5 Lessons Learnt From Being In Debt

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Have you ever being in debt? Here are few things that are worth sharing to stop you from making the same mistakes.

1. Things Change

It’s not possible to pay off debt and carry on with your normal standard of living. Some wants will have to be cut in order to make space to eliminate debt. It may be sad to let go of some luxuries but it will be worth it in the long run. Remember, debt is temporary so don’t feel like the things you’re giving up are forever. The great thing about cutting back is that you learn to manage your money better and you can start to see the difference between necessary and unnecessary spending.

2. Don’t Avoid It

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Pretending you’re not in debt and not making any changes to improve your situation only makes it worse in the long run.

Debt collectors never give up, actually, the only time they give up is when you’re bankrupt and the money is not collected. This is called a ‘Bad Debt’.

If you’re lucky enough not to go bankrupt, debt collectors will keep sending you letters and calling you till you realise you can’t avoid them. Don’t avoid those that you owe money to, whether personal or professional. When you avoid professional debt collectors they may take you to court and they may also give you a CCJ. A CCJ (County Court Judgement) is a court order that may be registered against you if you don’t pay what you owe. Having a CCJ can make things a lot harder when you want to want to borrow in the future and it can stay on your credit report for up to 6 years.

The point of everything that has just explained is to reiterate that you shouldn’t avoid your debts.

3. Anyone Can Get Into a Debt

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It’s really easy to get into deb, especially when you’re young and there’s no real guide to how much it can affect you. When you first get an overdraft or a credit card, it can feel like free money, but it really isn’t. It doesn’t seem like a big deal at first because it may be the first and only time you owe money. However if you follow the same habits and keep spending borrowed money, you start using one debt to pay off another and that’s how people snowball into it. It’s really easy to get into, but it’s really hard to come out of.

4. Make More Than The Minimum Payment 

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The less you pay, the longer you’ll be paying it off. Don’t think of paying off money you owe as a burden, think of it as a means to an end. Pay off more than the minimum payment each month that way you get out of debt faster and there is less interest accrued on existing debt.

5. It’s Great Motivation To Never Get Into Debt Again

There are so many downsides to being in debt but there are few advantages to it too. If you are able to tackle your debt as early as possible you realise that it’s not worth the financial distress and you can make a decision to never go back. Debt can mature you and bring awareness to your spending habits. Your story or willingness to discuss certain financial errors may stop somebody else from making the same mistakes. Fail quickly, learn fast and get out of debt as soon as you can.

 

This post was written by Bola


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