Debt can be a vicious cycle. It starts with debt, which leads to debt-related stress and anxiety, which leads to more debt because of the increased financial pressure. This is a vicious cycle that many people find themselves in, but it doesn’t have to be this way!
In this blog post, we will talk about how you can break free from debt and end the cycle for good!
How does debt enslave?
First of all, let’s talk about debt. Debt is an agreement between two parties to borrow money from one party and repay it at a later date with interest added onto the total amount borrowed.
However, debt can become dangerous when you are unable to keep up with repayment deadlines or pay back what was originally owed because you simply do not have enough money. This can lead to debt collectors coming after you, wage garnishments, and even legal action.
So how do you break free from debt? The first step is to figure out exactly how much debt you owe. You can use a debt calculator or simply list all of your debts including the interest rate and minimum monthly payment for each debt.
Once you have that information, it’s time to develop a debt repayment plan!
Now let’s say your debt payment is Kshs 50,000 per month and you want to be debt-free in five years because the thought of debt makes you so anxious. If this describes how you feel about debt then continue reading!
Go back to your debt calculator and figure out how much you need to pay each month in order to be debt-free in five years. In this scenario, it would be Kshs 25,000 per month.
Create a budget that allows you to allocate an extra Kshs 25,000 each month towards debt repayment. This may require some sacrifices on your part such as:
- Eating out less.
- Drinking less at the bar with friends.
- Packing lunches instead of eating out at work.
- Take public transport.
- Do domestic work by yourself.
If debt repayment is your priority then you will do whatever it takes to ensure that debt does not hold you back!
What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?Adam Smith
In a nutshell
If debt has been holding you back from achieving financial freedom then start this process today by creating a budget and beginning debt repayment. If debt repayment is your top financial priority then you will find a way to make it work!