People all over the world have been greatly impacted by the Covid-19 pandemic. It is not just a global health crisis, but all sectors have been hit. The Philippines is deep in debt in order to finance health protocols, treatments, as well as to aid the people during this time. On a personal level, how can we be debt-free during this time? Here are some tips that can help you get by until we reach a semblance of normal in our lives.
It is Liberating to be Debt-Free
Every responsible person knows that personal loans or debts, especially those with high interest rates, are like shackles. For whatever reason that we had when we have taken out that loan, it felt good to have cash on hand and some liquidity at first.
But eventually, you will realize that you need to pay that loan and sometimes, with steep interest rates.
We will not go into how we got into debt in the first place. Our goal is to be debt-free even while there is economic crisis as the pandemic is going on.
Tips to be Debt-Free
You may already be aware of some of these things but just need fresh insights. Or maybe, you just need some reminder and a little motivation to push you to achieve being debt-free as soon as possible.
Debt-free living is liberating.
Live below your means.
Many of us earn but we spend way more than the income that comes in. Let’s aim to just lower our expenditures to the most basic needs so you have money to start paying off your debts and maybe save some?
Pay off your debts with the highest interest rates first.
Some of us owe people or banks some money. And in many instances, the loan interest rates vary. List down your loans, the amounts, the amortizations, as well as the interest rates. Rate them all according to priority.
Then make a plan to start paying off the ones with the highest rates. That way, you actually get to save money and use it to pay your other debts.
Have another source of income.
Yes, times are hard. Many have lost their jobs or businesses because of the pandemic. One of the hardest hit industries is tourism and events. Travel for leisure has also been put on a halt.
Find ways to earn. If you still have a job, have a second job or a sideline income. Or start a small business. Moreover, you can check online for work opportunities you can do at home.
Use your credit card wisely.
We get financial advice that tells us to let go of our credit cards. Well, that is if you cannot control your spending.
The truth is, the credit card is a good tool. It allows you to buy your needs during the present time but delays the payment. You can use your extra money to pay off your debt.
Moreover, it can be your emergency fund. You may be cash-strapped now, but the credit card can help you extend yourself when the need arises. There are many establishments that accept credit card payments, including hospitals.
You also have the option to pay in installment or transfer loan balances to a card with a lower interest rate.
Let go of things you don’t need.
Check your closets and boxes in the house. You will find some stuff that you haven’t used for years because you don’t need them anymore.
But somebody else is looking for them. You may put them up for swap in local barter communities and get some stuff that you need at present. That way, you can save on some grocery money.
Or, you can sell them. Letting go of things you don’t need clears up space, improves your home, and makes you extra money.
Make and sell stuff.
You may not have a second job, but why don’t you cook stuff and sell them online? That way you earn some pocket money that can be used for your current living expenses. So if you have a salary, you can use a big chunk of it to pay your debts.
Teach your children to live simply.
Many of our children have been used to living a good life. They have gadgets, nice clothes, while many families even have cars. Moreover, they are used to eating expensive food.
But the crisis has levelled us all. Restaurant dinners are limited because it is recommended that we stay safe at home.
Your kids may have had a lot of adjustments but if we gently guide them to live simply, we will realize that unnecessary expenses we spend on kids will amount to a lot.
Distinguish between needs and wants.
We have been left now to the basic necessities for survival. Yes, we are allowed some allowances for our inner joy and peace of mind.
But we realize that a lot of things do not matter while we are facing the Covid-19 pandemic.
You can take this further by listing down your minimum needs for the month. Compare that your income and then you can make adjustments.
Be inspired by the success of your neighbor.
There are just people who fall into debt because they look at their neighbors too much. From that, jealousy creeps in and the desire to compete with what they have throws logic out the window.
The bad thing is, the only thing that people usually compete with, is trying to outdo the neighbor in terms of owning stuff. But they don’t run after how the other home was able to procure such things.
If there is anything that we should look at in our neighbor, it is to be inspired by their success. Learn from them. You will have a better life that would eventually lead you to be debt-free.
Stay Safe at Home
Let’s stay safe at home. If you are not needed to go out, stay at home with your family.
As much as possible, don’t let other people besides your family go into your house. Everyone is now suspect because of the widespread Covid-19 infections.
These are necessary outings.
- Buying necessities (grocery, medicines, etc.)
- Medical checkup
- Pay bills
Other than these four, think first if what you are going to do outside is worth the risk of getting Covid-19 and infecting your whole family.
And yes, getting hospitalized for Covid-19 can really get a family into debt. So stay safe and healthy.
Stay healthy and take Xanthone Plus Mangosteen Food Supplement.