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Pay Debts with DEBT


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Paying debts with debt? Does this mean I have to incur another debt just to pay the debts? So debt is debt? Let’s not get confuse here because of the title. The latter debt means differently than the previous one. Here’s how.

One reason why one can’t be able to save up is because of debt. Some of us even live from one debt to the next. And this is also one reason why we cannot be able to obtain financial freedom. Though we might want to eliminate this however there are varied factors that we can’t just let go. And have you even noticed that debt rhymes with death? Now that’s scary right?

Who has not incurred any debt here? I bet there’s none. There’s always that point in our lives where we had one or worst more. This might be due to a loan, a credit card debt or whatnot. If you are aiming to obtain financial freedom, one thing that you need to eliminate is debt. And we might have the solution for you here. This is DEBT.

So how is DEBT different from debt?

DEBT stands for

DEBT = Deduct Expenses and Burdens Too

So, did I get you? See, DEBT is different from debt. This post is not suggesting incurring additional debt just to pay a debt. It would be a never ending cycle of debts and we don’t want to experience that, right? What we aim is to get rid of debts once and for all. And how we can just address that? It would be DEBT.
So how can we reduce and even pay debts?

Deduct Expenses

Image from Curtis Library

The first thing one need to do would be to identify his or her expenses. If you haven’t done so before, it would be best to keep track of your finances for a month or two. It is wise to list down your expenses on a daily basis. From there you can be able to identify what eats your salary. Is it because of shopping? Constant dining out with friends or more? From there, if you want to get out of debt, make that simple sacrifice of deducting your expenses.

When I had my credit card debt piling years ago that I could no longer keep up, I identify items that were crippling my income. I had identified shopping and dining out. You see, my boyfriend and I eat out during lunch and dinner. I spend 100 pesos for lunch at most. And that is for five days a week or 20 days a month. If I were to multiply it up, it would be a good 2,000. So my boyfriend and I decided to pack our lunch and eat at a nearby carenderia where we will just spend like 10 or 20 pesos. The money that I was able to save would then be redirected to paying that credit card debt. This also goes with my shopping. I literally controlled myself from shopping again. Since we can’t help but go to the mall sometimes, I just stop myself from going in to stores and just drool from afar. I have a bigger goal in mind and that is to pay my debts. That’s enough motivation for me not to shop yet until I get my debts sorted out.

Deduct Burdens Too

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The second half of DEBT is deducting burdens. In here, we cut off burdens that would be adding to our debts. We identify those things that would persuade us to incur more debts. We deduct it or if not eliminate it totally in our system. Good examples for this one are credit cards and monthly bills.

Most of the time, we are confident to shop because we can just swipe away with our credit card. Worst, a single swipe could lead to the next purchase and the cycle repeats. And look at the next month after, you have another debt. So to cut that off, it would be best to deduct the burden of the credit card. That is what I did. I had five credit cards before that is why I can just shop away. When I realize this would never end, I decided to cut the four and maintain the one with the lowest credit limit. In the end, no more annual fees to pay and I can no longer shop freely hence expect no more monthly bills. I also applied the same system towards my phone bills. Since I know I’ll have debts on my postpaid plan every month, I decided to cut it off and shift back to prepaid. With that, I was able to save as much as 1,500 every month. Even more, I don’t need to worry over the next month because I don’t have any bills or debts at all.

DEBT or Deducting Expenses and Burdens Too will surely take some time. It would need a strong will and discipline to be able to do this. However, if you are determined to live a life without debts and bills, it is wise to do this the soonest you can. It would surely be difficult at first however think of that debt free life you can have in the future. And that is the kind of life that you must have.




P.S. To those doing the 52 Week Money Challenge and 52 Week Money Challenge Version 2, it is Week 5 already! Did you deposit the next amount yet?

P.P.S Want to know more about investing, savings, stock market and more, check out my reference here. You can download free ebooks and resources too.