Elimination of debt is a dreams of many Filipinos buried in debt. Debt can be categorized in to two types, good debt and bad debt. So today let us discuss about the bad debt. Bad debt is commonly accumulated through excessive spending of wants. It is also called consumers Debt. Consumer debt is a big problem in Philippines that needs to be eliminated. people in Debt needs to pay it off before moving to investing. I believed that paying off your loans is already investing, since you can stop the compounded interest of your loan. I suggest not to invest if you are buried in debt. Commitment, Focus and Discipline shall be the attitude of a person who want to get out of debt.
So here are the 13 steps out of debt as suggested by Rowena Suarez, Registered Financial Planner, in her interview at ANC Money.
- Face the problem
- Commit to get out of debt
- Decide of the time frame.
- Make an inventory of your debt
- Record your expenses – Getting out of debt is like going on a diet, you need to be aware of everything you eat.
- Determine your needs and wants
- Let go of your wants
- Use your wants money to pay your debt
- Choose Debt with the highest interest rate then pay it off.
- Work out a payment scheme with your creditors
- Pay with Cash
- Find other source of income
- Learn from your experience and make it your life choice.
Above mentioned steps are really practical ways in order to eliminate debt. This might sound easy but in reality it is not. Again those in debt shall be Committed, Focus and Disciplined.