Debt, and How to Deal with it!

Priyanka Bhatia

First off – you’re probably familiar with “will power” and how it can effect changes in your life. Remember the smoker who quit through sheer will power? Or, the time that you wanted a toy and threw the biggest tantrum in the world to get what you wanted? And, didn’t get it!

Then, there’s “won’t” power. Maybe you’re not as familiar with that. But again, remember the time you said you wanted a particular thing – maybe a great ayah for the times that you have to go out to work – and you said, “I won’t settle for less”. And, behold, it happened? Or, the smoker who said “I won’t smoke, ever in my life again”.  And, was back to smoking, hacking and coughing within just a few hours?  (Psst – I’m talking about my business partner who smokes. Wicked, aren’t I?)

Both strategies are unreliable, as you can see. What is it that powers these strategies? In other words where’s the fuel that keeps you, or me, or my partner on track and willing to give up something to get something bigger?

And, what does this have to do with debt?

Here’s how I look at it. People don’t like talking about debt – that’s “won’t” power. Or, they use partial knowledge to deal with it. Or, they think that one day, if they work hard enough, with will power, they’ll have enough to pay it off. Mostly, they use will power or won’t power to deal with it, rather than use a method or a process that will bring the results they want.

So, what is it that will keep you on track?  It’s energy. Not just any old kind, but an especially powerful kind that you can locate for yourself and in yourself, in these two deceptively simple exercises below.

2 Energy Exercises

1. First, shut your eyes and think of taking out your wallet and paying for something that you really needed. Maybe it was today’s groceries; maybe you paid your child’s school fees. What did that feel like? Is there a positive energy associated with that purchase?  That’s called a Financial Energy Boost. It happens when you’ve accomplished something that you want with your money.

2. Now try this – again, with your eyes shut. Go back to an event, perhaps a get together with friends or an outing where you paid for your meal and maybe for others’. But when you left the get-together, you were a little disappointed with the outcome. And, felt a little sorry that you’d spent time and money in a way that wasn’t useful. Do you have a memory like that? Sure, you do. Everybody has them. Right now, my partner is sitting there wondering why he spent another Rs.70 on cigarettes. That’s Rs. 70 times 30 = OMG Rs. 2,100! Suppose he put that much in just SIPs all these years!)

Get in touch with the disappointment there, in your own experience. That’s called a Financial Energy Leakage.

It’s a leakage, get it? It’s not just money that’s flowing away from you – it’s emotional energy! Its emotional energy that you need to build your life, to dream your dreams, and to act on your vision for yourself and whoever is precious to you!

When your energy drains out, you’re left with despair, tiredness, dissatisfaction and more.

Next Step: Get in Touch with Your Anger

Now that you have a hint of what your Financial Energy Leakage is, explore some more.  Every time you spend money, notice whether it’s a Financial Energy Leakage or a Financial Energy Boost!

And when you have the full impact of how much leakage there is, get angry. Really angry. Angry like break-all-the-dishes-in-the house- and-wreck-the-TV-too angry.

Yes, that’s what it will take for you to really address a problem as mean and as nasty as debt.

Without it, you’ll just go back to using the same habits that got you into debt in the first place! Without this kind of rage about how your financial life is going, you’ll just take little steps powered by “feel good and look good” stuff that doesn’t change a thing.

But, please – don’t be angry with yourself!

I know you didn’t wake up one morning and say to yourself – “Hmm, today, after lunch, I think I’ll scare the Dickens out of my family and go into deep debt!”

No, you didn’t! Debt happens over a period of time and it’s a combination of several factors – and, one day, you wake up to it and it can be overwhelming.

Some Steps to Freedom from Debt

If you’re living from pay cheque to pay cheque, carry your credit card outstandings, and fail to save anything – then, I’ll say it point blank: these steps cannot work without your really being possessed by the feeling of Get-This-Thing-Out-Of-My-Life-Forever! If you’re in trouble with debt make sure that you’re committed to following these steps!

1. Build a 3-month emergency fund. I don’t care what it takes.
2. List your debts – smallest to largest
3. Don’t worry about the interest rates at his point
4. Cut expenses – put away money and any extra income towards paying off your debt
5. Prioritise your loans, but start with baby steps – knock out the easy ones first. Feel the rush of a Financial Energy Boost!
6. Negotiate for lower interest rates. Most credit card companies will negotiate if they see you’re genuine about paying back
7. Re-finance a loan and get lower rates
8.  Postpone buying any major assets
9. STOP using your credit card!
10. Change your spending habits. If you’re in debt, obviously, you’re living beyond your means. Spend less than you earn, and you will get out of debt sooner!
11. Involve family members. Give them the truth about the debt burden. Let them know that they have to change their spending habits, too so that all of you get out of debt faster!
12. Build momentum – save and invest after you’re debt free!

More Help

Sleepless nights? EMIs building up? That’s toxic and maybe you need professional help. Some free initiatives are offered by ICICI Bank, Bank of Baroda, Union Bank, the Banking Codes and Standards Board of India. Check with a branch in your city.

Or, flag me with an email or inbox me on Facebook, too. You know I’d be happy to help.

Final (Sticky)Note

Consider a simple sticky note: Its usefulness consists in the ability to stick to one thing till it gets done. Stick to your plan. Leave reminders for yourself wherever you’ll see them. Be tenacious and with persevere. The results are truly worth it!

Oh, and, if you want, you can send my partner a quick note on our Facebook page, too!

Priyanka Bhatia is the co-founder of One Tree Spaces, a niche wealth creation and real estate business that caters exclusively to women

Picture credits