Checklist to avoid or effectively manage your debt

You must remain vigilant to be emotionally free when you are not in debt. And if you are facing a debt crisis, then it’s important you free yourself emotionally.

When ‘red flags’ pop up in your mind and your intuition makes you uncomfortable, don’t take the decision to accumulate more debt no matter how dire your situation may be. It can get extremely hard, especially when you are in dire need of more cash…for instance, if you have no money to pay your basic living expenses; no money to pay overdue bills and other creditors; you are barely surviving with food daily; you are embarrassed because you are unable to accept invitations to socialize as you have no spare money; you have run out of excuses to creditors who constantly call you…etc.

I can continue with this list but by now you would have got the point. Nothing can ever prepare an individual for the time when he/she must face a debt-crisis. So it is all a huge shock to the system, incomprehensible as it inevitably consumes your life at the end. And unless you put the control measures in at the early stages, you will spend much time procrastinating to either avoid facing the situation, or simply having some form of hope that it will disappear and these are fallacies we start creating in our minds when we cannot handle the debt-crisis situation.

Every single individual in this situation goes through this phase, without exception, and I am absolutely sure of this statement because debtors think nobody else experiences these situations. But trust me on all levels they do face the same situations and emotions.

For those who are not in debt as yet, here is my advice:

* Budget your salary from day one and allocate a fair amount as your monthly savings. I would say at least 30 per cent if you can.
*Speak with your bank and inquire the best interest, over long fixed tenures so you are unable to access the funds.
* Forget about the funds; make do with your remaining budget.
* Keep adding additional amounts if you can or simply find a fixed facility from your bank where you can contribute those extra amounts over a longer period. This is your second savings plan as you can never have enough savings.
* Allocate a reasonable budget to buy something you need or like each month. This way you don’t feel like you are pinching yourself off.
* If you wish to buy more stuff, save for it until you have enough, then go and buy it because you will appreciate it more.
* Treat yourself weekly to a breakfast on your off-day or do something that you enjoy.
*Save extra monthly so at the end of each quarter you can go on a cash shopping splurge and spoil yourself more.
*Avoid feeling like you have a lack in your life because you don’t have the false spending power perception.
*Remember if you do not have the cash, then you do not have money, so avoid the plastic at all costs.
* Donate or contribute what you can afford to a good cause because when you learn to give with an open hand and heart, then it will come back to you in more ways than you imagined. That is the law of nature.

For those facing a debt-crisis here is my advice to you

Conclude your plan of action with the banks to ensure affordable monthly payments that you can comfortably maintain until you are debt-free.
*If you have no extra money to spend after meeting your remaining personal commitments – then you have no extra money for as long as it takes.
* Try to do extra part-time jobs if you can, with permission if you are employed and explain your situation as every little bit helps.
* If you must go into stores, then go, feed your eyes, let your imagination roll and think of a time that you could afford those things you desire, savour the moment and move on. If you are fortunate to have Dh100 or Dh500 then keep it in your pocket and say to yourself - “I have the money to buy that but I won’t”-  and move on. You can do that multiple times during your visit because it does not send out a message that “I want that but I can’t afford it” so there is no signal of lack in your emotions and this means that you are conjuring abundance and prosperity from within so guess what? Things will start coming your way more than you expected.
* Do not entertain negative thoughts or people. Be positive and you will become used to feeling good and so good will come and you will then not continue to build resistance.
* Do one good deed every day, even if it is making a cup of coffee for someone at the office that you feel is emotionally depressed or down, just try it, because it works!

When you are in recovery mode you must learn to transform all of your negative habits into positive and I have many such free resources so feel free to drop me a line and I will send it to you.

You can never do enough good in a day, a week or a month and you can never destroy a feeling of happiness unless you choose to do so. Debt is not a bad thing, it is when you are unable to control the situation, that it places you in a bad situation and if you are in recovery, hang in there, and it gets better as you progress. But, remember, never give up because you can do this!

[Note 1:  Theda Muller is a UAE-based author of two books: Embrace Financial Freedom Volume One: 10 Proven Ways To Release Debt And Emotional Fears In Today’s Economy, and Volume Two: Releasing Fear And Bouncing Back From A Debt Crisis.
She also conducts webinars and workshops on debt recovery.]

[Note 2: The views expressed are the author’s own and do not reflect in any way, the views of Emirates 24|7. Readers are advised to carry out their own due diligence before taking any decision.]

Follow Emirates 24|7 on Google News.