A-Z of personal finance: D is for debt
Are you facing money problems? The early warning signs are usually very clear and include the following:
You are completely broke long before payday
You are regularly having to borrow from friends and relations just to make ends meet
You are coming under pressure from lenders
Your money worries are keeping you awake at night
So how did you get to this point? Was it your lifestyle? Are you extravagant? Did you make poor spending decisions? Were you trying to keep up socially? There are so many reasons for money problems but the good news is that it is possible to turn your financial life around.
Your attitude to your debt problems can hinder your financial recovery. If your way of dealing with it is to wish it away, remember that inaction will only make things worse. With interest, late payment penalty charges, and the attendant fees and charges you will find that almost all your money goes towards debt service.
Make a list of all your debts
To get a true picture of what you owe, list all your debt – in no particular order at first. You can list them according to size, due dates, interest rates, by whom you owe – it doesn’t really matter. Who do you owe? How much do you owe? What interest rate are you borrowing at?
Be sure that you are current with the minimum payments on all your debt. If you are not, contact your creditors to discuss your payments. It may be possible to restructure the debt in a way that enables you repay at amounts you can afford.
The full text appears in “A-Z of Personal Finance” by Nimi Akinkugbe. Available in leading bookstores including Glendora Books, Laterna Books, Patabah, Terra Kulture, Quintessence, Jazzhole …and online from Jumia, Amazon, Barnes & Noble, Manna Books and AMV Publishing
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