Young, single, and in debt? Read this


Posted at Aug 16 2014 06:56 PM | Updated as of Aug 18 2014 07:23 PM

MANILA, Philippines – When you’re young, single and already in debt, the future can seem pretty dark and hopeless.

To get out of this predicament, financial adviser Salve Duplito said the first key step is accepting that you are in debt and in need of help.

Duplito said in Steve Rhode’s “stages of debt,” acceptance is fifth stage, right after bargaining and before resurrection.

“When you reached acceptance of your roles in life, it’s easier to seek help, receive counsel, and take necessary steps,” she said on ANC’s “On the Money.”

Acceptance doesn’t mean life will be easier, Duplito said, but doing away with the angst of dealing with debt can give clarity of thought.

After acceptance, the next step is to reconnect with creditors to show intent of settling the debt.

Duplito suggests contacting creditors to inform them that you have a plan to pay off all your obligations.

This can be done by preparing a letter for the rural bank and all other creditors before they even look for you.

“Much of the stress of dealing with debt comes from the breakdown in the communication process. Address that and you wipe out almost half of your problems,” Duplito said.

“Unfortunately, the default setting of most borrowers is to hide from their creditors, which elevates the stress level even more,” she added.

Developing a debt payment push plan can also make debt payments doable at an affordable pace.

To make a push plan, Duplito said you should list down all debts with the highest interest bearing ones first.

If you can allocate P10,000 a month for debt payment, divide that amount among the debts you have to pay.

“When you pay off debt number one, add the amount you were paying to debt number two so you accelerate the rate of payments without affecting your budget,” said Duplito.

She added that while paying down debt, get into the habit of saving by setting aside small amounts of money regularly for your future.

You can also seek help from family members so they can contribute to the debt payments.

“Paying debt builds integrity. The highest cost that you have to pay is not the interest rate—it is the impact on your name,” Duplito said.

“More than the value of your financial assets, it is respect for who you are that speaks of your true value.”