Avoid the ‘devil and deep blue sea’ debt situation

By Ken Monyoncho

Debt traps often come as a result of run away expenses. The best way out is to keep your expenses as low as possible.

Experts on personal finance agree that getting into long-term obligations that demand ‘you buy now and pay later’ lands one into trouble. The general experience is that these expenses could become a problem in future.

Managing them will give you the freedom to contain your lifestyle when income fluctuates.

The prevailing inflationary pressures call for change in our patterns of spending.

Let us assume that you have already made commitments on income not earned. Thus, when your expenses go up or income comes down your lifestyle should change accordingly.

A flexible attitude to embrace change when the time comes is the catchword here.

Nevertheless, there are several measures the individual can adopt to keep off the debt trap.

It is advisable, for example, to switch from maize meal due the rising cost of the cereal, to an alternative source of starch.

You may also reduce the number of times you go out for dinner from thrice to once a week.

The bottom line is a change in lifestyle to meet our goals. This is because you cannot continue living the same lifestyle as before.

Instant gratification is a culprit that can bring about a run away expenditure leading to debts. Picture a situation where one walks into a supermarket and sees all things that he/she really ‘needs’. This is when the credit card will put you in more trouble: Because you will begin to enter the debt trap.

The way out

Most people are in fact in debt. But, there is always a way out when you go shopping with a credit card and suddenly the desire to buy everything strikes.

Acknowledging that you have a weakness in spending will be the first step of avoiding debt. However, you must be careful not to allow avoid in the process because nature hates vacuum by setting the right goals. Most people eliminate or reduce food from their budgets but do not replace it with anything. This is the same problem with those trying to get out of debt.

It is common that those willing to eliminate debt, or save money do so by cutting down on spending. But as soon as the goal is attained, they reward themselves, by lavish shopping, putting themselves where they came from.

Set goals

Getting out of debt means you can’t spend money because you don’t have it.

In managing debts, the following objectives suffice:

First, set a positive goal: "I will save to buy a car" is a positive goal, where as "I will not spend is a negative goal".

By focusing on your positive goal you will quit spending because you will be so focused on your goal and you will not notice that you are not spending.

Secondly, set a date for achieving the goal: A goal must have a deadline. It must be attainable. But, incase you miss the deadline, set another.

Thirdly, write it down: Until you seal your goal it is not real. Keep reminding yourself.

Finally, stay focused: If your goal is to buy a car, get pictures of the car you want or the home you want.

Once in the right mood you will find it easy to stop spending money unnecessarily.

Focus on the benefits you will derive when working towards your goal and not the sacrifices you are enduring.