Have you already experienced being overwhelmed by the burden of having debt? If yes, then probably, you have already felt that choking, suffocating feeling that many people experience.
According to the founder of Your Best Mindset, Jim Brown, “Debt is a pervasively significant stressor with household debt in the U.S. recently reaching record levels surpassing $14 trillion.”
When the COVID 19 pandemic surge came, many good businesses failed; many companies closed and many people became in debt.
Try to imagine this: You have a comfortable 25-year career at a corporation. And then one day, your boss walks up to you and tells you all of a sudden…
“Today is your last day.”
How terrible might that be?
Imagine if you lost your job. You lost your source of income.
How are you going to support your family? How are you going to pay your bills? Considering all the obligations at hand!
This is the exact thing that happened to this lovely couple, Benj and Fely.
Fely is an industrial engineer, while Benj is a mechanical engineer. They both held high managerial roles and had over 25 years of experience working in the semiconductor sector.
They were making excellent money. However, they also made excellent financial decisions.
They accrued debt as a result. Can you estimate the amount?
… staggering debts of seven figures! Not to mention loans of all kinds.
You name it, they had anything!
What possibly could have gone wrong? This is it: Spending money that they haven’t even begun to earn.
And that put them in the cycle of the rat race.
Hard work Pay your bills. Spend. Lend money. Hard work (Are you familiar with this?)
Benj’s and Fely’s story is a testimony that money can work either for us or against us.
Debt is money working against us.
They didn’t realize they were already entangled in debt until much later.
This continued for more than ten years. There were a lot of nights without sleep!
Could you picture how distressing and difficult that was for them?
Fely remembered being on her knees one particular night. She prayed fervently to God to deliver them from their hardship.
They eventually lost their six-figures salary. All while having two of their children studying in La Salle. Ouch!
Fast forward to today… Benj and Fely are now financially free!
They travel around the Philippines and the world to teach as many Filipinos how to save and invest correctly, and how to get out of bad debts.
Now, you might be wondering… What happened? What did they do differently?
Here’s the thing…
They had to humble themselves and that has led them to seek out for mentors. Then it all happened…
What seemed to be a tragedy, came out to be their greatest blessing!
Risk is really always part of our life. You can’t easily plan for recession, pandemics, natural disasters or other negative events, because if you take a too-cautious approach then you’ll never succeed.
If you find yourself unexpectedly further in debt than you’d like, don’t panic. There are options available but they require action. If you sit back passively and wait for the worst to happen, it just might.
So, take action! Manage what you owe before it becomes unmanageable.
Indeed, it’s not an easy task to go against all the financial challenges around you such as eliminating your debt, spending less than what you earn, overcoming the emotional inner self that discourages you to be frugal, and saving money by putting them in financial instruments that help your wealth to grow.
Agreeing or not, it is the only way to break free and manage well your debt—the true path to financial freedom. It’s up to you, it’s your choice!
Here are some useful tips to help you take control of your debts.
- Understanding your debt
Make a list of all of your bills, noting the creditor, total amount owed, amount paid each month, annual percentage rate (APR), and due date. Your credit report can be used to verify the debts on your list. You will be able to see the wider picture and maintain awareness of your entire financial situation if you have all of your bills in front of you. Software for debt reduction can facilitate this process.
Don’t just make a list and set it aside. Check your debt list occasionally, especially when you make payments. Every few months, update your list as your debt balance changes.
- Pay your bills on time.
Since you must pay a late charge for each missed payment, late payments make it more difficult to pay off your debt. Your interest rate and finance costs will increase if you make two consecutive missed payments.
Set an alert to notify you several days before your payment is due if you use a calendaring app on your computer or smartphone to enter your payments. If you miss a payment, send your payment as soon as possible; otherwise, a credit bureau can report it beyond the next due date. Send your money instead as soon as you realize it was forgotten.
- Select the Debts You Want to Pay Off First.
Credit cards have higher interest rates than other types of debt, so paying them off first is frequently the smartest course of action. Of all your credit cards, the one with the highest interest rate normally receives precedence on repayment because it is the most expensive.
- Build an Emergency Fund to Fall Back On
You would have to incur debt if you didn’t have access to money to pay for an unexpected bill. Even a modest emergency reserve can be used to pay for sporadic little costs.
It’s simple to persuade yourself that you “need” to buy a new television or take a trip. There aren’t really that many necessities in life, it’s true. You require necessities like clothing, food, housing, and transportation. For instance, you desire steak, a good house in the suburbs, designer clothing, and a luxury vehicle.
- Recognize the Signs That You Need Help
You might need to look for outside assistance, such as from a credit counseling service, if you struggle to pay your debt and other payments each month. Other debt reduction possibilities include:
These each have advantages and disadvantages, so weigh your options carefully.
What is Debt Consolidation?
Debt consolidation is the process of combining your loans into a single product with a lower interest rate. Personal loans and credit cards with 0% interest balance transfers are common debt consolidation strategies.
What is Debt Settlement?
Debt settlement is when you negotiate with a creditor to settle your debt for less than you owe. Only past-due debts are normally settled by creditors. Your credit score will suffer if you cease making payments to pay off debt because of the overdue payments. Although you can engage debt settlement firms, their services are not free. You have two options: you can settle your debt on your own, or you can think about credit counseling.
Final Note: Prevention is the Better Cure.
Do not wait until a financial catastrophe affect your life. If you’re in debt, work with us to get your liabilities back under control if you feel that your debt has grown too much or is causing you concern. Our team of strategic business advisers can assist you in creating a tailored debt management strategy that is in line with your long-term objectives and takes your current circumstances seriously. Set up a time to chat with us, and you’ll be pleasantly pleased at how we can assist you.