Getting out of debt one step at a time – Budgeting 101

Debt

Getting into debt is so easy, it is nothing to be ashamed of it happens to the best of us. At the time you borrowed the money your income could have afforded it,  you gave into your impulses, you borrowed to start a venture that failed. Irrespective of the reason debt is something you can slide easily into if you are not careful.

The majority of the debt for Jamaican find them self in is related to consumption. Meaning money is borrowed to consume. This boils down to credit cards, unsecured loans, same day loans, COURTS and car loans.

  1. Now the first way to start getting out of debt is STOP BORROWING. Close your eyes and ask someone to hide your credit cards. You will never get out of debt if you are adding more debt to it
  2. Make a budget of your essential expenses. Your monthly manicure and Pedicure are not essential expenses. Essential is going back to the basics. Food, Clothing and shelter. The basic means the most basic price. Shrimp is not basic neither is Louis Vitton nor renting premises in upscale neighbourhoods.
  3. Secondly, try to get a second stream of income. https://financialassistantja.com/2017/03/21/excuses-are-never-an-option-if-you-want-to-earn-more-2/ . The purpose of this stream is to dedicate all profit in reducing your debt. If you receive any extra monies that you didn’t plan for, put it towards your debts.
  4. Try and consolidate the loans if possible. It is easier to be paying one entity than a multitude of entities.
  5. Make a timetable of how long it would take to pay off your debts. For example, if I owe $100,000 and I should pay $15,000.00 per month then it should take me 7 months to get rid of the debts.
  6. Make the figure consistent. Meaning if you decide you are going to pay $10,000, consistently pay $10,000. Don’t pay $10,000 this month and 5,000 next month.
  7. You have to be consistent, determine and dedicated, to reduce your debts. You cant pay this month and skip next month. You can’t make a sacrifice this minute and splurge next minute.

You must get yourself in the position you want with the resources you have. Manna no longer falls from the sky.

Need help setting a budget to reduce your debts? Shoot me an email shawnakay.mills@financialassistantja.com

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