How to be debt free?

Once I my life, I been drowned with debt and in bad financial shape like unpaid credit card, housing loans, career downfall, medical maintenance, other loans, etc. In short, I am poorer than a rat. Yes, that was the point of my life that I almost get suicide. All I asked myself that moment was how to be debt free? Eventually, I am able to manage and work it to be debt free. How I do it?

First, I list all my debts in one notebook. After I listed all, I reviewed it and sort the debts that needs immediate attention and sort the debts that has high interest. Sort the debts that could wait to be paid.

Second, I list all my income and expenses. This is the most difficult part. After listing all my income and my expenses, it turns out that I have nothing to left to pay a single debt. So, again, I rewrite my expenses and have budget strategy.

Third, when I realize that my income and my budget was not enough to start paying my debts. I decided to get another extra job or extra income. Here, I search online which job would be fit to my schedule. I started to resell products online, become mystery shopper, get freelance job. After I get my first freelance job while working full time, I revisit my list of income and expenses. This time, I rebuild a budget planning. Read articles about financial online or books to help you learned more strategy.

Fourth, do a brief budget planning. In my budget planning, I do 70% for my expenses, 10% savings, and 20% for debt payment. It sounds ideal right? Yes and this is not easy. This strategy really need strong discipline. Every time I received my salary, I always put set aside 10% savings, then the 20% is divided on the list of debts that is need of immediate attention. Then I tried to spend only 70% for my expenses. Note that this is required high discipline to set a side of the 10% of your income to save. This practice will help you gain the financial freedom sooner. The 20% for debts is too small when you have left and right debts however, you have to be creative to survive. Like if you have thousands of unpaid credit card due, simple call your credit customer service and inquire any possible arrangement. Inform them that this is only the income you have and you can guarantee to pay this amount monthly till you fully paid off. That you need also to pay for your food and rent, etc. Credit card company will listen and they know how whats the best option for your case. The secret is just have an open communication and don’t be ignorant when to talking to any representative. Calmness and soft spoken will help you get help.

If you have housing loan that is for foreclosure, all you need is seek information from your housing provider for arrangement and loan reconstruct. Tell them the real reason why your not able to pay and explain to them your current situation. After, ask help what they can offer to you for loan reconstruction. Majority of this kind of company have options for their client. If you feel that you cannot afford it anymore then sell the house and lot but seek for advise for the market value, or perhaps have it rented for passive income this way it will help you earned extra too.

Fifth, when you started to pay your debt please make sure that you pay it seriously according to the schedule. This discipline will help you to manage your money as will lead you to be debt free.

Lastly, study and learned how to invest in stock market and learned how to have passive income. When you invest, don’t invest fully your savings till your comfortable with your investment. This is the secret to financial freedom.

The steps I share to you is not easy to do. Again, it required lots of discipline. Managing your money no matter small or big it is, if you manage it wisely and have discipline then very soon it will make you financial free. Note that paying debts is not one time. It take time, in my case it take me around 5 years to get in shape again.


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How much I know about money?

When I was a kid, I used to ask why my family has little and others has so much? Why some people have Mercedes Benz and why my family have only bicycle as our main service transportation? Why we are poor and why they are rich? Lots of question been ringing in my mind when I grow up. I followed my parent’s advice to save my allowance. Yet, I save all and everything I have and count them every morning. At first, I am so happy it growing however, in the end, when I wanted to buy a walking doll or a Barbie doll. All my savings just flow and I become empty and much poorer. I started to asked myself, what should I do to have unlimited money? Yes, I am just 11 years old when I have to realize how poor I am and my family.

When I was in high school, I saw so much about rich and poor. My classmates have more allowance than me. Some have its own driver to send and pick them up in school. They have branded things and latest gadgets. Although, I am not fun on material things but I still have this question, how come their parents afford it? While my parents can’t? Why they have there in own home while we still renting? Again, I am lost on wonder. In college, it get worse. Reality hit me hard. I could not pay my tuition fee. I could not even eat in McDonalds without a treat from a friend. Worse, I am not good in school. I lost my focus, no I lost also my interest as I don’t know what I want and need.

After college, I worked hard. Yet, I realize my earnings were not enough to cover our daily needs. I seek more jobs and the more I seek jobs, the more I lost control of my finances. Yes, I end up badly broke in the age of 28. It get worse that I reached to the point that the only ultimate solutions of my problem is suicide. I was planning already how to do it. Until, a thought realization why I end up badly broke? Why I could not manage my money? What I have done wrong that I screwed up like this? Slowly, I realize the fault. Slowly, I analyze my situation. The more I realize everything, the more I am able to see the whole picture. I was drowned. I told myself, no! I will be rich! I will be rich! This are the words that I am telling myself and a light bulb suddenly flash in my mind. There is a way.  No problem without solutions. So, I started to write all my debts. I also write my income. Reality strike me again. My debts is high as a tower and my income is just a penny. Then, question started. What I would do? So, again, I write my expenses. I write how much I could afford to pay. I sort things into priority. Then, prayed harder and harder that I would have enough strengths to hold on. I know I will survive.

I get new job and a part time job. I slowly paid off my debts. I learned to manage my finances but I forgot to pay myself first, which it is the most important of all. In my budget is like this, 70% of net income goes to expenses and 30% goes to debts. However, I left nothing for myself. I always have empty pockets. I started to worry. This is not good. I have nothing at all. I work hard and get nothing at all? So, I seek knowledge. I need a mentor but I could not find. I read articles. I read books. Until, I am able to read the book “The Richest Man In Babylon By George S. Clason”.  This book open my mind on how to achieved my ultimate goal to have unlimited money. In the book, it stated that we give 70% for expenses, 20% for debts and 10% for yourself. It also explain how to pay your debts by negotiating to the person I owe and explain the situation. Promise to pay consistently by month until its pay off. Yes, I applied this strategy. It works. Now, I am in the stage of building my financial freedom. Learned to expand my wisdom in printing money. I always remember to pay myself first prior to anything. Soon, that 20% for debts will be additional for that 10% pay for myself. I keep repeating this process and now, I only have two debts left while I have my savings. Today, I am busy seeking knowledge how to print money for myself and seek more knowledge in financial. I learned to read cash flow now and able to start my own IT Solutions Provider business.

For me, if you only know financial education and mold your learning. The possibility of being part of the elite group called “Billionaires” is in your hand, in your control. It is really up to us if we want to reach our destiny or we stop in the middle. Me, I will keep going and no matter how many mistakes I will take. I will always look up them as my strength, my mentor. If I was not badly broke and come into realization, I will never able to find the secret of making money.

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