Dealing with personal debt

I avoid giving financial advice because I ain’t consider myself as a financial coach. Yes, I got myself out from debt troubles and have a few investments but that doesn’t mean I’m a guru. That’s why I’m hesitant to talk about finances extensively more so to give financial advice.

What am I good at then?

My husband jokingly (or probably he’s serious) said last week that I have the talent to convince people to follow my instructions and let them believe that it’s their idea. I paused for a moment contemplating if I should refute that observation but then I know that it’s true (I’m doing it to him all the time haha).

One of my strengths is being able to persuade others to pursue their dreams. I’m good at unleashing their innermost financial desires and believe that everything is possible for them. Not really sure how it works but I guess they can relate with my stories, experiences, and positivity.

The Wealthy Pinay is geared towards entrepreneurship, and although I want to focus on that, I know that lots of TWP readers are still in the stage of tackling debt. I don’t know about you but it’s difficult to stay in the zone of prosperity when there are so many payable. It’s difficult to stay being positive when most of your income just goes to the creditors.

No matter how positive we are, having no money left every month (lalo na kung kulang pa) creates havoc to our money mindset and I get it. I totally get it.

I mentioned in my book – The Wealthy Pinay: A Guide For Exceptional Pinays To Create Their First Class Life – that there are various reasons why most people take loans/credit cards that soon become unmanageable. They could have used the money for children’s tuition fee, house loan, car, travel, hospital bills, etc. You might be drowning in debt due to serious issues or maybe just because you made some bad money decisions. No judgement here.

We can’t undo the past and it’s futile to beat ourselves up for our wrong choices. The only thing we can manage is now. How can we tackle our debt The Wealthy Pinay way?

  1. Stop spending. Period.

If you are in debt, please remove the “work hard, play harder” motto in your life because hindi mo pa sya deserve. It might be painful to hear but I’m telling the truth.

I know that you’re working hard. I know that you’re doing everything for your family. I know that you deserve a treat for all your sacrifices but avoid any additional expenses until you sort out your finances.

Unless your reason is life or death then there are ways to stop or significantly reduce your expenses. It’s painful telling you to stop spending because I’m an advocate of living your life the way you envision it – and if that includes travelling, bags, big houses and nice cars then I want you to experience them.

BUT… we must be sensible, and patient too. That dream will come, I know. But for now, we must use our logical sense rather than our emotions.

Stop spending no matter how much you think you or your family deserve it.

2. Consider your debt as a challenge

One of the reasons why most of us struggle paying off our credit cards/loans is because we think of it as a burden. Isa syang malaking hadlang sa lahat ng plano natin sa buhay. “Kung wala sana ako utang ang dami ko na siguro ipon.” “Mag for good na ko sa Pinas kapag tapos ko na yung mga utang ko.”

By having these sentiments, we are giving debt so much control of our lives. Can you see how money can control your decisions? Scary, right?

“So Lyn Joy, would that mean I shouldn’t mind my debt problems and just continue living my life?” Please don’t ask this question personally because I might be tempted to retort back, “Engot ka ba?

If you ever tried losing weight and manage to lose a few pounds (or more), consider debt elimination as something similar.

Debt doesn’t define you (same as your weight). Debt can be eliminated. You just need to set your intentions well and believe it can be done. If you feel overwhelmed as if it’s never going to end, remember that you’re in control of the situation because you are.

Don’t give your debt the power to cripple you. Act on it.

3. Know how much you owe

Doesn’t only to bank or creditor companies but list down everything you owe from family and friends too. Knowing how much debt you have helps you stay aware of the bigger picture.

Update your list every month as you pay bills because it’s psychologically helpful to see your debt decreasing. It gives you the sense of empowerment (remember point 2).

4. Finish off your credit cards first

If you make only the minimum payment each month, it will take you longer and cost you more to clear your balance. Paying minimum is designed to keep you in debt paying huge interest.

I had several credit cards and was paying minimum for the longest time until I heard an advice to take a personal loan and just pay off all my cards. It might be a ‘duh, it’s so obvious’ advice but it never occurred to me and it was the most sensible financial decision I made to settle all my credit card debts.

My book also mentioned how I manage to close few cards using the snowball debt method. You can Google it.

5. Pay your bills on time each month

Late payments make it harder to pay off your debt since you’ll have to pay a late fee for every payment you miss. Never miss your due date. Do whatever you can to pay at least the minimum in all your credit cards.

But what can you do if you have exhausted all means and there’s really no money left to pay your monthly dues?

Two things:

  • Lower your lifestyle expenses
  • Earn more

There’s no other way.

I know someone who is in deep financial trouble. She was jailed twice in Dubai because of loan default. You think that she has learned her lesson after the jail time but NO. She still continuously spend for her son, for her mother, for her wish of having a ‘nice’ life.

Is it her fault to dream for a good life? No, of course not.
Her damn fault is spending money she never has.
Honestly, I’m hurt. After months of mentoring – sharing my experiences, giving her practical advice, telling her to stay positive – the only thing that stuck is the being positive part. It turned out that she’s soooo positive that she keeps on spending even though she drowning in debt.

Please don’t be like her. We can make mistakes and do stupid and illogical decisions, and that is fine. It’s part of the learning. But to continuously repeat the same illogical and stupid decisions over and over again is another thing.

Paying off debt is more than just numbers—it’s a test of mental strength. It requires hard work and self-control.  If you consider yourself as a tough and independent woman, then don’t let debt pull you down. You can conquer it. Just create a plan.

And while implementing your plan, don’t forget to be grateful. You still have a job, no one is sick, you have an abled body and mind to go through this challenge, and you’ll win it! The fact that you still have the will to settle your debts is a sign to the Universe that you ain’t giving up – and that’s good enough.

Live The Life and Business You Have Imagined!

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