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Steps to get you out of debt

Friday March 17 2017

One of the challenges many employers are now

One of the challenges many employers are now facing is the debt situation of their employees. People cannot afford to retire because of their debt. Relationships are being strained because of debt. PHOTO| FILE| NATION MEDIA GROUP  

By WACEKE NDUATI OMANGA
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Do you feel like debt has defeated you? Most of us are in debt in one form or the other. Many of us feel defeated by it. We feel we can move no further, and as if we will be done for if some sort of lifeline does not come through. We feel alone and ashamed that we got ourselves into this situation.

One of the challenges many employers are now facing is the debt situation of their employees. People cannot afford to retire because of their debt. Relationships are being strained because of debt. Careers are being cut short because of debt. Business ventures are collapsing because of debt. This has become a serious issue, especially given the availability of credit in various forms. Credit is good if used the right way, but we have misused it for too long. It’s time we truly face up to it if we want to move on, create wealth, succeed and grow. If you feel defeated there are steps you can take to get out of your rut.

Accept that you will have to stop doing something to get out of debt. You must want to get out of debt more than you want a new phone, or a new line of credit at the bar, or a new house.

Start with how much debt you have. This is a scary but essential step. If you are in a pit and want to get out, you must know that you are in a pit, and also the depth of it. How much rope will you need to get out? List it down. Call the bank, Sacco, relatives, microfinance and find out how much. You may find it’s not as bad as you thought, or that it is just as you thought, or worse. Any scenario is fine – as long as you now know what you are dealing with.

WHAT DID YOU DO WRONG?

Face how you got into debt. You can’t be ambiguous about answering this question. You need to know the specific actions that got you here. You didn’t just land in the pit. You took specific actions that led you into the pit. What does ‘living beyond your means’ mean for you? Were you drinking too much and overspending at the bar? Are you buying too much food for the house? Is your side hustle leeching you dry? Are you eating out too often? Has your phone bill exceeded what you can actually accommodate? Did your problems start when you moved to a more expensive house? So it’s a business loan that went bad? Good, but what actually happened? You tried to run a business part time when it really needed your full time presence. You hired badly. You thought your relative could handle it. Or maybe your product or service needs to be re-thought. Let’s not blame the business and say it’s risky. Let’s face what went wrong. Face the music properly.

Don’t do what you did before. Once you know the specific action you took that got you there, you also know what not to do. There are people who get out of debt only to get right back into it again. Don’t go to the bar that many times a week. Keep an emergency fund. Don’t leave money in your accessible account when going to a mall. Don’t lend to that friend. Don’t hire that relative.

Every failure comes with a valuable lesson, but you will keep failing if you don’t spot the lesson. Doing the same thing and expecting a different result is the definition of madness. Many people want to get out of debt to be able to spend as they once did. If they did get a lifeline, they would do the same things that got them in debt. Accept that you will have to stop doing something to get out of debt. You must want to get out of debt more than you want a new phone, or a new line of credit at the bar, or a new house.

 

For more help on debt, visit Debt Makeover by Centonomy on Facebook or email [email protected] for how to enroll in a debt programme