Archive for November, 2013

How can Debt change our lives?

Monday, November 4th, 2013

At one point in our lives we experience having financial problem which forces us to borrow money which later on results to a huge amount of debt.

Debt management has always been a problem to many seafarers and even I was not exempted from it. There are numerous reasons why people and each individual will tell you that If they only have a choice, they will not do the same mistake.

We have a choice not to have debts but I’ve noticed that our nature to buy things that are not a necessity are the one that forces us to get into financial trouble.

Seafarers who got a promotion and increase in salary immediately jump into a decision to buy expensive cars and houses then later on realizes that they cannot pay the monthly bill anymore.

They return to the agency after a few weeks rotation and asking their crewing manager to get them back on-board as soon as possible.

They created their own nightmare and sooner than they think, they’ve lost their car, their houses, and the affection of their family due to the missing moment spent with their family.

Debt also makes us work more, and less enjoyable. The money you earn, you no longer own it. It will just slip through your hand and directly to the payment of your debts.

Why force yourself to work for something that you should have prevented from happening in the first place. If we have manage our spending habit properly and live below our means, we could have saved thousand of dollars in our emergency fund.

Probably you are thinking of looking at your accounts and calculating how much is left and what you should do about it.

 

The bad side of Debt

 

Being in debt is a very complicated matter. It affects your whole personality.

It makes you unhappy at work, makes you easily irritated. It makes you worry about what your future may be.

Loans are the first culprit that puts you in debt. Many establishment including banks, will entice you with good offers that will make you want to have that car loan, housing loan, and personal loan. They will even throw in a long term payment at a small monthly payment.

Seafarers easily jump in and never thought of preparation. They never even bother to ask or consult it with their family and just decide for themselves that they want it and they can pay for it.

One loan to another and later on found out that their salary is no longer sufficient for their family. No longer sufficient to pay the house bills and most importantly no longer sufficient to pay their loans.

Later on, they decide to sell the car, sell the house, and sell whatever they have in possession. Keeping in mind the idea that they can buy it again when they go back to ship.

Even though that is true, if you calculate the money you have spent during the previous years and the estimated money of buying a new property, you have lost a lot of money in your pocket.

That money could have been put to a better use, and worst of all it had put you in a huge amount of debt that you are still paying.

Our nature to buy what we want is usually the cause of the problem. Money is not the problem, it is our nature to buy lustfully. Envy is the right word for it.

The envious nature of having what other people have or possess even though we cannot afford it yet is the reason why all of us are candidate to be in debt.

 

You must learn to be in control

 

Debts makes you obligated to pay someone that you owe. If you are comfortable with it, then you’re a natural debt magnet. But if not, then you have to minimize your debt and later on avoid it.

You need to reorganize your financial plan (if you have one) or else you will be meeting up with “Debts” brother, and that is being “Broke”.

If you haven’t applied Emergency Fund in your financial plan, then it is something that you should consider.

 

Debt free solution, and you need to do it!

 

Learn to take it slow in making decisions, especially when you are getting into big amount of loans. You must think of long term payments and problems that may arise along the process of payment.

It is a good practice to always ask yourself, “If in case I don’t yet have the money to pay for it, what are my options”. It makes you aware of what you are getting yourself in.

Start building your Emergency Fund while you are paying your debts. It sounds crazy, right? But few seafarers realize that Emergency fund has many forms.

You can start to put small amounts of money on a savings account, and it should be regularly. Do not miss on saving money. On a certain amount that you have saved, transfer it to an account that gives higher interest.
Keep on saving money on your account and at the same time your other savings account is earning money for you.

Lessen your expenses, only buy things that you need. Keep it a constant practice to do this. You need to be disciplined and consistent in paying your debt and saving money.

Remember that the only solution to solve your debt problem is you. Earning a good salary as a seafarer makes you forget about the proper management of your money. Now is the time you start dealing with your problem and organize yourself to keep you debt free.

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