20/01/2017
HOW YOU GET OUT OF DEBT.
THE PROBLEM WITH DEBT.
Debt is generally a result of bad decisions. We are all born with a clean slate, but because of bad decisions we begin to get into debt, which is more often a comsumption debt. In other words it is akin to eating tomorrow today. We prefer to spend tomorrow today and pay our debts tomorrow although tomorrow is never assured.
The credit culture is not a good one, but marketers know that for their bottom line to change then they need to ensure they capture your consumption today using credit cards and then pay later.
Credit cards are fast catching up in the Kenyan market; there are at least one million and the number is rapidly increasing. But if you are disciplined, credit cards can be a very good source of easy money. Their beauty is that you have the freedom to spend, but their problem comes about if you are buying without knowing how you will be paying.
THE WAYS ARE.
The first thing you need to do is to decide to get out of debt, in any case, life is about decisions and ir reallu a sum total of all the decisions that are made. If I don't take the step to decide then there is no motivation to take any action. (You are where you are today because of decisions that have been made for you and others made by yourself.) To determine your direction you must work your way out of the debt.
Secondly, you need to stop making purchase on credit cards gives you 60 days credit, you can literally borrow, invest and return within the twi months
Remember that, if you are in debt, you need to stop piling more debt. Just say, "No more credit card debt". If need be, say it enough times untill you believe it.
Thirdly, establish some debt reduction plan and I suggest that you follow the plan below;
1. Set your goal to get out of debt. This could be, "By 23 March I will have cleared all ny debts". The goal is important because it motivates you to work towards it.
2. Consolidate the monies you owe. How much do you owe and to whom? How much interest are you paying? Money borrowed from relatives and friends doesn't usually attract interest. You can arrange pay this last since there is a certain level of comfort from such relations.
3. Prioritise the debts. Arrange the debts from smallest to the largest and the one that has the least number of payments. Make those payments first, It is the ability to make small payments that motivates you to clear your debts.
4. Move from debt to saving. The money yoi have been using to pay your debts can now be sent to you savings account in readiness for investment.
The borrower is a slave to the lender. Every time you borrow, you make yourself subservlent to the lender.
high.
Raham Rangel Abramz.
