How to Get out of debts?

In the current economy there is an increase in borrowing for survival. With the current inflation rates mobile loans, bank loans, borrowing from a friend has become the order of the day to meet needs for our day to day lives. People are borrowing for mortgages, daily food, transport, paying rents and other small expenses here and there.

Someone once said “it’s not how much you earn it’s what you do with what you earn that matters”. So what do you do with the money that it’s never enough. Here are a few tips to get out of debts and start living a conscious free and meaningful life: 1) Know your income and expenditure – most of the time you know how much you earn but you have to be intentional with wanting to know where that money you earn goes to. So have a budget. Have an idea of what percent of your income is used for your expenditure and if you notice more than 30% is used in expenditure you need to slow down in your spending and do away with luxuries for a while so that the other 30% will be used in your financial freedom of being debt free and the remaining 30% be used for saving for the future or having an emergency fund.

2) Know your debt. Jot down all your debts from the once which need urgent repayment plan to the long-term repayment plan. Dedicate 30% of your income to debt repayment starting from the most urgent once to the least. 3) Negotiate with your debtors about repayment if they can allow you to pay less and also the repayment period and interest accrued on the debts. You will be shocked to realize that some of them will accept less payment.

4) Live below you means. I won’t tell you to live within your means since it is evident you are by having the debts. Cut down on unnecessary expenditure and luxuries until you are able to get rid of all the debts. This may be difficult if you’ve been the one funding meet-outs and other social gatherings you may feel lonely sometimes as you will fail to go out more in fancy places if you were used to, but look at the end goal,financial freedom.

Lastly Set out timelines to pay all your debts. Since you have an idea of all you incomes and expenditure and you also have a list of all the debts. Have a deadline to pay all your debt. You can say like in 2yrs time I want to have repaid all my debts and with that always go back to the drawing board and monitor the progress.

Be intentional in paying your debts.