Being in debt and getting out of it

Being a single parent is not an easy task. One needs to find ways and means not only to be able to make both ends meet but also to scrape out of debt incurred from a previous relationship. Once you spend more than what you have, especially at times when you are faced with a situation that brings an urgent need, you cannot help but end up borrowing money if you do not have a lot saved for those rainy days. There’s also the matter of mismanaging our finances causing us to spend more. Why do people really go into debt? Here are 3 reasons that got me (or maybe even you) into debt:

1. Life necessities

A roof over our head and education to get ahead of life are some of life’s necessities. We look for ways to finance our house and our study. Mortgage and Student Loans help us get the money we need upfront as we make our payment over time until we get to pay it back (and its interest) in full 

2. Life circumstances.

Urgent emergency situations like hospitalization, divorce, or unemployment dwindle one’s finances. We do what we have to do to get out of these unexpected instances even at times resorting to personal loans.

3. Mismanaging personal finances. 

Personal financial management is not something that we were taught in school but is something that we have to deal with and work on for the rest of our lives. What do we do once we have money in our hands? Do we follow our budget or are we likely to be swayed by mall sales or that appealing meal we saw in our Instagram feed? “Keeping up with the Joneses” without the consciousness of our wallets’ limitations might find ourselves in the pit of debt sooner or later.

Being in debt may be a very sorry situation to be in but this is not without hope. With hard work, discipline and careful planning, it is not impossible to be able to go debt-free. How? 

1. Acknowledge and admit. 

Acknowledge your situation and admit the mistakes you made. Note these mistakes so you can see the pattern before you even do them and avoid them moving forward. 

2. Be realistic, make a list. 

I know it won’t be easy to keep a tab of everything that you spend your money with. Writing it on paper will help you understand your financial situations and face it head-on.

3. Create a plan. 

Come up with a plan to generate cash flow for your necessities and debt payments. What can be cut down from our expenses? How would we allocate and prioritize payments? To whom and how can we negotiate payment terms and interest? Set the goal and work on it.

 4. Find a job 

If you ever find yourself unemployed, there are a lot of possibilities to be hired nowadays especially online. If you are currently employed, assess your skills and seek that promotion or pay raise. Be on the lookout too for a possible side job too- one that you could specifically allocate just for debt payments. 

5. Sell stuff. 

Let’s try the Marie Kondo way. Simplify and organize our home by getting rid of physical items that do not spark joy in our life. Sort them out either for keeping, for charity or for selling - where we can get extra cash that we can use to pay up. 

6. Ask for professional help. 

Sometimes debt goes way out of hand that we need some serious help consolidating everything in one place. Debt consolidation loans can help to combine all our debts into a single monthly payment.

Nelson Mandela used to say, “It always seems impossible, until it’s done” but living a debt-free life is feasible if we make that decision today and act one step at a time every day.