Don’t be despair if you feel like drowning in debt and think as if there is no way to escape the debt trap. You can retire your debt and be free from its burden once you develop the right discipline, good planning and a measure of sacrifice.
Thousands of Filipinos who are saddled with debt accumulated slowly over the years by simply living beyond one’s means, sudden emergencies
that one force to borrow, lack of financial planning and more. If you want to find solutions to your problems, first thing you must do is to look back and see how it all started.
It may all started with small debts. A mortgage there, a personal loan here plus other mini debts that we accumulate. It seems small until one day, you find your debt out of your control. You feel helplessly drowning in debt.
Take immediate action before debt paralyzes you both legally and financially. To effectively cut down your debt you need to have two level-actions. Behavioral and financial.
Let us take a look at the seven steps to help you surmount your mounting debt:
Take A Hard Look At Your Finances
This is the first and important step. Know how much money you earn, how much money you spend and how much money you owe. I know! You may be surprise on how much money you owe but you need to be strong. Face it! Determine which debt you have to prioritize.
Make sure to prioritize debt with very high interest rates. As much as you can, do not take another debt to pay your existing debts. It a big NO NO!!
By understanding your finances, it will allow you to come up with an effective and workable solutions.
Restructure The Most Expensive Loans
If your budget won’t permit you to pay all your loans as soon as you can, you may want to ask for a loan reconstruction given the low-interest rate environment. I know you hate the shameful feeling. We all do. We easily shy away when discussing about our finances.But talking to your credit card provider about loan reconstruction is way better than delaying your payments and suffer from paying high interest rates.
While taking note of penalties and transactions fees, make sure to study all options that are available to you.
Slash, Not Just Cut, Your Monthly Expenses
Take a serious look on your lifestyle. Find out where you can scale back. Determine what areas in your life you spend so much. If you spend so much on entertainment or other unimportant things in your life, cut it drastically! Focus first on growing your finances before spending so much
on entertainment or luxurious things that are not important.
Forget expensive vacations, fancy dinners, expensive hair treatment and all. Find more affordable alternatives. Find activities that allows you to save or spend little to no money at all.
You’ll be surprise on how much you can cutback if you discipline yourself into slashing unimportant expenses.
Sell Assets. Raise Cash To Retire Your Loan By Selling Off Assets, Big And Small
Do you really need two smartphones? Do you really need those expensive bags and shoes? Those jewelries sitting in the closet may help you a lot in freeing yourself from debt.
Find things you don’t need that are still saleable in the market place. Big or small. Find and sell those things. Clutter free and debt free. How good is that?
Find Additional Income Sources
If slashing your monthly expenses and selling your asset is not enough to pay your debt, today is the perfect time to find additional income source.
You may not know it, but you have more resources that you can think to help you pay off your loans.
If you are good at graphic designing, writing, or encoding, you can sell your services both online and offline.
If you are good at making cakes and other desserts or if you are good at cooking, you may start selling them to your family and friends. Make use of your Facebook account with thousands of friends. Promote your products or services on your timeline to gain customers/clients.
If you are good at selling stuffs online, you may want to become a reseller of beauty products, clothes and others. There are many ways you can find to make additional income even from home. Determine which skills make you more money and focus on it. You may never know. Maybe in the near future you can grow your additional income into a real business. Make use of your skills and hidden talents.
Live Below, Not Just Within, Your Means
To make a drastic change, you need to change your lifestyle. Identify a lifestyle that is below your means so you can have more money to pay for your debt and soon more money to save. You may need to live a less luxurious life than you use to and consume less. You can still dress elegantly and stylishly with inexpensive clothes. If you don’t mind wearing an “Ukay-ukay” clothes then, you don’t need to worry maintaining your elegance or stylist look.
Live more by spending less. Use your creativity. I know you can do it! Of course, you can!
Pay Off As Much As You Can
The longer you are in this situations, the stressful it can get for you. It maybe hard in the beginning, super messy in the middle but in the end, it will be very rewarding. Pay as much as you can. Work as hard as you can. Cry as much as you can. Until you paid off all your debts. It won’t be easy but it’s simple. You need to make those sacrifices because you let those things happen. You need to face your responsibility. You need to fix it.
As soon as you can. Those uncomfortable situations and feelings are necessary on your way to getting out of debt. Embrace it. Until it’s done.
Stay focused. Don’t lose sight on your goal. You need to free yourself from debt. Don’t allow it to ruin your future. ACT NOW! I know, it’s scary at first. You may have a lot of doubts but you need to take the first step to save your self from drowning.