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DEBT: Is there an Easy Way Out?

In the Philippines, you are not a Filipino if you do not have debts, right?

Based on a survey, Filipinos are said to be among the best in Asia in terms of their short-term savings and expenses tracking behaviors, but they are also the second most indebted in the region with more than 80% of the population having high levels of personal debts.

Overspending, too much luxury, unexpected medical expenses, vices, and improper use of credit cards are some of the reasons that drive people to incur debt. People nowadays are desperate to always have money, and sometimes, there is no other option than borrowing.

Like Filipinos, many face financial crisis at some point in their lives, and they find borrowing money as the only way to solve it. However, debt really hurts your financial health, even your mental and physical health, because debt can be a stressful experience.

Train yourself: Work out on your spending habit.

To get rid of debt, you need to make a plan, and you need to execute that plan. You can start by setting your monthly budget and sticking to it. Then, do a realistic evaluation of how much you take in and how much you spend.

For example, each month, simply list down all your expenses, asses whether those expenses are worthy or not, and look at how much you earn. Now, you’ll figure out you spend too much on things that do not have significance in your life.

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Michael J. Primus

Exercise cutting down your purchases until your income outweighs your expenses. Also, quit buying high-end gadgets. Just look for gadgets that fit your budget. This is to stop you from borrowing money as a means of funding your lifestyle. If you want to buy something for yourself or for your family, think of other ways to earn additional income.

Another thing, in the advent of technology, computers are now widely used as a tool that quickly helps you find solutions to problems. Some software applications for developing a budget, balancing income and expenses, creating plans to effectively manage your money, etc. are made readily available.

You can also consider reading financially related articles online, on the newspapers, at your library, or in bookstores that can guide you a lot in your financial decisions. It is also interesting to attend financial talks and seminars which provide a variety of information and literacy activities that can mold your life from a draft to a masterpiece.

Realizing all your financial goals and developing self-discipline when it comes to money matters are never easy, but are attainable.

Turn your Bad debts into Good debts.

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While debts can become a major stumbling block in your life, it is illogical to think that debt can also help you get an education, buy a car, own a home, or expand a business. Most stories focus on the negative consequences of having debts, but in reality, there are plenty of positive applications of debts.

There are two types of debts—debts that can potentially return your money are referred to as “Good debts” while those debts that do not return your investment are called “Bad debts.”

Let’s focus on Good debts. These debts can help you generate income. Borrow money and use it to expand or create a business, pay for educational expenses, or invest long-term.

A wide variety of investments are available such as stocks and bonds which best generate wealth. The goal is to make debts work for you, not against you. Imagine if you don’t know how to convert Bad debts to Good debts, you are making a hole where you might drop down. As what Sol Luckman said, “It takes money to make money.”

Make a solid decision to get rid of borrowing money.

Convince yourself that from now on, you will use your money wisely and will never take borrowing money as your number one option to finance your unending expenses. Make it a habit to save money before spending. Build distinctions between what you need and what you want.

Remember, no matter what type of debt you have—credit cards, personal loans, home loans, car loans, business loans, or something else—it is important to think that there is a way out. It may not be easy or unlikely to happen in just a blink of an eye, but a debt-free future will be yours if you always think that your goals are greater than your temptations.

In any financial situation you face, always take it positively and everything will be easy to manage.

Contributing Writer:

Joyce Orejola

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Joyce loves doing things randomly. She is a family-oriented and determined person who aspires to become better so she can inspire others. At the moment, Joyce celebrates the life of being single which gives here more time to enjoy and learn about life and friendship.