Terrified because we are drowning in debt

I am in my 40s and married with three children. Both my husband and I are employed.

I am in my 40s and married with three children. Both my husband and I are employed.

Two years ago we bought a new house and two new cars. We also used our credit cards and bought new furniture and appliances on hire purchase.

Everything was fine until late last year, when interest rates, the petrol price and everything else went up.

We are spending more than we earn and are getting deeper into debt. My biggest fear is we will lose our home.

What can we do?

Worried, Johannesburg.

Sister, I have no doubt that your story is the same as that of thousands of other South Africans.

The first question is: can you two do anything to extend your income? A second job, perhaps at night, or a weekend job or work as freelancers or consultants?

Can you turn a hobby into a source of income? Are any of your children old enough to get part-time work and help?

What about selling one of the cars? That way you cut out a big payment every month. The same goes for furniture and appliances. Is there anything that is paid up that you can sell to pay off other debt?

Don't go into new debt by taking a loan to pay off existing debt.

The only way to get out of this is by biting the bullet and cutting down wherever you can. No more meals out, no DVDs, no hairdressing bills, no new clothes, no luxury food.

Don't use the cars unnecessarily and save petrol, cancel the M-Net or DStv subscriptions, no pocket money for the kids and so on.

See your bank manager about merging accounts to cut down on bank charges. Every cent you can push to pay off your debts will help. Good luck.