2015 Resolution: Get out of debt (part 2)
As what I have said in my last week’s column, I firmly believed that for 2015, one of the best decisions you can make for your self is to live stress free. In short, decide to be debt free. Being out of debt trouble or being debt free is a matter of decision but this decision requires a lot of sacrifices and self-discipline for one to reach this goal.
Below are some proven practical steps or simple things to do on how to manage your personal debt problems. By taking these simple steps on how to manage your debts properly and having a firm resolve of actually doing it, is the vital key in achieving your ultimate goal of being debt-free.
First, have a family meeting. Sit down with the family members and discuss with them your current status or predicament. In this way, everybody, including the kids and other family members, such as siblings or in-laws get on board. Needless to say, it is very discouraging and even frustrating if one person is resolved to pay down debt while everybody else constantly clamors to do otherwise such as dining out, buying new stuff (shoes, cellphone), watch the latest movies or buy toys.
Second, start paying cash on every transaction such as buying grocery, paying utilities, tuition and the like. Stop using credit card when purchasing and most importantly do not use the cash-advance feature of your credit card. If you compute it, the monthly interest rate is always higher, and you wound up paying a lot more interest and will be taking longer to repay your debt if you will use cash advance feature of your credit card. It is important that you and your family understands that a credit card is not a “piggy bank” or a “cash cow”. It's absolutely not! Any charges that you make is considered a loan, wherever you look at it, it is as if you are borrowing money and you will definitely be paying it back with interest.
Third, if you cannot handle the problem by yourself, reach out to a friend whom you know who has a stronger will power or who is responsible in money matters. He or she can act as your “Credit Counselor” and can be able to counsel you on money matters. It is better if the person you will be asking guidance from is already matured and has a track record of accountability. He or she can be asked to strictly guide you to follow your repayment plan. For many debtors, this is one of the more effective ways of overcoming their “bad habit” of overspending outside of budget. In the past, I have seen successful stories of reaching out to their parish priest or a pastor or even to a former judge. Likewise, they may be also capable of calling your creditor if you are already over your head, meaning there is already no way for you to make even the minimum payments to your creditors after reducing expenses. They can call your creditors to work out long-term repayment plans with them.
Lastly, always remember that everything begins from small things. Start with paying your bills on time. If possible, get into the habit of making payments as soon as the bill comes in or better yet before. Don't wait for the due date.
Overall, being debt free is not necessary having lots of money but by having good credit discipline.
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