Are You Drowning In Debt? Needing to know how to get back on dry land?
You are not alone….
17 years back I was living in New York. My husband and I were totally broke. We were negative US$17,000 in credit card debt. We used to live pay check to pay check and we were trying to make ends meet. Literally, we were drowning in debt….
Life was very tough for us especially when you want to budget your day to day living expenses.
Can you imagine waiting for your monthly pay check month after month and before knowing it….. everything was already gone paying your monthly utility bills, telephone bills, house rental, car mortgage and credit card bills?
This was really a nightmare for us….
A ”Must” Formula To Avoid Drowning In Debt
Older people are struggling to pay off debts on credit cards and mortgages when reaches their retirement age. Do not worry, it will never too late!
Those people who are struggling to repay debts were more than twice as likely to experience the breakdown of a marriage as those who did not? They also found higher percentage of depression among those struggling to stay afloat with their growing debts.
A few sacrifices can go a long way by just living within your means. I’ve been there and If I can do it, I know you can do it too. Do not spend more than you make. This is the first rule that you need to apply immediately.
Think about the compounding interest that will pull you down. As we all know, interest charged to outstanding balances of your credit card debt. Sometimes you are not prepared for the way interest is charged on your credit card.
So cut back on your expenses like eating outside, shopping, lower down your usage of air-conditioning etc… and try to pay more than the minimum every month. Do this consistently and you will win your race. Trust me on this. I worked hard on my debt and in less than two years and finally got my life back.
Remember, compounding interest is great when you are investing, but not when you are trying to pay off your debt.
Break Your Drowning In Debt Cycle To Smart Spending
Have a fire burning desire to pay out all your debt. Set a specific time to reach this goal. This is your unstoppable desire that you want to attain at least in 2-3 years time. Making radical choices in life is also something that you can train yourself to do. The more you frequently exposing yourself doing it, the more you will become stronger in making the right choices in your life.
Do the opposite as what the majority are doing in spending their money to avoiddrowning in debt. You will not become rich by living on borrowed money like your credit cards debts, loan or mortgage.
It does not matter how little or how much money you have now, but what matter most is how you spend it.
1. Prioritize Paying Your Debt
The debts you should pay first are called priority debts like mortgage, rent and any loans secured against your home. Because if you don’t pay them, you could end up losing your home. Then pay your credit card, store card debts or personal loans. Target the debt with the highest interest rate and pay more than the minimum payments every month.
2. Generate Another Source Of Income From Home
If you do not have a huge amount of money to invest to start up a business, there are several ways that you can make money online. Start spending your money in building up your business or to any income producing activities that will help you generate additional income aside from your current job. This will also help you to pay out your debt faster, but be cautious and be smart to make the right choice.
3. Living A Lifestyle Within Your Means
If your lifestyle is more than your monthly worth, this is the major reason why you are drowning in debt. Spending wisely is not being stingy but being smart.
Your lifestyle is the very last thing to consider if you want to be part of those successful entrepreneurs online and offline. All of us suffer from the urge to spend on things that are really not necessary – peer lifestyle pressure, saving face that affects our smart decisions and emotions.
If you want to be successful in life and in business you need to adapt the right mind set of saving for tomorrow. Sacrifice your lifestyle to live the life that you deserve in the next 5 to 10 years from now.
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To your One Step Up!
Jeng Cua (I love working from home)
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