation company or an alternative one to see whether this could entitle you to a reduction in your monthly payments. This could save you a few hundred rands per month.

• Start a side hustle. Take a look at your existing assets and skills - perhaps you can use them to make some extra money on the side. For example, you could rent out a room in your house on Airnbnb or become an Uber driver. Maybe you have others skills you can put to commercial use - every bit helps. 

• Re-skill yourself. There are some great affordable online courses you could do to learn new skills that might make it easier to find a new job or line of work that pays better. 

• Renegotiate your salary. It appears that you were earning more before the company restructure. Put together a compelling case why both the company and you would benefit from moving back to a commission structure, where you have the ability to influence your monthly salary through hard work and dedication.

• Go through your bank statements with a fine tooth comb each month. Interrogate each item to see if it was an unnecessary expense or if there is a cheaper alternative you can go for next time. 

Questions may be edited for brevity and clarity.