Are you struggling with Debt? Do you feel like your head is under water and there is no breathing space? Do you find yourself in a never ending debt cycle because the habit of using one loan to pay the next? Debt can be good but used in the wrong way, very detrimental. A lot of us have found ourselves with several debts on our hands (usually for things we cannot account for or remember) to a point where majority of our income is being used to service the debt. This is a very lonely place, because at the same time we are still trying to save face and maintain our lifestyle as well as the lifestyle of those that are around us e.g. family. We also don’t want to “look” like we are facing a difficult time.
I would go so far as to describe this kind of debt as an addiction, similar to the one a cocaine addict will have. The initial availability of that lump sum of money gives us a momentary high. In this high we buy what we like and convince ourselves that something miraculous will happen so we can pay it back. The low then comes – the realization that there is no miracle that has come your way, excitement of what you bought has worn off and you are then left with the ugly consequences of paying back the loan. For many of us, to again forget our troubles we take another loan with the same thinking and one day we are in a deep hole.
Make a decision to take responsibility and actions reflecting that decision. No, life cannot continue as is and there is not a magic solution out there that will mean you just keep doing what you do and the problem goes away. The answer is also not another loan. Today list your debt – the outstanding amounts and monthly payment. Most people are actually not aware how much they own and that is another reason they feel so out of control. If you are having a problem making payments for any of your loans CALL your bank/creditors discuss the situation with them. They may be able to restructure your loan and give you some leeway. They also may not but at least you will know you did something as opposed to ignoring their phone calls. You thus far have broken the agreement with them so make the first move. Secondly stop trying to save face – CUT COSTS. You may even have to make radical changes (e.g. moving house etc) and it could be uncomfortable and you need to ignore what others think because they are not paying the debt for you. Use these funds to make extra repayments into your loans. Find ways of making extra income. It may not look flashy but an extra Kes 3,000 a month can go a long way in accelerating debt repayments. It may be time to sell some of the “things” you acquired with this debt.
Remember, your situation, as bad as it may look or feel today is better than it will be tomorrow if you do not take responsibility and do something different!
Waceke Nduati
The author teaches personal financial management. Find her at www.centonomy.com or on twitter @centonomy.