Get Out of Debts This Year

Debts are ok to have but on the other hand they can be a nightmare. If you have asked your friend to lend you money and not repaid on the date agreed you are not credit worthy. If you don’t know the total amount of debts you owe you are heading in the wrong direction. If you have lost friends because you owed them money and failed to pay you are not credit worthy. If you no longer answer strange numbers because your creditors could be calling you are not credit worthy. If the landlord has kicked you out more than one time because of unpaid rent you are not credit worthy.

The fact of the matter is at a certain point in our lives we will have creditors and it’s not unusual to have them. However when your liabilities exceed your income then you know you have a debt problem and you need to sit down and make an exit plan of your bad debts. 

Here are the basic steps to get out of debts

•     List all the debts you have so that they sum up to the actual figure.

•  Classify them in order of priority; list in order of urgency.

•  After they are in order of priority start clearing the least debt to the highest. This will motivate you to see you can get off debt.

•   Draw up your budget to ensure all essential needs are met first; food, shelter, transport to work... In your budget cut down on luxuries as they can be used to offset the debts.

•  From your assured monthly income have a stated amount to offset the debt.

•   Talk to your creditors and commit yourself to clearing the debt little by little till it’s cleared

•   To ensure discipline you can agree on fines if amount stated isn’t paid without notice. This instills discipline

•  Plan a reward for yourself once you get off a debt. Keeps you motivated.

Above all remember a journey to a million miles begins with the first step. Just as you have over the years accumulated debts, you can over the years get out of debts. Many have done it and I want to believe you can too. In all you do don’t forget to ask God to guide your steps. If you have a family it’s important that you involve them in this exit plan so that they understand why certain luxuries will have to be forgone.

If it’s possible for you to pay off all your creditors and remain with one the easier it will be. However ensure that the creditor you chose to remain with doesn’t charge you higher interest than which you would have paid had you paid creditors individually. What I am saying is if there is a place one can borrow money that is more flexible in terms of payment plans go for it. For example a family account; one can borrow money from the family pay off all their creditors and remain paying back into the family account. Caution should be exercised on this one too so that one doesn’t become too lenient in clearing the debt as family should never lose their trust in you due to money as it can have dire consequences.

This year is the year to instil financial discipline. It is possible to live within your means.