Live a Debt Free Life

LIVE A DEBT FREE LIFE

According to 7^th Edition of the   Oxford Advanced Learners dictionary, debt is a sum of money that somebody owes or a situation of owing money especially when you cannot pay. Therefore, a person, a country or an organization that owes money is a ‘debtor’ while a person, a country or an organization that is owed is a ‘creditor’; that’s it.

DECISION

Making the decision to become debt free can be
difficult, and it demands serious scrutiny as well as tough discipline to carry it through. However, living a debt free life is not impossible; yea.

Overtime, indebtedness simply meant that the debtor is subject to the whims and caprices of the creditor. The first step toward success is taken when you refuse to be a captive of the environment in which you find yourself daily.

Of course, there will always be a risk factor involved in any decision we make especially as regards debt free living. The fact is that you will never know just what you can do until you face a situation where you will have to do it. As James J. Corbett puts it- ‘you become a champion by fighting one more round, when things are tough, you fight one more round’.

STEPS TO TAKE

·        Immediately stop incurring more debt. To some people who are already ensnared in debt, this may sound impossible, but you can do it by determining to remain  resolute not to incur more debt, not forgetting that good timber does not grow with ease;  the stronger the wind, the stronger the trees.

·        Make use of every little investment opportunity. This is where information comes in. As societies develop, we are presented with numerous opportunities to invest. Such opportunities could be in hospitality, hotels, restaurants, supermarkets,  foods and drinks, clothing, stocks, Assets, insurance, media telecommunications or entertainment, etc. Before  investing, have good knowledge of the benefits, the risks, safety and the market for such opportunity.

·        Always work with Budgets. The Budget is a detailed financial statement that shows details of anticipated revenue and proposed expenditure. A budget is making your money work for you instead of you working for your money. To  do this, write out all you need to spend money on considering these:

-Commit yourself to staying within the spending guidelines that you establish

-Always spend on what you need rather than on what you want.

-Avoid impulse buying- most often, women are guilty of this.

-Respond to change i.e, buy more when income increases and buy less when it decreases.

-Do not purchase based on pressure.

-Do intense research before major purchases.

·        Don’t forget savings. Savings refers to the portion of income that is not spent. The importance of savings is enormous. We cannot predict the future need(s), therefore, it is important to save for the rainy days. One can also patiently save to make big purchases or payments rather than go borrowing.

·        See debt as an Ogre. As in stories, an ogre is a cruel and frightening giant who eats people. Here, the best form of defense is to run for your life. Just imagine that the more you incur debts, the more you run towards the Ogre. The danger of debt is that when you make any good amount of income, rather than enjoying it, you will always squander it on debt paying.

 

·        Start tackling your outstanding bills technically. Starting with the smallest one, begin to pay it off by adding an extra amount to the minimum payment. Pay only the minimum amount required on the other bills until you get this one paid off. Why? This will help you quickly experience a measure of success. You might need to negotiate some easier terms with your creditors in the mean time. You must pay your bills but your creditors will be more patient with you if you communicate with them about your plans.