Debt Management (How to get out of debts and Debt Reduction )

Debt Management (How to get out of debts and Debt Reduction )

Having gone through the concept of debt management as well as some of the causes of debt we can now take a look at some of the possible ways of debt management (how to get out of debts and debt reduction ). Debt management (how to get out of debts and debt reduction )  is tied to so many factors ranging from physical, spiritual,

psychological and socio-economical. Now let me quickly share with you some of the ways of debt management (how to get out of debts and debt reduction ).

One way to manage debts (get out of debts and reduce debts) is the application of the rules of wealth creation ( Rules 1-18). This is the most effective, efficient and reliable way to  manage debts (get out of debts and reduce debts). In addition to application of the rules of wealth creation, you get out of debts as well as minimize debt accumulation by expanding your source of earnings. Your inability to strategically improve your earnings can expose and plunge you into more debts beyond your expectation. Mind you, you can manage debts (get out of debts and reduce debts) by taking risks. Risk taking here is taking a leap to be reduce and get out of debts. Such risks if taken at the appropriate time and well utilized can drastically make you debt free. Take for instance: if you are owing (or in debt of) $1000 and you have the leverage and opportunity to make $2000 by taking risks won’t you rather take the bigger risk in order to manage your debts (get out of debts and reduce debts)? Your guess is as good as mine. This is also true while I was telling you about liquidation previously ( to liquidate simply means converting assets to cash for the purpose of paying off debts). You will agree with me that an individual or a company who has assets that can be liquidated will definitely get out of debts and has it been such assets appreciated over time the assets will not only be used to manage such debts but rather they can as well be used to reposition the individual  or company financially. This goes a long way to say that assets are like pillars on which wealth can be created as well as debts can be managed.

Another way to manage debts (get out of debts and reduce debts) is the applying the principle of instalmentation. This implies that you can bring those you are indebted to into into understanding and agreement that you are going be be paying them a fixed amount at specific period of time depending on the gravity of the debts. This can be very difficult at times but the manner in which you approach and explain to them matters a lot if they will agree to accept your instalmental payment. If by assumption you are owing debt of say $200 and your income every month is $100 you can decide to let whoever you are owing that  you will be paying let’s say $50 every month while you are investing let’s say  $25 and using the remaining $25 for your personal/ family expenditure. If peradventure whoever you are owing agrees and you kept paying him/her that fixed amount of money every month without failing, between a period of 4 months you might have  paid off your debts and invested another $200 which you can fall back on. Thus, you have succeeded in not only being debt free but also you have raised $200 for yourself.

One other way to manage debts (get out of debts and reduce debts) is the applying the principle of budgeting. That is you should consciously and deliberately make a budget which you must always work with. Proper budgeting can help you avoid unnecessary spending such that you do not go into more debts in your quest of paying off your present debts.

Last ( but not the least) on my list of how to manage debts (get out of debts and reduce debts) is to pay your debts one after the other (if you are owing more than one person). Start by paying the one that attracts the highest interest rate. In  some cases you can plead with the person you are owing to free you of the interest rate. This can help you concentrate on the main debts and if he/she agrees you can pay the debt off faster. But this depends solely on whom you are owing to accept or reject your request to wave off the interest especially if you are consistent and persistent with the payment of the debt.

Food for Thought: ” Debtors can be come creditors and borrowers can become lenders when proper plans and strategies are in place.”

To me thsese are ways to manage debts (get out of debts and reduce debts). What are the other ways known to you? Share them as comments below.