Dealing with Debt November 9, 2008
Posted by mona in : Uncategorized , 6commentsA long time ago, a good friend once told me that debt isn’t altogether bad. Rich people use the power to borrow in order to get ahead and to expand their businesses. But for the lesser mortals, getting stuck in a mountainpile of payables is not too uncommon. This, however, can be dealt with wisely if only one is willing to sacrifice or to put in an extra bit more effort to seriously payoff the debt.
1) Borrow from friends and family to pay off a debt (or at least part of it)
In the Philippine setting, this is more common than sand on the beach. Family and friends understand your situation better than any other institution. It doesn’t entail paperwork nor credit investigation. This, however, is more often than not a gravely abused solution to a problem because there are a lot (believe me, a LOT!) of people who do this and then suddenly act as if they’ve been struck with some sort of severe amnesia.
2) Examine (and re-examine and re-examine) and cut down on your expenses.
All too often debts remain unpaid all because people don’t want to sacrifice anything. They simply don’t want to face the truth that there are still some things left in their lives that they can still give up and live without.
Cable TV is one of them. I have yet to hear of a kid dying of boredom all because he can’t watch Cartoon Network or Nickelodeon. If you sum up the hours that you actually spend watching TV, maybe you’ll find out that you’re just actually paying more for your househelp to watch Cinema One all day while you’re out working yourself to the bone in the office.
Do you really need all that plastic in your wallet? I know it’s just not me receiving all these calls from credit card agents offering one more credit card. Think of how much you are spending for annual fees. Think of paying for annual fees for cards you don’t even use at all. Cut them off before they start charging you after the one-year waived fee is over.
There are a lot of ways to cut down your expenses. Times like these call for sticking to the basics. You simply have to think of essentials…nothing more till all debt has been paid off.
3) Speaking of credit cards, try to pay more attention to the interest rates. Going for a balance transfer with much lower interest rates could be the key to paying off that debt before it starts to balloon with interest, finance charges and late payment charges.
4) Hard as it is, you have to pay more than the minimum amount due. Paying the minimum will never make your load any lighter. It would only mean going by the rules set forth by the credit card company. Pay them the minimum and you would only make the loan stay a little longer making them earn more money as you suffer.
5) Lastly, this may not be totally in every book but sometimes it does pay if you contact your creditors AT ONCE at the first sign of you having problems in paying your debt. Showing the goodwill to find ways to settle the problem sometimes work far better than you hiding everytime the collectors come knocking on your door. The more you hide, the more inconsiderate these people will become all because you are giving them such a hard time. Remember, you are the one in debt. You owe them. And they are not and will never be in the position to understand your financial situation, however bad it may be.
