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Personal debt is inevitable and almost everyone find themselves in it. More often, people find themselves tied in several debts that are either long term, short term or overdue. The debt could have found its way through one’s urge to start, finance a project, or pay expenditures such as school fees or recurrent bills. . Good debt management will see you handle them with ease and ensure that you borrow loans and repay promptly without any difficulty. Here are the tips.
Put down the purpose before borrowing a loan. This way you will know how much to borrow and for what reason. Do not borrow loans if you do not require them so as to avoid bad debts because in the long run you will end spending the borrowed money without clear vision or strategy.
Record your expenses on a daily basis and plan where to cut down.
The golden rule of wealth creation is to track expenses and cut down the unnecessary expenditure.
Unnecessary expenditure will drain your finances and later lead you to debts that could have been avoided.
This require records of daily spending and reducing expenses on the things you do not need. When the that is done, finally you will see yourself managing your finances to avoid yourself from getting into bad debts.
“Thou shall not covet” do not borrow for the things you desire but don’t need.
Several people have found themselves borrowing loans to finance the things they desire. These items include payment for holidays, trips, cars, furniture. Just because some else got them, does to necessarily mean you should also have them. Do not borrow to pay for wants that you can do without them. Get a loan after identifying a feasible project you want to do.
The ‘savior’ mentality comes with several expectations from everyone, members of the public, friend’s relatives, and other people who rely on you to ‘save’ them financially. Save yourself and family first to avoid getting yourself into bad debts that will be a challenge during repayment.
Write the list of all your debts and prioritize payment.
You should be able to list all the pending loans and analyze which loan to repay before the other. This strategy enables you schedule and repay promptly to avoid reminders from the lending institutions. Failure to which you may be blacklisted and barred from accessing loans in any financial institutions. Repay the loans that have short repayment period and plan for them systematically.
Managing your debts should be a personal priority in investment and wealth creation. Good debts enable you to progress and see yourself sail easily through the financial tides to achieve your investment, wealth and financial goals. It also ensures that your family and the next generation is secure financially to avoid financial instability.
Excerpts of Imarisha Sacco members education days.