Financial struggles teach us a lot about ourselves and managing our finances
When you find yourself over indebted you may find
yourself wondering if you’ll ever be able to turn your financial situation
around and live a debt free, stress free life. Of course, not getting into debt
in the first place would have been the smart thing to do, but sometimes
unexpected situations cause us to be consumed by debt or we simply don’t have
the skills to stick to our budget and over spend. Getting into debt should be
hard, according
to Roshawn Watson, a writer who advises people on getting out
of debt, investing and building wealth. He says that the struggles will teach
you how to spend your money in the future, how to plan more carefully and where
to cut back.
He points out that some of the richest business people
today have experienced great financial difficulties in the past, but it taught
them how to be better at what they do. Having failed financially does not mean
that you are a failure: it means that you will have to work harder at finding
ways to earn an income, using your creativity, living wisely and making smart
investment decisions in the future. You shouldn’t forget the sacrifices you made
when you were in debt and how hard it was to be free of it again, because this
will keep you from going down that path again and seeing the warning signs
early on.
One of the ways in which South Africans can save
themselves from the debt trap is to apply for debt review. The simple reason
being that if you cannot keep up with your repayments, you are probably over
indebted and the last thing you should do is take out another loan to pay all
of the others. If you couldn’t cover your living expenses and loan repayments
this month, how will you learn to cut back enough to add ANOTHER loan’s repayment
to your expenses by the next month? Debt review is especially valuable for
people who have a bad credit record, don’t have assets to use as collateral to consolidate
their loans and feel that they have gotten themselves in way over their heads
with the amount of repayments they have to make every month.
Debt review forces you to take responsibility for you
income because the debt counsellor works out a budget for your monthly expenses
and you have to stick to it. Failing to do so will mean that you simply won’t
have any money. Those under debt review cannot take out any more loans and if
you try and skip on repaying your creditors they have the right to cancel the
review and take you to court. However, debt review also takes a lot of stress
off the person’s shoulders. The debt counsellor arranges restructured payments
with their client’s creditors and handles the legal aspects thereof. The
consumer has the right to work through the debt counsellor and creditors will
be notified to only contact the counsellor during the review process.
Even though debt review means that people will have to
make some lifestyle adjustments and give up their creature comforts and make
other sacrifices, most consumers welcome it. It’s currently the most effective
way for creditors to be repaid and for consumers to be protected from their
creditors while getting the financial advice they need. Once you have completed
debt review, you will receive a certificate and this will allow you to qualify
for credit again. However, after going through the lengthy and often painful
process of paying back all their debt, smart people work to make sure that they
stay far away from being over indebted again and strive to use their credit
wisely.
Indeed, credit can open a lot of doors for us: think of
home loans, car loans, student loans and credit cards in an emergency. Without
these, our lives would be much harder. However, they come with the major
responsibility of paying them back. Don’t allow credit to take away your
freedom, but use it to better your life; for instance the independence of owning
a car or the opportunity to pay off your own place.
Image licensed to Itani stock photos
It's a brave work. Thanks for......
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