Steps I Took To Get Out of Debt Accumulated in 20 Years

Yes, you read that correctly.  I've been in a terrible debt for 20 years and I tell you, it's one of the most horrible feelings I...

Yes, you read that correctly.  I've been in a terrible debt for 20 years and I tell you, it's one of the most horrible feelings I've had during my adulting years.  

In today's post, I'll be talking about how I got out of debt which accumulated in 20 years and also the importance of paying debts even if no one is chasing (or they got tired of it) you anymore to pay them.  Also some financial management tips which I also learned along the way.  Thanks to my hits and misses as well as my financial management failures - I learned the lessons for you.  So please, don't be like me.  Or if you are in a huge debt right now, I tell you, there's hope and YES you can end it too, just like how I did.

Whar are the debts that you could be in?  In my case, I had six (6) credit card debts and it reached a whopping P1,300,00.00 plus interests.  You could also be in a personal loan from people you know.  It could also be from government or private financial institutions.  As long as it's borrowed money and you haven't paid it yet, that's debt.

I wish you don't fall into a trap of borrowing money to pay another debt until you realize you've been in a debt cycle you cannot escape from.  You'll later be in much more debt if you keep on digging this hole.


1. ACKNOWLEDGE - The first step is to acknowledge the debt that you have.  By acknowledging it you'd get to assess your financial health and take steps in managing and getting out of it.  After acknowledging it, you have to decide to pay off your debts and when to pay them.  

2.  PLAN - Now that you've acknowledged your financial crisis, I call having debt as crisis, it will be clearer for you to plan your next steps.  It's best to prepare a list at this time.  First make a list of all your debts.  Next is to make a list of ways how you can pay them.  List down your source of income, your other funds, your regular expenses, and even expenses you can let go off for the time being until you pay your debts.  Compute if you're income and other sources of funds are lower than the amount of debt you have to pay.  List down how you plan to pay your debts.  Set a goal you need to save weekly or monthly until all your debts are paid. If your income is less than your debt, we can go to the next step.

3. LOOK FOR OTHER SOURCES - Other sources may mean two things: another sources of income to offset the deficit.  It may be from an extra job, an online business you could do on your free time, it could also be from services you could offer other individuals or companies which will bring you extra savings you can use to pay off your debts.  Now go back to your savings goals and make sure you meet this goal with the extra sources of income you could generate.

4.  CALL HELP  - Upon acknowledging your debts and assessing your capability to pay and seeing your financial or debt paying plans, you can now call the institutions you have outstanding balances to negotiate the amount you could pay on a monthly basis for a given period of time let's say 3, 6, 9, 12 months up to 36 months depending on how big your debt is.  You can always have a friendly payment arrangement that will not leave you broke.  The important thing is your intention to pay and clear your name so that you're accounts will be closed.

5. LOOK FOR FINANCIAL SOLUTIONS - that would help you get essential loans even if you have a bad credit.  Given that you have other expenses especially big ticket annual expenses for the family such as tuition fees of your schooling children, loaning an amount for these type of important expense is forgivable.  Good thing there are short-term financial solutions out there for people who struggle with a not so good credit due to outstanding balances from other institutions because of debt.  I know friends who I'm helping with their personal debt management availed of student loans from  This type of important and essential loan for the future of their kids are the type of loans that I too would avail should there be a need.  The needs of our children of course comes first.

6. START PAYING - Once that you have a master plan on handling your debts and managing it, it's time to start paying.  Make sure that you don't commit the same mistake as I did when I started paying.  I missed a few payments and it greatly affected my credit score and even added interests which got me into a deeper debt problem.  The moment I realized this, I looked for multiple source of income with paying all my debts in mind.  When I saved enough money, even if these institutions weren't running after me, I called them one by one to let them know if my intent to pay and that I am finally settling all my balances.  Ask if there are any amnesty programs you could avail and if there are any, that's better.

7.  CONTINUE SAVING - Congratulations, now that you're debt-free, continue saving and earning from different sources of income and you could even start investing.  Don't start spending more than your means.  Don't even think that you can borrow money again just because you're done paying.  It's still the best feeling knowing that you don't need to hide from anyone of any institutions you borrowed money from.  Being debt-free gives you a peace of mind that's very important for your mental health.

Now that you're debt-free or on the road to being debt-free, remember to keep on paying yourself first by saving.  Then instead of spending for unnecessary expenses, why not invest them in insurances, mutual funds and other safe investment schemes from legitimate financial institutions.  Should you need to borrow money again for important expenses such as schooling of your kids, there's you can count on.

Hope this post helped.  Road to debt-free, here we come!

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Mommy Practicality is a home and lifestyle blog that's about positive, informative, 
inspirational and helpful sharing of life experiences of a working mom 
with topics on motherhood, relationships, events, food, travel, shopping, and finances. 
It hopes to influence moms and women to realize 
that it's possible to live a quality life while choosing a practical lifestyle.

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