There are far too many people who go to the extents of borrowing money from friends, family and financial establishments only to buy stuff that add little to no value to their lives. One of the dumbest things you can do is to borrow money to spend on luxury.
Sometimes however, it becomes inevitable to borrow and the only time you might want to borrow is to invest the borrowed money in a profitable venture. Even with that you must have done in-depth research to determine your expected income flow, the time to repay, and your ability to pay back.
Below, i have suggested 5 steps that you can implement to kick debt out of your life for good.
Accept your current state.
Some people have made borrowing so part of their lives that they never even realize they are constantly either borrowing or paying. They work to pay back loans and live on borrowed money. First acknowledge that you have are in a serious financial crisis, and make up your mind to discipline yourself out of it. Till you do that, you will forever be in debt.
Stop borrowing immediately
You can’t admit that you’re in debt but still continue borrowing. What then is the essence of your realization? Just stop borrowing immediately and you have very well taken another great move out being in debt.
Create a financial plan
Make yourself a financial plan that guides your spending. Do well to cut out on all expenses that are not necessary, and allocate a purpose to every cent that comes your way. Check out how to create a good budget here: How to Create a Successful Budget in 5 Steps
Set up an emergency debt fund account
So now you have made cutbacks on some of your expenses. What you should do next is to open an account and redirect all saving made from your cutbacks there. This account will be for the sole purpose of catering for your debt issue. By no means should you touch this account for any other purpose, If you really want to become debt free.
Keep track of how far you are going
You can always make adjustments to your plan to cater to changes in your income and expenditure. Especially take not of how much money you have saved so far in your emergency account so that you know how much and how long you have left to clear all your debts. You can organize this in an excel spreadsheet.
So far as you are in debt, you can’t make as well as save money. You will never gain absolute control of your finances so do yourself some good and stop spending lavishly and pay your debts.