Fifteen years ago, I own a credit card holder which hold all the credit card you can think off; both in visa and master card. I could purchase a car with the credit limit that I have.
I use the credit card to purchase materials for our projects. I paid it in time so that I would not incur interest and then use it again. It was a cycle for me, especially if the collections are delay and we need to finish all the projects in time. I was using it in a good way because it helps us in our expansion. We have project left and right. I thought it was a good debt because it could sustain us till the next collection.
And then what a good debt turn into a bad one, we incurred losses in several projects that we handle. We decide to get a loan from a group of business man and collateral our house and lot. I was hoping that the events of loss would turn around and we could pay back in time and have our mortgage cleared.
But it turns for the worst, especially when my marriage also suffers because of personal reason.
I really don’t know what to do; I wasn’t able to think straight
At to make thing worst, they are sequestering our home because the debt was due already and I have nothing to pay them
The good debt that I thought off turn into bad because it had a negative impact in our overall financial position
I thought of borrowing money from our relatives but it even made negative impact with our relationship because I could not pay it time as well
Being a single mom and seeing my children suffer made me stand up and decide to get out of debt
Being debt-free was my goal and it’s worth aiming for
Here are some of what I did
- I look for a job, an 8 to 5 corporate work that would give me a monthly income
- I set up a business with the help of my family, a night bazar where additional income will be generated
- I talked to the credit card company and negotiate my payment terms, first thing to do it to clear all my credit cards because they accumulated the largest interest. Whenever I had more income, I paid more than the minimum
- As for my home, the account executives who handle my account was so accomodating that she helped me in restructuring my loan, making it easy for me to pay monthly and pay more when the business is good
I told myself that my goal is to be debt free after four years
With hard work, long hours of staying up late to attend to my night market business and other trading, I manage to get out of debt.
Setting up a goal is what really helps me during the entire period
And now that I learn the hard way, how to be a debtor
Here are my new goals in life
- Never purchase using your credit card, I only have one just in case of emergency and make sure that I have money to paid for whatever I purchase using the credit card
- Never go on sale, the more you think that it’s on sale; the more you are tempted to purchase that you don’t need
- When considering borrowing money again, I ask myself these questions. If any of the answers are ‘no’, then don’t borrow.
- Will borrowing this money improve my finances in the long run?
- Have I shopped around to get the best deal?
- Am I borrowing this money as cheaply as possible?
- Will I be able to cope should interest rates rise in the future?
- Will I comfortably be able to afford the monthly repayments?
- Do I understand all the terms and conditions associated with borrowing this money?
- Do I understand the risks and what could happen if things go wrong?
- How much should I borrow?
- Live a simple life. It’s not enough that you are sorry that you made a wrong decision, learn from that decision
- Lastly, learn to invest and invest wisely.
Think about this?
What is the difference of a long table with a table for four when you just need it to eat at?
What is the use of a big bed with a single bed when you are just going to sleep on it?
Why need a phone worth a year salary when you can use a cheaper one that has the same application that you need
Whatever excess you have, invest it and invest it well
There are company that offers reliable investment plan
Learn from the expert about good debt and bad bebt.
Check out the asset management fund of Sunlife and you might find something that would suit your need
Check out their website at www.sunlife.com.ph