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If you are feeling the crunch of the depressed global economy and trapped in never-ending debt repayments, the idea of getting out of the debt trap with just R200 may sound too good to be true.

But Valerie Leeming, executive director of Interface, an employee financial benefit schemes company, says it can be done. "Just like the story of the woman who transformed an entire mountain by planting one daffodil at a time, one day at a time, until the mountain was covered in a blanket of brilliant daffodils, you can transform a mountain of debt one step, one day at a time."

Here are the first 10 steps to a new debt-free life, starting with just R200. Just take that first step!

1. If you really want to get out of debt, some discipline is required. Don’t get into any more debt!

2. Draw up a budget. In the expenses column, list the following:

   • Fixed amounts you pay every month such as your bond, rent and car repayments.

   • An average amount for the variable monthly expenses including water and electricity, phone accounts, credit card payments, account payments, food expenses, petrol, clothes, entertainment, etc.

   • Occasional expenses including licence renewals, vehicle repairs and maintenance, annual membership fees, school fees, home repairs, birthday presents and so on. Then divide these amounts by 12 to give you an estimate of what you should be putting away each month to cover these annual expenses.

3. Highlight the non-essential items in your expenses list and find R200 that you can save every month. Alternatively, you could 'create' an extra R200 by getting better quotes on your car and home insurance, or your medical aid.

4. Draw up a spreadsheet with four columns which lists all your debt noting the creditor, the amount you owe, your monthly repayments and how many installments are left on your repayments.

5. Pick one of your short-term, high-interest rate debts identified in step four. Pay the extra R200 you have saved in step three into this account every month until that debt is eliminated.

6. Now the R200 is available again, as well as the installment you were paying on the debt you have eliminated. Say the monthly installment you were paying on this debt was R350; you now have R550 (R200 + R350) per month available to pay extra into the next short-term, high-interest rate debt on your list.

7. Let’s say your repayment on this second debt account is R300 per month. By paying an extra R550 per month, you should be able to pay it off fairly quickly.

8. Once the account is paid off you now have R850 (R550 + R300) to tackle the next debt on your list and so the process accelerates until you are debt free. And to think, it all started with just R200.

9. When you are finally debt-free, save! Ideally you should be saving between 10 and 15 percent of your income over and above your pension or provident fund, life assurance and retirement annuities.

10. Take control today and by this time next year, you will be well on your way to enjoying a wealthy, debt-free lifestyle.

(Click here for Personal Finance Editor Kabous le Roux's unorthodox (yet simple and practical) advice for getting out of debt.)

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