The big 'D' also known as debt can put a wet towel on anyone's finances if not handled correctly, it can also spiral out of control if you have no plan on how you will reduce it.

The good news is that the Minister of Finance, Tito Mboweni, has announced that our gross debt-to-GDP ratio has declined from 46% to 26 percent. But what does this mean for you and how can you put practical steps in place to decrease your debt? Here are ways in which you can start dealing with your debt.

Know what you are dealing with

Thinking about handling debt in its entirety can be overwhelming. Therefore, it's always better to break it up to understand where you currently stand. Write down or create an excel sheet of all the debt you owe, starting from the smallest to largest.

Once that is sorted it will be easier to prioritise the debt that you would like to tackle first. Tackling debt that has a higher interest rate first can make it easier to handle the smaller ones later on instead of playing catch-up when you reverse the process.

You may be able to take advantage of the lower inflation rate that has been proposed by the minister of finance in the recent budget speech that will be combined with the lower interest rate reduction that was announced earlier this year.

Re-evaluate your budget

Debt is always a reminder that you need to re-evaluate your budget. Your budget can be the source of what helps you overcome debt and what causes you to snowball into more debt. It also requires an honest conversation on your end to ensure that you create a realistic one that can help you cut back on debt.

Assess which areas you can reduce your spending on and how you can adjust your lifestyle to improve your contribution towards reducing your debt. Keep in mind that being able to contribute an extra R100 on your payments can help reduce the period of time it would have taken to pay off your debt.

Close accounts or cards that have been paid off

The trick is to avoid accumulating more debt once you have paid it off.  Once you have paid off your debt, such as a clothing store account, close it if it is no longer needed. Always keep in mind that whatever debt you take on needs to compliment your budget instead of subtracting from it. Close credit cards and accounts that you have paid off and hardly use to avoid relapsing into more debt.

What happens to your debt when you die?

As much as you might be working hard towards minimising your debt, tomorrow is not promised. The last thing you would want is having whatever debt you may have accumulated being transferred to your loved ones. Having something like life cover in place can ensure that their financial future is protected and whatever debt you may have accumulated is paid off so that they do not have to worry about it.