I really enjoyed the break, especially after an eventful year. I hope you had a nice one, and that you are ready to dive into 2013, making your dream come true.
Money, money, money! This is the main talk after the holidays. Some call it the ‘January disease.’
In the first part of Stop Debt Right There! we focused on increasing savings by reducing expenses and creating extra income. I advise you to re-read that article. This time we will look at support systems and controls for getting out of debt.
Engage All your Stakeholders
Engage and persuade all your resident family members in order to synchronise financial behaviours, and gain support and ideas. Every family member must be actively involved and contribute in fighting debt. If your spouse disagree with you, you may end up fighting each other instead of fighting your common enemy; debt!
When dealing with creditors, one needs to be honest. Contact your creditors and make arrangements to pay back what you owe. Humility also pays! Armed with your budget and the list of all your creditors, visit each creditor and all people you owe money. This is what you do, negotiate to 1) write of the credit, or 2) reduce the amount owing or 3) defer payment for a period. Justify your argument using your budget and the list of creditors. Most of them will understand, especially if you are open and submissive. Admit your failures and promise to get the situation under control! Show that you are willing to pay. Otherwise they will continue to hammer you. Some of your creditors might be will to allow you to work for them on weekends or after hours to cover the debts. Take these offered arrangements.
Lying will not help. Be truthful. If you call someone to say that you do not have the money, they will not bother you. But if you promise them, they will come after you again and again. It is better to be humble and ask to be forgiven, than betray trust.
Social and Spiritual Support is Critical
As I mentioned earlier that ‘these are not normal times,’ you may have to take extra ordinary measures.
Form or join a support or prayer group that focus on finances and getting out of debt. Together share ideas, support and pray for each other. Consider engaging a financial coach or counsellor to whom you can be accountable to and help you step by step.
Have family meetings occasionally to report back progress, to support and pray for each other. The family members who are working hard to fight with you need to be recognised and appreciated. Do not allow debt to make you drift apart, but rather use it to become a strong family. Transparency and openness is important. By the way, stop blaming each other! It won’t get you out of debt.
Strictly Control Your Expenses
Most people get into financial trouble due to ‘peer pressure’ and trying to ‘keep up with the Johns.’ Some get into over expenditure due to pride and greediness, which drives them to live a life they cannot afford. This is how debt is birthed, fed and eventually grows out of control.
Actually, if possible, avoid loan purchases on consumer goods like food, clothes etc. As for food, three hours after consumption there will no evidence it ever existed, but the credit will remain. Many times I have seen people get into credit, and end up breaking good relationships just for a chicken! A chicken they ate six months ago!
In Case of Business Loans
Many people use personal possessions as security for business loans. Because the loan has collateral the bank will be willing to lend you.
But remember this, ‘financial institutions put their interest first before yours.’ Hence they will fund your ‘pipe dream’ business project as long as they know they will get back their money with interest, even if it means ruining your life. This is the reality of life.
Financial institutions are NOT YOUR FRIENDS, it is a business with the aim of making a profit; from you.
Therefore make sure you scrutinise your business proposal. It is better financially to stop before you start, then to be stopped by business failure.
Before taking a business loan, consult expert business advice and take their recommendations. Start small and grow big. As you grow, you learn and develop.
If you have never handled a deal more than$100, how will you be able to handle a $10 000 deal of borrow money? If you cannot handle your domestic budget, how can you handle a business budget?
If you cannot handle you own money, how do you expect to handle other people’s money. Instead, it will ruin your financial reputation for ever. Bite what you can chew! Take one step at a time. Do not be greedy. Be patient and take time to grow, learn and develop.
Stay Positive All the Time
Stay positive about your future. Many people who were once in debt end up amassing above average wealth, because the principles of getting out of debt and the same principle of accumulating wealth. ‘The road out of the valley is the same road to the mountain top!!’
If you can make it out of debt, it means you can make it into wealth.
Because of your situation, expect friends and relatives to be unwilling to offer financial help. Maybe it is for your good. They are afraid that you may not pay back, and this will put your relationships at risk.
Do not jeopardise friendship but focus on removing the reason why they are avoiding you. Remember what is actually standing between you and your friend is debt. Focus on eliminating it.
As you ask for financial help expect people to give you mostly advice, and not money! They will do this again and again. Get used to it and keep a positive attitude.
And remember, stop borrowing! 2013 is not a year to get buried by financial burdens, it is a year to rise above all financial situations!
Make this one of your 2013 commitments.
Have a great start to the new year!
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© Copyright 2013 by It’s My Footprint.