iDentistry The Journal identistry_may_aug2019 | Page 27

The Journal
The bottom line still remains that credit card
debt which is outstanding has to be cleared as
soon as possible before the situation absolutely
worsens and goes out of hand. We have to
always remember a few below listed aspects in
our mind:
1. First change has to be in us:
The first and foremost change begins with us,
ourselves as we have to recognize and change
our bad habits, impulsive character, rash
spending patterns and the first step starts with
admitting the fault first that we are in some
serious trouble. The second step begins with
reviewing our past spending patterns. If we had
been spendthrift, we might have been spending
money on things, we don’t even need actually.
We have to truly understand and realize the
harmful effects of impulsive buying and realize
how overspending has hurt us in the longer run.
This money could have been invested by us in
mutual funds or any other such financial
instrument or saved to be used on a later date in
case of a financial emergency.
2. Charter out a plan on how to go about
repayment aspect:
The next step in this chain is to charter a path on
how to repay back the debt. If we have multiple
debts across various credit cards, then we
really need to plan on how much to pay and on
which ones first. The most efficient and
judicious method (as advised by experts) is to
close off the lowest debt first and then continue
upwards.
3. Budget your expenses and plan:
Once we land up in debt, it becomes a source of
great stress for us. Getting out of it can seem
tough but it surely is not impossible. Most
people fall in debt trap because they do not plan
out their monthly expenses relative to their
income.Therefore, budgeting and proper
planning can take care of all the monthly
expenses required. A good plan can help us
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come out of debt and let us stay out of it as well.
4. Identify to segregate strongly between
your needs and wants:
We have to start by differentiating our monthly
expenses under needs and wants and also
decide on savings. How we can make an
efficient monthly budget can be seen from
reference example below:
a. Under needs list, we can put up the bare
necessities of our life like minimum credit card
payments, groceries, utilities, bills etc.
b. Under wants list, we can add shopping,
dining out, travelling, leisure etc.
c. It is not necessary that we exhaust all our
money under needs and wants but keep
something aside for savings as well like any
investments to make or instruments to save tax,
any retirement funds, any pension plans, any
mutual funds etc. or any other types of savings.
This is the amount that will come handy for us
when we won’t be in a better condition to work.
5. It is imperative that we don’t further add
on to our debts:
Once we know and accept that we are in serious
debt which if not closed can cause some
serious cash crunch problems in our life, the
best course of action in this situation is not to
further add any other such similar debt. It is best
to avoid taking any additional debt loans from
credit card. First, wait to close off the current
debt before taking on any other major financial
risk in life.
6. Inculcate discipline and financial
strictness in your life:
It is important to go over the whole episode as to
how we fell in debt and trace back all the bad
financial decisions made by us.Impulsive
buying should always be curbed at any cost
even if we meticulously plan and somehow
Vol. 15
No. 2
May-Aug 2019