This post serves more as a reminder to myself than it does serve as a change of thought for solutions.
The debt I am talking about is not the good type. Asset building or investment.
No. I am talking about the bad debt. The one that charges interest that eats away at your disposable income. The nothing to show for it type.
I lived the high life once with my wife. Living for today. No concern for the future.
We got to a place where we could not afford the things we had. More importantly we could not maintain our living costs.
Our lifestyle cost more than what we were getting paid.
On this side of the coin I remember feeling stressed. Not knowing where I was going to money to afford my living costs.
I also remember feeling lost. Not knowing how to get out of my situation I put myself in.
I remember talking to friends and family about the problem. What was interesting though was that their default answer was to look at my living costs and make some changes.
In my predicament, I found this advice short sighted. Cuting out a grand here or there was not going to save me the 20 grand I was short every month for.
I had my own business, which means that I live in a world where awesome income is possible. Just that the market or timing wasn’t right at that time.
Looking back at that stage, I realize now that I had no control over my spending. What’s worse, I didn’t know how to get control.
That’s the one side of the coin. The other side of the coin, I got a close family member who has found themselves in this position and they don’t know how to get control again.
Seeing the other side of the coin, I find myself saying to this person that they must look at their budget and make some changes.
Interestingly their response was the same as mine. Cutting a few grand isn’t going to help the R20k short fall.
Their lives are out of control and they don’t know how to fix it.
The truth is hard to face. Once light is brought into darkness, clarity helps give peaceful direction.
The solution from the other side is this:
Stop. Sit down.
Now think about what the bare minimum is. What is the minimum you need to live.
Write it down. List all the minimum expenses you have.
If your list of minimum expenses is more than the income you receive, you are not being realistic to yourself.
You need to enter survival mode. What is the minimum you need to survive?
This survival mode is temporary. So don’t worry. You are not going to go through the rest of your life just trying to survive.
Instead, you are taking a step back so that you can build momentum to go two steps forward.
Bare minimum needed to survive. List it.
Once you have list that shows what the minimum is, you can look to take corrective action.
Cut out the excess expenses. Stop all unnecessary debit orders. Move out of expensive property. Downscale.
Regroup. Consolidate. Set yourself to work from a strong core base. Grow from there.
It’s hard to put ones pride down.
If however you are living a life of stress and unhappiness just to appear successful, it doesn’t add up.
Downgrade temporarily for yourself and your happiness. You can build your foundations from there..
Hope this helps.