Debt No More: Don’t spend your life, invest your money!

Occupy Wall Street demonstrators participating in a street-theater production wear signs around their neck representing their student debt during a protest.

Car insurance, school, mortgage, utility payments, food, transportation. You have asked a friend if you can borrow some money since you were broke halfway to pay day. Then you ask another friend to lend you the previous amount to cover the debt with your previous friend, does it ring a bell to you? Is this a familiar position? Well, as a matter of fact, most of our society does.  It is almost certain that at one point or another in our lives a loan or some type of credit will be required to achieve accomplishments such as buying a house or a car. Realistically speaking, debt is inevitable, but stress isn’t.

By following some simple tips, coping with dept can be a stress free process for you.

1. Identifying your income and expenses: Knowing how much money you have is way different from guessing how much money you have. When we lack a budget, most of us believe we have more money than we actually do; therefore, this false illusion of economic solvency is created due to the lack of organization. Create a list of all your income sources (make sure it’s raw income) and create another list with your expenses. Identifying these two key points will give you a more accurate look at your economic reality and will help you plan ahead, making the process of coping with debt easier.

2. Budget Up! : Distribute your incomes in the most efficient way to cover your debt, simple as divide and conquer! Even though you know much you have, that doesn’t mean you know how to spend it. The designation and distribution of income among debts is called a budget, a list detailing were money comes and were money goes. Take note that the money left after covering all and each single expense you might have is the money that you can save, leave 10% of that remaining money to spend (hobbies, extra meals, basically money to have some fun with) and save the rest.

3. Identifying possible budget cuts: Coping with debt is not only about distribution of money, is about spending in a smart way. Most of us have things that are not truly necessary in our budgets, expenses such as magazine subscriptions, plans for a new smart phone, those designer shoes you wanted, all these are not necessary but they are indeed present. It’s not bad to pamper yourself with some luxury every now and then, but these are the first that must go when your budget feels tighter. Remember that the whole point is to leave some money for savings.                                                                                                       

4. You run money, money doesn’t run you: Economy is harsh, but that is no reason to be harsh on you. It is a fact that the economy isn’t what it used to be 5 or 10 years ago due to many reasons, but the hardest part of dealing with debt /s is dealing with yourself and your stress.  Be positive about your situation and stick to your budget, when stress kicks in and desperation is running your wallet, the only outcome of that is bankruptcy. Staying organized and prepared is the key way to stay focused on the road that our budget creates, after having an organized structure of incomes and expenses; the uncertainty of how to cover any specific debt will be over.

As silly as it may sound, life is not all about money. There is a time for everything; budget, family, work, training your dog, and every single and small pleasure life presents you with. Always have in mind that you control your pocket, money is not your primary mission in life, and it is simply a tool to achieve greater things.

About the author: Cristian Aguilar is a happy talkative free thinker that is into traveling, gadgets, video game addiction, poetry, writing, psychology, engineering, unicorns and internet cat jokes; a spontaneous set of harmonious variables that result in randomness and uniqueness , taking every day as new opportunity to find a little more of himself in others. Follow him on Twitter @C7Aguilar