Escape the Debt Trap Today!
You may have attempted to escape the debt trap and failed miserably or are finding the latter impossibly difficult. But, if you’ve accumulated useless debt, you need to realise that tackling the problem will take time.
As such, it’s important not to give up too soon. Your first step should be to determine the extent of the problem – the volume of useless debt you have. Only then will you have a realistic perspective of what sacrifices need to be made and what solution will aid you best in overcoming the problem.
If your debts aren’t related to a tangible asset, they are essentially useless and, as follows, you should focus your attention on subtracting these debts from your life. Naturally, your home loan and car finance are valuable debts. Useless debts include personal loans, credit cards, retail accounts and other forms of short-term unsecured credit.
Without savings for emergency expenses, it’s all too easy to end up with useless debt, whether responsible borrower or reckless spender.
As borrowers spend an ever greater percentage of their salaries on debt repayment, their net take-home pay shrinks in turn.
The only virtue of these debts is their brief term, making them repayable within three years at the most. The crisis comes in when losing out on over half of your salary leaves you with precious little to meet all of your other expenses.
As follows, you are compelled to recycle these debts just to survive and, in so doing, remain mired in the debt trap. You settle the credit card, but, come next month, you’re back in the red.
Accordingly, it feels as though breaking this pattern is one of the greatest challenges of your life. But, its dangerous to allow yourself to lose hope or accept indebtedness and debt stress as inevitable.
Debt creeps up on you over time and, by the same token, it can be chipped away at monthly until it entirely disappears. Of course, once your outstanding balance is zero, a firm commitment must be made to stay away from credit and avoid being caught in the debt trap again.
Face Debt Together
Accepting that sacrifices have to be made in order to enjoy a debt free life will win you half of the war.
Even better, with a partner, you can motivate and support one another along this worthwhile journey to financial freedom. The debt burden is a lot lighter when carried by two. Sharing the load will have the effect of strengthening your bond, instead of placing strain on your relationship – as debt typically does.
Also, it’s best to tackle debt now by choice, instead of later when you’re all out of options and backed into a corner. Similarly, giving up too early and becoming ensnared in the debt trap again is the biggest mistake you can make, as it will leave you with a demotivating sense of failure.
The best thing to do is to drop anchor the moment your debt free ship comes in. Do this is by putting a preventative strategy into action and tucking away three to six months’ worth of monthly salary payouts for a rainy day.
Building up an emergency fund will prevent you from relapsing, as you can fall back on these savings, if ever the wolf darkens your doorway again.