Module 4: The Position of Debt

First of all, let’s understand what debt is. According to Investopedia, “Debt is an amount of money borrowed by one party from another”. The repayment of this debt usually comes with interest.

Debt, they say can be either good or bad, depending on the purpose it is used for. Why then do people go into debt. Some of these reasons include:

• To take hold of immediate opportunities
• For instant gratification rather than delayed gratification
• Mismanagement of finances.
• Impulsive overspending
• Emergencies reasons

Some of these reasons are justified as good, while some are classified bad. Whether the reasons are either good or bad, debts all come with the same consequences.

Now, debts can be very alluring. Something keeps prompting you to spend more even when you don’t have the money at the moment. It gets worse that people even buy things on credit and find it difficult to pay. For others, they go into debts with the hope of getting a steady flow of income, but unfortunately, such flow becomes cut off, for example, the person loses his/her job or a business doesn’t do well. This brings the inability or difficulty to repay and the results of this are anger, shame, depression, suicidal attempts etc. Most debts also come with the repayment of interests (which in some cases can be high).

No matter the purpose to which debts can be used for, one thing I want you to know and believe today is that you can live without debts. Even your business can be without debts. From time to time, the list of companies with zero debts are being compiled. It is very possible to be without debts. If at all you get into a situation where you need to go into debts, make sure that the plans of repayment are well spelt out. Likewise, reduce the chances of scenarios like this.

However, if you have found yourself in debts. The best thing to do is to accept it and start working towards repayment. Avoiding or ignoring it isn’t wise. Instead, take actions.

Start by restructuring your finances. You’ll realize that, pending the time you’re repaying the debts, you can do without some expenses. This will allow you set aside an amount for repayment periodically. The proportion of this amount may seem small when compared to the full debt amount. However, don’t let that bother you. Remain consistent and before you know it, you’re done paying. Another additional option is to engage in a business that will enable you get funds faster to pay your debt. You can carry on the business just for the period of repaying the debts. Don’t become too comfortable in your debts. Likewise, don’t borrow to repay your debts. You keep pushing yourself into massive debts.

For enormous expenses, start planning for it ahead of time. This helps you pay it off without going into debts.

Finally, learn the art of contentment. Avoid living your life to impress or going with flow when you can’t afford it. In as much as it is good to enjoy life, do that within the capacity of your income.

We believe in you!

To your financial independence and freedom