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How to manage debt, relieve financial stress

  Francis Muli

Debt is sometimes inevitable in one’s life and how you manage it matters a lot. The country’s current external debt which has hit Sh5 trillion is proof that debt is a fact of life.

Another case is the one published by BBC of Chris Lynch, 41, who was a hard-drinking student when his debts started to build up and his life started to spiral out of control.

At one point he was £35,000 (Sh350,000) in debt – and that is when anxiety and depression took hold of him and wondered whether he would live long enough to pay it.

According to research, up to four million people could be at risk of poor mental health brought by debt and money problems.

The charity Mental Health UK surveyed 2,000 people, of whom many reported feeling stressed, anxious, isolated and depressed by financial worries and one in six admitted to having suicidal thoughts because of them.

It is important to shun by all ways possible reaching this stage. At this stage, the only hope is going somewhere where your creditors will not find you. This place is nowhere else other than the grave. Here are some tips on how to manage your debt to avoid this trouble.

Have a list

This helps you to know who you owe, how much you owe them and when the debt is due. With the list, you can manoeuvre your way and manage your debt well. You can even seek extension from your creditors in case the time is due and you are not ready.

Monthly payment calendar

From the debt list, you can create a calendar that will help you know who to pay what amount at what time. This will help you manage your income as well as balance between debt and expenditure.

Agreement with creditors

Most friendships are broken because of debt. Agree with your creditors on the mode you will use to pay them, and the timelines. Stick to the agreement and honour timelines. If you do not have a means to pay them, let them know early in advance.

Prioritise debts

It is good to pay all debts and remain a free man, but sometimes your income will not allow. Pay the debts with higher interest rates first, to avoid any accumulation. For instance, if you use credit cards, paying off credit card debt first is often the best strategy because credit cards have higher interest rates than other debts. You can also choose to start with the lowest debts by clearing them once and for all.

Earn extra

Side hustle seems to be one of the best solutions to most modern-day financial problems. If your debts are burdening, find an extra job or business to help you pay off the debts.

Avoid Debts

This is the best way to avoid debts. With few or no debts, you are like a free man. Proverbs tell us that when we are in debt, we live as slaves to our creditors. You work for them throughout.

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