Six simple ways to get out of debt

Not being able to meet your financial obligations can make you decide to borrow to pay later and borrowing can make you run into huge debt. Here we will discuss some tips to help you reduce accumulated debt.

It is possible to pay up your outstanding debts by making conscious plans and efforts to achieve debt reduction.

Debts have a way of piling up fast and accumulated debt has some health impacts that can be very harmful. It can lead to emotional stress, increased blood pressure and general sadness.

These are six simple tips that can help you reduce debt or completely get out of debt:

Say no to more borrowing

If you are really serious about getting out of debt, the first step is to stop borrowing. Make deliberate effort to stop. You can achieve this by looking for more opportunities to earn money such as commercializing a skill that you are well known for such as: cooking, singing, content writing, consulting, fitness coaching, video blogging, website development and many more. All you need to do is sharpen your skill and make it good enough for customers to consider continuous patronage.

Highest to lowest interest rates

When paying off your debts, make a list starting from the loans that have the highest interest rates to the ones with the lowest interest rates. Think of ways you can work towards reducing the interest rates and gradually end the debt repayment and break free from the debt cycle.

Read Autobiographies of Billionaires

You can get really inspired on how successful business leaders got to where they are by reading their autobiographies, their own written accounts of their life. You can learn from their principles of wealth creation and apply it.

Develop a saving culture

No matter how little income you make, try to have a habit of setting aside some savings. This is always helpful during the rainy days. A culture of saving, when cultivated, can go a long way to help you live within your budget or means.

Have an emergency fund

It is a good thing to have an emergency fund so as to have where to get money in cases of emergency. You can have an insurance cover against certain unforeseen situations that might come up and require money.

Sell off unwanted things

If you have some valuables that are not so needed at the moment, selling them off to come out of debt is worth considering.

You should find these few tips helpful.

To enjoy a peaceful debt free life make continuous effort to avoid habits that can cause you to incur debts. Think of alternative sources of income and never try to impress anyone. Learn the principles of financial freedom and always apply them.

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Curing some maladies of small and micro enterprises

In this piece, I have deliberately replaced ‘challenges’ with ‘maladies’ to highlight the subtle but devastating nature of their impact on business – just as diseases wreck the body.

Understanding certain peculiar challenges facing micro enterprises and small businesses would allow us to solve the puzzle of why not less than eighty percent of small businesses in Nigeria fail between two to three years of operation. These circumstances appear trivial but have negative impacts on businesses, if not properly managed.

Countless essays have been written on the reasons small businesses fail and how to curb them. Unfortunately, none has aptly identified realistic scenarios and circumstances surrounding their operations which are breeding grounds for failure if they are not optimized.

Here are some scenarios and what small and micro enterprises can do to overcome such situations:

All eggs in one basket

Firstly, electric power situation in Nigeria is generally bad and unreliable. How do residents, who share the community with small businesses and have no alternative power supply, meet their power needs? They hang around and within shops and kiosks to charge their phones and other electrical and electronic gadgets. For businesses that profit from customer’s retention, this is a money-spinner.

An example is a gambling shop. Instead of discouraging their prolonged stay, provide an organised ‘power corner’ with durable power sockets and extra seating arrangements. In this part of the world, businesses are not immune to the syndrome of ‘Scratch my back…’, even when you are not legally obligated to them. They would only frequent shops that ‘help’ them.

Did you ever think you can earn commission from displaying and selling shoes for shoemakers? You can even design the shoes yourself!

Attitude to challenges

Micro enterprises respond to challenges of business climate very quickly because of their small size. These responses most times cost them unbudgeted cash expense. Consider a cocktail mixer whose preparation went awry as a result of miscalculation. He is faced with the dilemma of either disposing the bad product or selling it as it is but at the risk of disappointing customers. He can turn that challenge into an opportunity to experiment with more additives, an opportunity to discover more recipes by playing around more flavours.

Buyer support

Thirdly, do you give credit? Sometimes, customers want to make purchases but are limited by the funds they have at hand. In fact, they may have cash in bank or may be expecting money from a friend or family or employer. If you fail to sell your product or service to them because they cannot tender the full payment, they may not come back to you when they have the full money.

To be on the safer side and minimise your business risk, give partial credit to those that advance nothing less than half of the cost price of the product or service. However, have a solid strategy in place for collecting outstanding debt and this should be stated clearly to creditors in your statement of terms and policy.

Micro enterprises or small businesses that adopt these techniques would surely survive the age-long curse of ‘eighty percent of small businesses failing between two to three years of operation.’

Best wishes to small and micro enterprises everywhere.

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