As I always say to individuals, it is easy to get into debt, but very difficult to escape from debt prison.
Debt holds on to us tightly and turns us into wearied creatures, it held on to me. It also causes us to start borrowing from our bosses, relatives, friends, or anyone who will lend us, so that we can pay our bills and meet daily expenses. This situation has led some individuals to some unholy professions. In order therefore to escape debt prison, there are some steps that you have to take.
1. Take a Long Look at yourself
If you are going to escape from debt prison, you have to look at yourself. This may mean having a really long talk with yourself about your financial situation. That is where I started in my quest to be debt free. At the end of your honest, frank reflection of where you are financially and where you desire to be is where the next steps starts. Remember you may have to face the storm head on it therefore makes no sense denying that there is not a problem, you need to face it and fix it. The next step:
2. Make a list of All Your Creditors
I suggest you sit down and made a list of all who you owe. It may end up being a short list or it may be a long list but don’t worry about that. A well know Chinese proverb reminds us that: “A joinery of 1000 miles starts with one step.” You have come a long way, by accepting that there is a problem and you intend to do something about it. After adding up all the creditors, it will show the final total. You need to know where you are before you can charter a plan of escape. The list reveals that it cannot be business as usual and a budget has to be implemented.
3. A Budget
What is a budget? The Merriam-Webster Dictionary: defines it, an amount of money available for spending that is based on a plan for how it will be spent. A budget keeps your spending in order and on track. The budget looks at income and expenses, how much you are working for and how it will be spent. I term it, slim fast financial diet; I even lost weight physically, but it works. it is to assist you in getting rid of the excess weight of creditors from around your salary. There are some expenses that are monthly: example- utilities, basic groceries.
After you have done this, with the remainder you pay off the smallest creditor first. When you have finished paying off that creditor, take that money and apply it to the bigger creditor and keep following this pattern, it works, because I have used this approach. I am not fully out of debt, but working my way out.
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