Talk Affluence

How to pay off bad debts and be financially secured

Image by Steve Buissinne
From Pixabay

Introduction

We all desire good life and good life is expensive if not(very expensive). In all race of the world, few people in the community can boost of having a standard living. The percentage is less than 10%. Yet one thing elude the remaining 90% and drag them into download sloop or curve

 That one thing is DEBT 

Debt is a common problem that many people face in their lives. It can be overwhelming and stressful, especially when it becomes unmanageable. Lots of people know that getting into some deals are not too good for them in the long run, but due to financial pressure they ultimately jump into the wagon of accruing debts.

Inasmuch as everyone depends on other for survival. They are those that feed fat from the others while their host become thin by day. This type of relationship can be ascribe to the type of debts call "bad debts"

Bad debt can have a significant impact on your financial security, making it difficult to achieve your financial goals. However, there are ways to pay off bad debt and become financially secure. In this article, we will discuss intensely ways and how to pay off bad debt and be financially secure. This are simple and practical steps which if you follow diligently, you will become more happy with your new financial life.

What is Bad Debt?

Bad debt is any debt that you cannot afford to pay back. It can be a result of overspending, unexpected expenses, or a change in financial circumstances. Bad debt can include credit card debt, personal loans, medical bills, and other types of debt that have interest rates and fees.

One thing about bad debts is it ability to make you over think and drag you into more bad debts. If you are not careful enough to control your gratification, you will find yourself drowning in more of this bad debts.

Many things can push one to getting loans and with high rates and hidden charges to pay. The flooding of fintech and loan apps in the Nigerian  fintech marketplace as also add to this uncontrollably gratifications.

From Fair Money, EasyMoni, EasyCash, Speedloan with the last having almost 45% lending interest rate. The ease at getting this loans or bad debts since most Nigerian youth collect it for fun and buying tech gadgets to be seen is complete lead, guidance and fast way to more indebtedness to bad debts.

Why is Bad Debt a Problem?

Image by Steve Buissinne
From Pixabay

Bad debt can have a significant impact on your financial security. It can lead to high-interest rates, late fees, and penalties, which can make it difficult to pay off the debt. Bad debt can also affect your credit score, making it difficult to obtain credit in the future. It can also lead to stress and anxiety, affecting your overall well-being.

Like in the above loan apps stated. Some of this fintech companies, will without your permission log into your mobile phone contact list, remove numbers and begin to call with a prerecorded audio messages that is embarrassing.

Something that is supposed to be a confidential information. They will even be sending treating SMS to the numbers on your mobile phone contact list. This is what bad debts can cause. It could also lead to dead. There was a man at Obio Offot in Uyo Akwa Ibom State that collected loan and add with his gratuity. He did not have adequate knowledge of the business he was about to invest. He lost both his gratuity and the loan money. When the banks started hunting him, his wife could not hold on to hope. She die one month after and the man suffered stroke and later gave up the ghost six months later.

It is as important as the oxygen and blood aiding our life not to engage in habitual debt dependency. Bad debt is like the description of the thief in the bible. According to the bible in ,  The thief cometh not, but for to steal, and to kill, and to destroy: I am come that they might have life, and that they might have it more abundantly.

-- John 10:10

KJV Holy Bible

How to Pay Off Bad Debt

1. Create a Budget

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From Pixabay

The first step in paying off bad debt is to create a budget. A budget will help you understand your income and expenses, and identify areas where you can cut back on spending. It will also help you prioritize your debt payments and ensure that you are making the most of your money.

Make this budgeting lifestyle a new trusted friend, Alia, partner and cofounder of your financial security. Changing or transformation from what use to be a habits of impulse buying and gratification can be challenging. But it is worth the practices in the long run.

Making a budget plan on your incomes and revenue directly points and show you where you are going financially. Like Robert Kiyosaki said in one of his Rich Dad series 'Financial Integrity', "some people make budgets to become poor."

Your budget is a financial guide to your opportunity cost since money is a scare resource. Making a mandatory and intentional lifestyle of working with budget is a great step towards financial security and leaving the world of bad debts.

Proper and efficient budgeting is why most people who got involved in bad debts survive the pressure and live like a king after they have clear out their debt. 

2. Prioritize Your Debt

Once you have created a budget, you need to prioritize your debt. Start by paying off the debt with the highest interest rate first. This will help you save money on interest charges and pay off the debt faster. You can also consider consolidating your debt into one loan with a lower interest rate.

As I have rightly pointed out in the first method on how to pay off bad debts which is budgeting. Make conscious efforts in prioritizing which of the bad debts accumulate the highest interest rates and fees for defaulting on deadlines. Begin to pay off the one with high interest while looking at means and ways to pay for the bad debts with low interest as soon as possible.

Most people try to pay of bad debts after everything. The truth is, they will be nothing left. Make paying for the loans you took a top priority on your budget list is an excellent way to pay off NAD debts faster and be financially free. Don't want to put paying off debts in the last paragraph or list on your budget. The earlier you begin to prioritize bad debts in your income and expense report, the closer you will be to financial freedom and also, your name will be on the tables of financial service providers as been credit worthy.

3. Cut Back on Expenses

Cutting back on expenses is an essential part of paying off bad debt. Look for areas where you can reduce your spending, such as eating out less, canceling subscriptions, and shopping for deals. Every dollar you save can be put towards paying off your debt.

Cutting back on expenses is like taking drugs because we are down with poor health. If you when you are sick wants to be in good health condition again. You take your drugs as prescribed by the doctor. Same thing is applicable in tackling bad debts. Just know that you are sick financially and creating a budget to guide your control over what goes out and comes in, prioritizing the bad debts in your budgeting report, and cutting down on frivolous expenses is you taking your financial drugs. And this drugs is a create way to show intend that you truly desire a debt free living.

4. Increase Your Income

Increasing your income can also help you pay off bad debt faster. Consider taking on a part-time job, selling items you no longer need, or starting a side hustle. Every extra dollar you earn can be put towards paying off your debt.

Have you ever come across the definition of the acronym J.O.B? the very first time I saw it I was down and soaked with laughter. "Just Over Broke! What the f**k am I seeing?" That day I begin the search for how not to become broke. My mind began the process of transformation and renewal. Then I get to discover Rich Dad series. I bought the first series "Rich dad poor dad".

If you are only depending on your job to settled your bad debt then it could take years and strenuous exercises to meet up bad debts and be free. You will be free but in old age except along the line you win lottery which the ratio or possibility is less than 1%.

Create another means of income and give it time to grow. You can start and I recommend online remote jobs. It is less expensive especially for writers. Another means of creating another income is buying and selling. Thank God for social media, you can make sales all over the world. 

When you create additional income and revenue, the length and pressure from bad debts will drastically reduced. Since most of the new income will go into paying off bad debt.

5. Seek Professional Help

If you are struggling to pay off your debt, seek professional help. A financial advisor or credit counselor can help you create a debt repayment plan and provide guidance on how to manage your finances.

Seeking help do not in anyway show weakness but strength, courage and desire. Let those train for these purposes help you out. It also put food on their table (Lol)

How to Be Financially Secure

1. Create an Emergency Fund

An emergency fund is essential for financial security. It will help you cover unexpected expenses, such as car repairs or medical bills, without having to rely on credit cards or loans. Aim to save at least three to six months' worth of living expenses in your emergency fund.

2. Invest for Retirement

While lots of people will recommend saving for retirement, I will rather advice "Investing for Retirement." In Nigerian civil service, some ministry are doing compulsory contribution and deductions is at source (via IPPIS), there is also the mandatory 7.5% so the workers are a bit guaranteed saving for retirement. 

The deal is to start investing in the stock market even with has little has N5000 every quarter. I will recommend you visit https://tradein.chapelhilldenham.com to create a trading and stock account. 

You can also invest in public speaking. Learning the act is vital as you grow older, people will tend to seek your views on a particular topic and with age attain, it is believe that you have gather information good enough to enlighten and liberate minds. You can live off this skill.

Also having created a side hustle and businesses during your active working days pays off big time at retirement.

3. Invest in Your Future

Investing in your future is another way to achieve financial security. Consider investing in stocks, bonds, or real estate. It is important to do your research and seek professional advice before investing.

Image by Santiago Gonzalez
from pixabay

Getting relevant skills in our today's world is also investing in your future. There are whole lots to free courses you can engage yourself and prepare for opportunities in online and this are top notch. The tech space is getting saturated but never should you use that has and excuse to abstain from getting to learn and acquire a tech skill.

Investing in your future is a deliberate effort you will not regret. This is also another way to secure yourself financially.

4. Live Within Your Means But Not Poorly

Living within your means do not mean living poor. It is wrong to live poor when you can afford a thing without it endangering your financial report book or budgets. Being frugal is what it means. Spend on what is important and be very prudent with money. 

Don't try to impress anyone especially girls if you are a guy. Do not feel others are way ahead so you want to compare with them. You do not know who is funding those guys lifestyle.

Conclusion

Life is deliberate efforts. Debts is not entirely bad but we can get involved in bad debts along the way. Don't let it be habitual to be borrowing for merely consumption simply because it is of your reach.

Bad debts is a big burden and heavy laden to decorate yourself with. It will press you down, embarrass you, kill your dreams and above all may cut short your life span. Try as much as possible to live frugally while pursuing affluence.

Follow the steps and guide in this article if  you have find yourself drowning in bad debt. 

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