If you don't keep a close eye on your debts, they can easily snowball, leading to sleepless nights and early morning visits from large, muscle-bound men from debt collection agencies.

"But if you do find yourself in debt, it's never too late to fight back," says John Maxwell, MD of Virgin Money. "The start of a new year is a great time to review your finances and to be honest about what you owe. Debt, like halitosis, won't just go away until you face up to it."

1. Prioritise

If you are swamped by several debts, start by placing them in order of priority. If you are struggling to pay your home loan or rent or other living necessities such as the electricity bill, then these should be paid first. If your debts are from personal loans, credit or store cards then rank them in order of the highest interest rate first. What do you mean you don't know what the highest rate is?

2. Budget

Draw up a budget which will allow you to see how much money you have left at the end of each month to spend on debt repayment. Writing down details of what you spend will also enable you to see where you could cut back or make sacrifices and help control future spending. People are often stunned when they realise how much they're fritting away on cocktails with umbrellas in them.

3. Switch

Switch to a cheaper credit card and you could take advantage of the 0% interest balance transfer offers to provide a breathing space. Plus you should choose a card that has the lowest interest rates for debit balances; it can save you tens of thousands of Rands a year.

Make sure you cut up your old card so you are not tempted to use it now that it is balance-free. Cut 'em up good and bury them in the garden. Like Chucky, these cards have been known to come back to life.

4. Cut

Cut up any store cards to avoid temptation and write to the companies to cancel your account. If you don't do this, they will reissue the card when it expires and you will find it hard to resist unless you've been locked up by your creditors.

5. Speed up

Speed up your repayments if you can. The sooner you repay your debts, the less they will cost you. The minimum payment on your credit card may look like an easy way out but if interest is mounting up, getting your finances straight will take forever and make banks more bloated with your cash than they already are.

If you're good, we'll give you five more tips next month.

Other sections in this Issue
Extra goodies
Past Editions