(First appeared in Consumer News Namibia Magazine April 2013)
“Debt is like a disease that can enable us from living a happy and normal life by taking control over our lives. Most of us don't even know how we end up in the situation we are in. Buying everything we own with credit has become our culture. But don't let debt control your life any more. You can take over your life again. Imagine life without debt!”
Is it true? Can a person do things in life without using getting into a debt trap? YES. The problem is not about using debt or cash, but rather about financial management and making sure you keep yourself out of trouble and ensure you don’t worry too much about the level of credit you have or are using.
Remember the following are tips only – you must find the ones that work best for your and apply them to your life.
1. Don’t get into debt
Use cash wherever you can and do not take out any debt except for a motor vehicle or a house.
2. Spend less money than what you earn (obvious but needs to be said)
3. Write down all your liabilities so that you can see what is the amount of money you owe the world. This should be very motivational if you keep a record of this amount as you start paying it off.
4. Cut up your credit cards – all your clothing accounts, etc. should rather be on a cash buy basis
5. Avoid eating out – if possible cook at home and you will save a lot – you can splurge on a cookbook that can help make your meals a little more interesting too.
6. If you go out, visit friends and find things to do that is not expensive – going to the dam, or the park, visiting a museum, etc.
7. Plan for future expenses now.
8. Make a budget – and stick to it
9. Speak to your spouse or partner about both your spending habits – it takes both of you working together to reach your goals
10. Be realistic – the debt will not go away overnight. The same time it took to accumulate the debt is about the time you will need to pay it off
11. Eliminate some things – look hard at the things you spend your monthly budget on – and cut some of them out. This might be your MNET subscription or the gym membership that you never use?
12. STOP borrowing money – every cent borrowed during the month feels like twice the amount when you have to repay it. This is especially true if you are using a cash loan facility.
13. Turn off your television – this way the adverts will not tempt you.
Number thirteen was thrown in to make you laugh – but the advice of not letting temptation ruin your budget is true. Don’t take those pamphlets that the jewelry or clothing store gives out. Don’t open the catalogues they send in the mail – all of it is aimed at making you spend more.