Debt Part 2

20 July, 2020

Trying to keep up with the Joneses will keep you perpetually in debt. Stop spending money you don’t have, to buy stuff you don’t need, to impress people you don’t like! So let’s get a handle on your financial situation and start the process of eliminating debt in five steps. Remember: for this to work, you must not create any new debts!

  • List All Debtfirst step to reeling in your debt is to list everything you owe.
  • Set Goals – Write and communicate the short and long-term goals.
  • Work HardWork diligently and find creative ways to increase your income. This is a necessary component of prosperity.
  • Live Well Below Your MeansReduce expenses wherever possible and renegotiate any remaining debt.
  • Become financially literate – Learn everything you can about finances.

Consumer debt has grown (in trillions) owing to lack of financial literacy. Instead of passing on a good inheritance to the next generation, we are passing on debt and bad fiscal habits. To combat such, we first must clarify the difference between assets and liabilities. For example, many understand that liabilities are anything that takes money out of their pockets, while assets put money in. However, some of the very things people consider assets are actually liabilities. For instance, our houses can be a liability (unless they are generating income), but a necessary liability because, if you are renting you still have to pay rent. However, if you have bought more house than you can afford, you might be better off down-sizing or letting out a room in your home or taking in a lodger. Not at all convenient; but it may well be a temporary solution if you are deeply in debt. We should be leveraging our gifts and talents to multiply our resources so that we can expand our ability to reach the world and be a blessing.

 ‘A good man leaves an inheritance to his children’s children, but the wealth of the sinner is stored up for the righteous.’ (Jewish proverb)

The proverb suggests that, if there is no responsibility in the management of resources, then your wealth will be shifted to those who are responsible.

You may have really messed up financially in the past. But it doesn’t matter where you’ve been. What matters is the direction your feet are going right now.

The borrower is servant to the lender. (Jewish proverb)

 

Author: Yomi is a wordsmith, passionate about books, reading, education, healing and health. She has appeared several times on television and radio; speaking about her passion. She has Master’s degree in Medical Immunology from the College of Medicine, University of London and worked at a postgraduate college of medicine in London for over a decade before pursuing her passion for writing. She is the author of four books.