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28 March 2024

Personal finance: When in debt, help yourself first

Theda Muller

Published
By Theda Muller

When you are in debt you need to learn to help yourself first.

Very clearly, if you don’t nobody else is going to do it for you, because it is not their problem and why should they? When you are facing a debt-crisis you start being reluctant to help yourself and then the bad habits snowballs and after a while you block the situation out of your mind like it doesn’t exist and there the danger starts setting in.

Typical bad habits adopted are:

a) Avoiding the situation completely like it is non-existent;

b) Avoiding ongoing creditor calls;

c) Making false promises to creditors – they may not be false, you may not really have the money but then ask to meet them, present your situation and request a solution.

Avoid making promises just to keep them quiet for few days as they are recorded and will be a negative when you are seeking their help for consideration. Remember, they are doing their job!

d) Not opening creditor letters – You could be receiving a surprise cheque in the mail, or some magical offer that you end up losing because you never bothered to open the mail.

e) Irresponsibly not even paying the least you can afford monthly on your accounts, you rather opt to not paying at all than realising that even if they pay at least a quarter of the due payment, it shows credibility and willingness to pay – that may count in your favour in the future the day you face your creditor and ask for help.

f) Applying for more loans and credit cards to service existing debt – You are just digging more holes to close other holes that will never be closed and the only thing you are doing is creating a vicious circle for yourself that will come to an end soon.

g) Wasting your time running around to clear your blacklisting with some banks to secure credit facilities – This will no longer be effective so you are wasting your time.

If you are blacklisted now, chances are you will not be approved for credit for a good couple of years so you may as well come to realisation of your true debt situation and learn how to handle it.

h) Taking advice from people who have never been in debt and who are purely speculating just to be vocal – Get professional experienced coaching or advice as you don’t have time to waste.

i) Hiding the situation from your spouse or family to whom you are responsible – If they love you and you can present the situation in a way that they can comprehend what prompted you to secure the credit, then your battle is halfway won as you need their support, trust me on this.

Learn to open up, share your problems with them and for sure they will understand and once you have gained their support, you will feel better to face your debt situation head-on.

j) Learn from your mistakes and those around you because we can see many examples today. The first time can be forgiven but repeatedly making the same mistake means you have not learn’t a lesson and somewhere along your path life dictates we pay our dues so maybe not now, but at some point the lesson will present itself. This is true most of the time.

k) Compile a schedule of your debt, including all key columns so you can visibly see your situation. Seeing it makes it real, brings you to a realisation because the hard cold facts will stare you in the face and make you take action.
Twirling it around in your head is like a game you are playing because you cannot remember all the key points you should and so it’s all over the place, totally unorganised.
So how can you gain any clarity of your situation when they are not all in one place?

l) Maintain records of your statements, payments, creditor contracts and correspondence so you able to reference disputes argue the facts correctly and win some of your battles if you ever find yourself in this situation.

m) Be a stickler for detail – Means ask the questions you need to ask, record them, follow-up, make more notes, call when you are scheduled to call, attend creditor meetings promptly by scheduling them, insist on receipts and copies of cheques or documents where you do not have the originals – Be prepared to maintain files that will serve you.

n) If you have spare money, you have paid your monthly debt and bills; don’t go browsing around with itchy purses to spend that money. Learn to build a nest-egg for any day that you may need spare money for whatever purpose because disciplining your spending habits will transform you as a person, it just feels different, lighter and more pleasant to manage. So when you change your attitude towards money, everything starts changing in your favour that is how it works.

o) If you have unnecessary ‘things’, sell them, put the money away in your nest-egg and forget about it.

p) Be selfish for you first because right now in your hour of dire need 100 per cent there are very little or nobody around to help or support you and this in itself should serve as a lesson. But never forget those who did reach out and help you do not ignore their reach and learn to show your gratitude and appreciation anytime you are able to do so. Reciprocation is important for those who were there for you in your dire time of need.

There are many lessons on this journey but the most important lesson is that you stop remaining faceless, stop being this person that is hiding in a closet, living a pretentious existence and not taking ownership and responsibility for your situation.
When you find the time to learn or gain knowledge and experience when in this debt-crisis situation then remember, whatever investment you must make to learn the tools and techniques to become debt-free, should never be perceived as ‘someone charging money for nothing’ or ‘I don’t need that’ or ‘I will not pay that’ or ‘I cannot afford that’ is not being true to yourself.

Why?

Because of all the debt you are now facing I can almost guarantee that you have nothing to show for it, not even an investment in yourself.

So right now is the time to make that decision because you are more important to you than anyone else, so is your debt-recovery.
These lessons can only be learn’t from a true coach and mentor who has been there, the rest is just hot meaningless air and the sooner you realise it, the better it will be for you.

[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.]