Every person I meet, everywhere
I go has debt. Even I have loans and credit card bills. Personally, I don’t
like debt. I don’t want to owe anything to anyone. But I guess it is a part of
our society. But I learned that it is better to minimize my debt or totally
eliminate it so that I can gain ownership of my monthly income. It is my
choice.
Every peso (or Dirham, in case of UAE) that comes into your life is
going to build someone else’s wealth. It could be you or someone else (Merchant,
Media, Advertisement or Credit).
There are various reasons why people lend, but most probably I think
that we borrow because we want to keep up with our neighbor or family members
or perhaps chase happiness or satisfaction. It boils down to our attitude.
Credit is everything you buy that cost you more (price & interest).
You thought that you enhance your lifestyle but in fact it diminishes your
lifestyle. You are losing and the creditors are gaining.
You should own valuable assets not riding, wearing or residing your valuable
assets.
In order to know your financial status, you should create a simple Statement of Assets and Liabilities (SAL)
to know your Net Worth. Assets
are things that put money in your pocket and Liabilities are things
that take money out of your pocket. Total Assets minus total Liabilities equals
to your Net worth.
Your financial attitude determines your wealth potential. It is the way
you think. If you think you can or you can’t, then you are right.
There are some things that Sabotage your
finances.
Self-Gratification.
This is your inability to delay gratification. You want to get what you want
right at that moment and are not willing to wait.
Self-Image. You want to
impress others to get their approval because you have a low self-esteem. You
spend every peso you have to buy the latest gadgets, clothes, etc. so others
will notice you.
Attitude. You are
thinking short term and not long term. You spend every peso you have without
thinking about tomorrow.
Positive Vision.
You don’t have a clear and positive vision. You are being deceived that you
should be free in buying the things today because tomorrow, you don’t know what
the future awaits you.
Getting out of debt is a process. You should focus on your goals, focus
in important people in your life or loved ones, and include them in your plans
and decisions. In this way, you will never sacrifice the things money can’t buy
just to get the things money can buy.
As the saying goes, “A journey to
the thousand miles starts with the first step.”
These are some suggested steps to
eliminate debt:
1.
Don’t make a debt. Cut credit card if you have many, but spare 1 that
gives high credit limit; no annual fees and give rewards points.
2.
Find your accelerator margin. Look for ways that could minimize your spending.
There are things that we have that we don’t really need or if we need them,
they can be adjustable.
a.
Utilities.
Use energy efficient lights or look for good insulation techniques for your
house.
b.
Automobile.
If you really need a car, don’t buy a brand new car (for now). Better buy a 2
or 3 year old used good car. Find and use used cars on the websites.
c.
Maintenance Cost.
For any breakdown, fix the appliances sooner so that it will not make the
damage more costly.
d.
Groceries.
Use grocery coupons and buy store brands that are cheaper than branded
products. Avoid junk foods; this will save you a lot.
e.
Recreational Shopping. Don’t buy people expensive gifts. Cut back gift-giving list. Make homemade
gifts, such as cookies, cakes, pastries etc., downsize your gift-giving for a
while.
f.
Vacation.
You can go to places that are not expensive until you are debt-free. You could
go to parks, budget hotels, local trips, fun & educational places. Be
strong but not rigid and take occasional breaks.
g.
Subscriptions.
Cut back any monthly subscription plans such us cable channels, magazine,
movie/series in the internet that you can live without.
3.
Manage your spending.
a.
Determine your income.
How much money is going into your pocket every month?
b.
Determine your expenses. How much expenses that goes out of your pocket every month?
c.
Avoid frivolous spending. Don’t spend too much on anything. You have to determine if it is a want or a need before buying anything. There are plenty of online places that
you could check out to buy cheaper second hand appliances that are good as new.
You just have to be patient in looking at the advertisements and negotiating
the price. There are also a lot of online stores for goods and services
available at the click of the mouse. But you have to cautious on these and
always ask yourself if you need them or not.
Moreover, know how to avoid
the CIA (just borrowing the acronym). Battle the: Convenience. It is paying
small/little money in exchange for our convenience such as eating out, getting
a car wash etc. Small things add up, so we need to be careful on this thing, we
should not be lazy if we think we have time to do it.
Indulgence. You buy because of impulse, when you feel stressed and want to feel
better.
Appearance. You want to look like the rich and famous or would like to keep up with
your family members, neighbor, co-workers etc. so you are spending more than
you should.
To build your income, either you can reduce your
cost by managing your expenses or increase your income. So how
do you increase your income? Do you
know that you are earning what you and the marketplace have agreed you are
worth. So you exchange your value with the market place based on what you asked
and you think your worth.
There are five options to increase your
income:
a.
Increase your value to your
current employer. You have to improve yourself and start doing more.
You reap what you sow. Do what you can do for your superior to help him/her
achieve success. Focus on how you can make the business profitable. Know how to
do other jobs or multi-task. Take on special project. Concentrate on solving
problems. Your attitude will determine your altitude. It is better to have 10
average workers with great attitude than 1 great worker with a negative
attitude. Be a problem-solver.
b.
Find a better employer for your
skills and qualifications. What you can do for them. What value you can add to
their business. Differentiate yourself with others and use keywords. Note your
responsibilities and accomplishments. Be the exact person they are looking for.
During interview; smile, wear a business clothes, bring a resume, paper &
pen, flash drive and have a positive attitude and response.
c.
Find a location that pays higher.
Some locations pay higher than other locations/countries. Relocate on
areas/country that can offer you a higher salary.
d.
Choose a new more valuable career
path. Career that you will enjoy but highly valued by
employer. You can look online for any assessment tools to see your skills in
communication, training, people, leadership, financial, planning etc. So how
would you know that you really like the new career path? Do a part-time job or
volunteer or be an intern/temporary in the field you want to take. Seek a
mentor that has achieved some level of success; established in the industry
that will guide you in your career.
e.
Start a business of your own.
Be an entrepreneur and start your own business. You
should be a visionary and have to work on the things you enjoy doing. There are
many forms of business; sole propriety, corporation, LLC etc. You have to learn
the basic legalities, permits and licenses required and continue to educate
yourself before starting any business.
That’s it. I hope
that the above helped you one way or another. Let us be debt-free so we will be
worry-free.
I praise God that I have a minimal debt and I pray that I can totally
eliminate my debt with the help of the Almighty God. Yours too, let’s take this
as a challenge.
God bless us more J
“Let no debt remain outstanding, except the
continuing debt to love one another, for whoever loves others has fulfilled the
law.” – Romans 13:8
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