10 Ways How to get out of debts in your 20s,30s and your life in Malawi

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Money well managed is a beautiful thing everyone would want to have more. Mismanaged money however, is the worst thing that that ever exist. I would like to welcome you to a wonderful read about staying out of debt. Debts is one of the things that have proved to be imprisoning people in their homes.

Before we go into detail, let me point out that debts can either be good or bad.

Good debts helps you grow your financial muscles. For instance, borrowing to increase business productivity is a goo debt. It is borrowing money to increase sells of an already profit making entity.

Some debts are bad. These are kind of debts that depresses people. Debts which makes the borrower a slave of the lender. Such debts are the ones which that should be avoidable if possible. If they are not avoided learn to manege them well.

I am going to discuss practical measures that are known to true ways of avoiding debts. Some of the points shared within this article can also help when you want to mange already existing loans.

Without wasting much time lets look at the first step to avoiding debt life.

Live within your means

Living within meas simply means that a person should spend according to what they earn. They should spend less than they earn. The greatest temptation that comes with life is the desire to spend more than is affordable. Failing to resit such temptation is a recipe for a debt life.

Youths who are starting off life; they have got a first job and small families are caught up easily in to obeying the temptations to spend more than the y earn. This becomes the beginning of debt life for many people.

However, things weren’t supposed to be like that. Bad debts should not be accumulated starting from the earlier days of life.

I can give an example that can clarify what it means to spend within the means. Imagine John earns a monthly income of K100,000 a month. Spending within the means;john should spend less thaknK100000 per month.

Additionally he should be able to save some amount (at least 10%) from the sum he has. If he spends more than K100, 000 that will be an invitation to bad debts.

Save and Invest

According to Jewish financial knowledge every person should save at least 10 percent of the income they earn. The more a person earns the more they should save. Unmarried people should save even more.

The Reserve Bank of Malawi in one of its reports describes that saving culture in Malawi is too low. Very few people in Malawi save for bad times or to invest. Poor saving habits are costing people a lot of happiness.

It is good to start saving as soon as possible. The more a person saves the better they become financially. Some people think saving is a bad habit, they call it greedy, however, this isn’t true.

Money saved has various functions such as on emergency spending. But savings can also be invested in business opportunities that can help in multiplying the available amount. Saving money only to be spent on luxury is not wise.

Buy more asserts, less liabilities

Thirdly, another way to stay away from bad debts is spend money wisely. Spending wisely simply emphasizes on buying more of asserts and less liability. Foe most people, the problem that drives them into debts is not that they don’t earn money.

The big problem with some people is that they spend more on liabilities than accumulating asserts. Richard Kiyosaki in his book Rich Dad Poor Dad explains that the difference between the rich and the poor.

Kiyosaki says that rich people accumulates more tangible asserts while poor people spend more on buying liabilities. With more spend on liabilities a person is left with little to no money to save or invest. And when emergencies come borrowing starts.  

Have multiple income sources

As you are aware bad debts results largely because there are more expenses than disposable income. There are more outlet channels for money than there are inlets for the money. Basing on this fact, it would be reasonable to think that increasing the number of income sources will reduce the burden of debts.

Having multiple streams of income will potentially increase amounts of disposable income. Amounts which would help reduce the debts burden or help to entirely pay off all debts.

Income streams can be increased for example by offering part time services over the weekend such as talking gigs, establishing a side business, investing in farming, witting a book, offering an online course, or producing a TV show.  

The idea is to maximize productivity time besides the work done on the job which is the primary source of income.

Getting more  quality education` 

An old Jewish wisdom says that the best investment you can make in your future is education. Quality education is paramount to leaving a debt free life.

One thing education can do to a person is that it will enable the person get a good job or build a sustainable revenue stream from business.

Furthermore, quality education will enable a person make wise financial decisions that will help them stay away from debts.  

Change spending habits

So we’ve looked into different ways that would be helpful in trying to be debt free in the early years of life. And indeed in a life time. Let me point out that one crucial area to look into as we fight for debt free life is our spending habits.

If our poor spending habits are not checked, the rest of the methods shared so far will not yield expected results. Impulse buying and borrowing are some of habits that have to be tamed.

Impulsive buying occurs when we buy things we dint plan for. We buy because we’ve seen something adorable, and we’ve got cash at hand. It is a bad habit just as impulse borrowing. You might have seen many people borrow money or take consumables on loan simply because someone offered to lend them the money or allot them to take goods on a loan.  

For example, some lending institutions come at work places or even in homes offering loans. Anyway most of them make false claims that they offer small interest (by hiding a bunch of hidden costs). If the loan was not planed chances are that such borrowed money will be spent unnecessarily. It will be wasted. That is how bad it is to borrow impulsively.

Don’t Act like the Jones when you are not them

A person who truly desires to be debt free, should be willing to be highly disciplined with their money. Financial discipline is key to a debt free life in Malawi.

Financial discipline affects a persons life style. As such copy and paste life styles may bring allot of financial discomfort. In every neighborhood there are the Jones, people who have all that they want. Families who have allot of disposable income, lots of asserts, and every thing money wise is under their control.

Now, the enlightened will try to copy the kind of life the Jones are leaving while they don’t have the financial muscle. The Jones because they are rich they can afford expensive houses, cars, and luxurious spending. They wont be hurt.

However, doing the same by another person who has little money may be disastrous. It can lead to high debts that after some time may lead to total regrets. The reader is  advised not to copy others spending culture.

Stay away from a kind of life that pride in competing with other who are better than you. The best to do if opportunity prevails is to sit down with the Jones. And learn their secrets. Learn from them how they managed to acquire what you are admiring.

Be prudently frugal

In reading about lives of the world richest, I have known that many of them are frugal spenders. They are not hyper spenders. Several authors have also found out that frugality is not as bad as it sounds.

Thomas Stanley,for instance, writes in his book, The Millionaire Next Door, that being frugal is the cornerstone of wealth – building. Being prudently frugal minimizes likelihood of failing into debts.

Well, I am writing this knowing for sure that the word frugal has a very bad connotation in Malawi. Frugality, in our society is equated to “evil”. No wonder we have many people struggling with debts. Because, our society encourages hyper spending which is ruining may peoples lives.

Therefore, as already pointed out, being debt free in Malawi requires a personal transformation. It calls for a new form of “you” and a new set of financial beliefs all together. You cannot be doing the same things and expect different outcomes.

Furthermore, it means developing a strong hatred for debt life which will required the person to be willing to stop living to “fit in” and start living according to plan. Taking control and challenging his/her financial belief system.

As Steven Silbige describes, in his book, The Jewish Phenomenon, being frugal with your money does not mean being a miser. He defines a miser, as going far out of your way to save very little money.  Steve further points out something that we can all learn from the Jewish spending culture. He writes “Jewish spending habits can be describe as a balance of selective extravagance and prudent frugality.” Prudent frugality.    

Have a small family

It is hard to have a large family and stay debt free in Malawi. As the number of children increases in the family, demand for resources also increases. Quite obvious, isn’t it?

In Malawi as in many developing countries breadwinners mostly depend on monthly salaries to provide family needs. Unfortunately, salaries for majority of employees in the country are very low. It is sad knowing that about half of the Malawian population earn less than MK100, 000 a month.

However, the average cost of living in Lilongwe, for example, is K140 000 for a small family. I don’t want to do much mathematics here, I know many of us hate maths.(Food for thought). But it is clear that having a large family all depending on a small monthly salary income makes it really had to live debt free.

The straight forward point is keeping our families smaller will help serve us from the debts burden. There are many ways to control family size such as using family planning methods and staying longer in school.

Remember your wedding is a one day activity

Lastly, I would like to bring to your attention that many young people are in debts because they over spent during their wedding day.

By the way I hope you already know more this than I do. I also hope you know few friends of yours who currently are struggling with debts due to the same reasons.

I also know a person who failed to repay borrowed money which he used to finance his wedding. And after the wedding he was arrested and jailed for three years. Good for him, he’s out of jail.

An important advice is, avoid extravagant spending on wedding, spare yourself and your loved ones’s from debts that come quicker in your marriage life than your first born child. Starting a family on debts has never been a good advice from marriage councilor. If you can save adequately for the day, other than borrow to finance a wedding. It is not wise to accumulate debts on things that you would as do without burdening yourself and your relatives.

Don’t kill the game! Share your views on the topic above in the comment section below.

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