Have you ever been in a situation where you switch off your phone because every call that is coming in is from a debt collector? Before 2022 there were over a hundred digital lenders but were unregulated. In 2021 there was a CBK Amendment Bill 2021 which enabled the Central Bank of Kenya (CBK) to regulate the digital lenders. Therefore, as of September 2022 the CBK listed 10 digital lenders out of 288 applications. This clearly shows that there is demand for loans. The problem comes when certain digital lenders go to the extent of calling some of your contacts and threatening them.
Debt is something owed especially money. Examples of debt include student loans, mortgages and car loans. Debt can be good or bad. Robert Kiyosaki elaborates that Good debt is when the money is used to buy something that puts money back into your pocket while bad debt is when whatever is bought with the money does not put money back to your pocket.
One of the greatest financial challenges that people face is paying off debt. Therefor the goal of most is people living debt free lives. Here are 6 ways to live a debt free life.
- Track your expenses.
Tracking your expenses is one of the most basic things you can do to organize your life financially. You may use an excel sheet to track your expenses. When you buy anything, you record it on the excel sheet. This includes an item that costs one shilling. This will enable you to take note of how you spend your money on a regular basis. You will be able to also take note of where you are wasting money. If you would like to learn more about excel sheet, you may register for the course BASICS IN EXCEL TRAINING (FREXCEL) – FREE COURSES – FINSTOCK EVARSITY COLLEGE.
- Develop a budget
A budget is an estimate of income and expenditure for a set period of time. Once you know how you regularly spend your money, you can write up a budget so as to estimate how you will use your monthly income for that month. This will enable you to live within your means. You may learn more about managing your budgeting records through the course BASICS IN RECORDS AND ARCHIVES MANAGEMENT (FRBRAM) – FREE COURSES – FINSTOCK EVARSITY COLLEGE
- Find a method of paying of your debt that works
There are several methods that enable you to pay off your debt. Examples of these methods are snowball method and avalanche method. Snowball method means paying off the smallest of all your loans as quickly as possible. Once that debt is paid off, you take the money you were putting towards that payment and use it onto the next smallest debt owed. Avalanche method involves making minimum payments on all your outstanding debt, and then paying off the debt with the highest interest payment first. Register for the course BASICS IN DEBT MANAGEMENT (FRDM) – FREE COURSES – FINSTOCK EVARSITY COLLEGE to learn more about debt.
- Stop taking bad debt
As you work on paying your debt make sure you are not taking up more debt. This is because you will not be making one step forward and 2 steps behind. This make you be in a rat race an you will never achieve a debt free life. You may learn more about debt management through the course BASICS IN DEBT MANAGEMENT (FRDM) – FREE COURSES – FINSTOCK EVARSITY COLLEGE.
- Find an accountability partner
An accountability partner is a person who will keep you in check about your financial management. This should be someone you can be totally open and honest to about your financial situation. This person will keep you in check on your budget and also on your debt repayments. You and your accountability partner may learn more about financial management through the online course CERTIFICATE IN BANKING & FINANCE (CBF) – SCHOOL OF BUSINESS – FINSTOCK EVARSITY COLLEGE
- Stay out of debt
Being able to clear all your debt may be a flex on its own but staying out of it is hard work. You have to be disciplined enough to stay out debt. This will enable you to live a debt free life forever. You may learn more about debt management and credit management through the course DIPLOMA IN CREDIT MANAGEMENT_ LEVEL 1 (DCM1) – KASNEB – FINSTOCK EVARSITY COLLEGE.
