Trapped In The Debt Cage? See How To Permanently Get Out

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Jegz
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Location: Naija
 

September 8th, 2019, 6:13 pm

Trapped In The Debt Cage? See How To Permanently Get Out of Debt - An article written by @Jegz, founder, Bestnaija.ng

Debt. Debt is everywhere. These days, people are caught in a borrow-and-spend life cycle that results in ever-increasing debt loads. Bad credit scores result. Blacklisting and even more.
debt.jpg
Would you like to be debt-free? Focusing on personal finance, now I will discuss how easily these days people get trapped in the debt cage. And also I will feature majorly how to escape the debt cage cycle. First, let's look at what debt means.

In layman's terms: Debt is created when you borrow money you don't have in order to meet a need or want. Debt occurs when you buy on credit. When you use your credit card. When you take loans. Obviously when you owe.

These days, owing, debt or credit seems to be the order of the day. Countries, companies, groups and individuals wallow in so much debt -- debt irreparably huge enough to make one assume that it's another means of exchange that has come to stay.

To add to the problems, proliferating the internet are quick-loan companies who will give you loans within minutes without stress, guarantor or collateral. Access to debt is easier than access to good drinking water.

But no. We can all still live within our means without permanently owing. Except of course momentarily for a purpose. But not owe to the point of bankruptcy!

Debt is bad especially when you are trapped in its cage. If not managed well, you will continue to owe and create more debts. You will end up living the kind of lifestyle I term DIG-AND-FILL. Its called so because you will end up borrowing to pay up a debt. If you have reached that stage, its important for you to STOP OWING! And find a solution immediately else you are headed for bankruptcy.
Getting out of debt
Getting out of debt
HOW PEOPLE GET TRAPPED IN THE DEBT CAGE

1. Living above one's means
Lifestyle is number one culprit when it comes to personal debt. Everyone cannot afford just anything! That's a real truth. Not everyone can afford staying on Banana Island! Or Lekki! Not everyone can buy a Prado. Or Gucci bag! But because of peer pressure, showy display of one's means of livelihood, pride and some degree of senselessness, many people want to do what others are doing. They end up doing "follow-follow" and impose on themselves lifestyles far too expensive beyond their means.

2. Poor or no budgeting
Budgeting is no rocket science. It basically means planning your expenses with the size of your fund. It's basically about sharing properly your resources to your need areas so as to be sure the most important things are taken care of.
A lack of proper budgeting will result in resources being utilised in improper ways such that serious deficits are created. This will lead to wastage and serious debts in case of lack of funds.

3. Poor financial habits
Some people are impulse spenders. Some lack proper financial education and thus do not understand how money works. A bad spender will always wallow in debt! Impulse buying is a curse!

4. Bad addictions
Some addiction and even injurious habits lead to crumbled financial status.
Popular ones include GAMBLING and DRUGS. These two alone have sent many in journeys of irreparable financial doom. Gambling not only costs money but also valuable time! Addiction to drugs and other related substances has debilitating effects both on the health and on the purse.

5. Ignorance
Information is power. This is equally true when it comes to money and debt. If you do not know, you do not know! Many have made poor financial decisions simply because they lacked the proper knowledge or information that could help better decisions. Some loans have become bad because of bad interest rates. Some have become bankrupt because some business they borrowed to finance was not profitable. Ignorance is a disease when it comes to money.

6. Bad job, joblessness and/or bad economy
Some jobs are just not worth it. In bad economy where inflation is cruising so high, if your job or employer is not paying well enough, you are better off not working at all! Some will find that hard to believe.

I mean it. "No job" is better than a "bad job" where you are underpaid. Among other factors, my take on costs of doing that job reiterates that fact.

For going to work, there are costs attached: some measurable, some immeasurable. Transport, clothing, feeding and especially time and opportunity costs are some sacrifices you put in! I've see someone who until I made her realise it, didn't know that her salary couldn't pay her transportation costs alone to the office each month. Why won't she be in debt? It's important to know when you are making a loss for working. Let's leave that for another topic.

Joblessness will lead to more debt if solution is not found. Likewise, a bad economy will leave the citizens dealing with high cost of living and huge domestic and national debt.

The above are by no means the only root causes of personal debts. Meanwhile, let's take a look at good ways to break that cage!


HOW TO DO G.O.O.D (GET OUT OF DEBT)

Breaking the debt cage is not an easy task. Difficult though it is to get out of debt cage trap, there are some steps you can take to get out of the debt curse.

The following steps will help anyone to resolve his personal deb problems both in the short term and long term.

1. STOP!
If you feel you are getting into too much debt, the first step is to STOP! Simply stop borrowing or buying on credit. STOP! This step is very critical as it will help you minimize the ongoing damages and help you take stocks of 'what's left.' This will require you put away your credit card and use the debit card instead. This will require you stop patronizing those quick-loan apps on your phone. This will require you stop borrowing from friends, family and colleagues. This will require you stop buying on credit. Just stop!
Then move on by spending based on just what you can afford.

2. CHANGE!
Lifestyle changes are required for someone who is getting into too much debt. Most of the causes highlighted earlier can be corrected by simple lifestyle changes. If you agree you live a very expensive lifestyle that is way above your pay grade, then changes are needed! Living a simpler and less expensive lifestyle will help readjust your cash flow.

Are you living in a very expensive apartment? A relocation before next rent will do you good. Is your car too expensive to maintain? Trading it in for a less expensive one may be lifesaving. Or even getting rid of it completely for other means of transport may just give you back your peace of mind.

A simple, non-expensive lifestyle will surely be a source of great blessing as you will end up with excess funds to cater for your existing debts or needs or even savings eventually.

3. PLAN!
Financial planning or budgeting will put you in charge! Some are in big debt troubles because they spend mindlessly! They just spend money as it comes without any prioritizing or planning. Living on a budget will not only help you stay in charge of your financial life, it will also help you apportion your resources appropriately to the right and most important quotas. This will give your money great purpose.
If you don't know what you're going to do with your money before you get it, you'll waste it once you do receive it.
That's true. You must plan (or budget) how to spend your salary or income even before you get it. This will help you block all leakages and unnecessary spending and eventually prevent or curtail debt.

4. PAY!
Start paying of all your debts. This may be the most difficult part especially for those who have gone too deep.
The primary objective of this article is to learn how to practically break out of this debt cage. So it is important to pay attention here.

I recommend two major strategies here. Especially when you have adopted steps 1 to 3 above - stop borrowing more, simplify lifestyle and planning with budget- then you must consider reducing your debts to the minimum.

a) Pay off the costliest (of highest interest) debts or loans first. This is the best step to take. being able to get rid of the credit with highest interest will relieve you of interest loads eating deep into your purse. Credit cards usually come at high interest rates in developing countries. Try clearing or settling them first and putting the cards away. Do the same with other debts you have incurred and are servicing.

b) An alternative method is to clear the smaller loans first. While this does not really make a sound economic sense, it does have some positive psychological benefits. This is especially true when getting out of debt will take a long term. Being able to completely clear some small debts can motivate one to continue the achievement with other bigger debts.

5. REPENT!
Earlier, I highlighted some bad addictive habits that can throw people into the debt abyss. Gambling is one of them. Drugs and some other costly addictions are to be eradicated. Otherwise, your fight for freedom from the debt cage will be in vain! People lose billions to gambling daily. With the hope of winning, still the rule stands: THE HOUSE ALWAYS WINS. So, gambling will do no good but to kill your financial sanity. Drug addition comes at great financial and health costs. Then I recommend you repent from all these vices. Now!

6. EARN!
Cutting down on your excessively expensive lifestyles, stopping costly addictions, budgeting and paying up debts will bring forth positive change to your financial state. However, the effects may be limited especially if the cost of living keeps going up and income is not increasing in like direction. In this case, you may need to earn more!

Alternative sources of incomes abound, depending on your circumstances. If only you can increase you income, you not only may be able to pay up your debts, you may be able to get excess to save or invest or even live the flamboyant lifestyle you wanted. Seeking legitimate means of additional income is what I recommend as permitted by your circumstances So, seek to earn more. If you are not working, get a job or business going. Earn!

7. LEARN!
Information is power! Knowledge is key! Basically, everyone needs to understand the concept of money and how money works. A lack of this basic knowledge has led many into financial doom. On the advanced level, many have made money mistakes because they had very little understanding of credit and loans before dabbling into one. Bad interest rates can cage one forever. Unfavorable terms and conditions of a credit agreement have caused many to regret such decisions for life.

So, seek to learn the basics of economics, concepts of money and credit. This will enrich you and help you make better financial decisions. Decisions like if a credit is worth it or not. Do I buy now with my cash or spread the payment? This will help with performing standard cost-benefit analysis of any money-related step.

8. DETERMINE!
Of course if your are not determined to get out of debt, you'll easily creep back into the cage. Stay determined on your new course of financial life and you stand a chance of reaping both the short and long-term benefits.


In summary, while debt (or credit) may be useful at some points, wallowing in too much debts is synonymous to being caged in a self-imposed prison. The good news is: the key is in your hands.

Use it.

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"Many of us are not living our dreams simply because we are busy living our fears" - Les Brown
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NiceGuy
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September 9th, 2019, 12:02 am

:thnk:
I'm really not that nice... :mrgreen:
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Emi
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September 21st, 2019, 5:51 am

:good: nice
I'm sekxy and I know it... :w':
atuki

October 1st, 2019, 11:54 am

Beautiful article, sharing.................. :excited:
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makavelli25
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May 26th, 2020, 5:16 pm

Its all good

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MomohAliu52
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May 26th, 2020, 9:20 pm

True motivational discussions. In other to be debt free, i buy the ideal of earning extra income either offline or online to support you present job.
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green20
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May 26th, 2020, 11:26 pm

Favourak23 wrote:Nice post thanks
:clap:
"We must use time wisely and forever realize that the time is always ripe to do right."
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green20
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May 26th, 2020, 11:27 pm

makavelli25 wrote:Its all good

Wow nice post
yeah
"We must use time wisely and forever realize that the time is always ripe to do right."
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green20
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May 26th, 2020, 11:27 pm

MomohAliu52 wrote:True motivational discussions. In other to be debt free, i buy the ideal of earning extra income either offline or online to support you present job.
:thnk:
"We must use time wisely and forever realize that the time is always ripe to do right."
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green20
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May 28th, 2020, 6:00 pm

ISHAQ23 wrote:Good idea
yeah
"We must use time wisely and forever realize that the time is always ripe to do right."
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eMade
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October 16th, 2020, 5:28 am

MomohAliu52 wrote:True motivational discussions. In other to be debt free, i buy the ideal of earning extra income either offline or online to support you present job.
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Dube
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October 16th, 2020, 5:38 am

eMade wrote:
MomohAliu52 wrote:True motivational discussions. In other to be debt free, i buy the ideal of earning extra income either offline or online to support you present job.
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:tu: You are on point
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makavelli25
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December 21st, 2020, 7:10 pm

Nice article

That number four has thrown a lot if people into the debt cage
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manass
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December 22nd, 2020, 12:02 pm

NICE one
I start by giving my enemies food[tweet][/tweet]
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TitanKenneth
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January 24th, 2021, 11:13 am

eMade wrote:
MomohAliu52 wrote:True motivational discussions. In other to be debt free, i buy the ideal of earning extra income either offline or online to support you present job.
And interestingly, you can earn decent additional income online using the Bestnaija bcoins system. Read https://bestnaija.ng/61200
:tu:
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Debunie
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April 12th, 2021, 7:20 pm

My debt are paid on the cross
Am a human what are you.
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Sally
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January 23rd, 2022, 9:35 pm

Nice
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