Being in debt is normal in the Philippines. As per Philstar, the 2015 National Baseline Survey on Financial Inclusion from Bangko Sentral ng Pilipinas stated that 70% of the Filipinos are living paycheck to paycheck. People are accumulating too much debt they can barely bear.
But as for me and my household, we declared at the start of the year 2017 that we will be debt free in Jesus’ Name. In fact, I recently posted in my social media account that we are serious of getting out of debt. Everyone of us has different reasons for eliminating debt. For us, the main reason is our children. We don’t want them to inherit our debts when we are gone or inherit the habit of being buried in debt because they will think that to acquire debt is a normal thing to do in order to survive.
Debt can take away a person’s peace of mind and the joy that comes with the blessings of work because most of the income is going straight to the debt payment. We want them to see that it is ok to live like no one else today so that later we can enjoy the blessings of God like no one else as well. So I will be starting this blog about our getting out of debt journey to inspire and encourage others to make that decision of breaking the bondage of debt personally or for their family.
Prior to the decision of getting out of debt in three years time, God spoke in my daily devotion, Galatians 5:1 ” It is for freedom that Christ has set us free. Stand firm, then, and do not let yourselves be burdened again by a yoke of slavery.” I have been thinking about this since then. I know God loves me and my family. He will help us to be debt free.
Our Getting Out of Debt Journey (Week 24 of 2017)
At the start of the year 2017 we had a total of P 2, 352,016.97 debt. We acquired this amount of debt from our car, condo unit, credit cards , bad business decisions and bad financial decisions. We are working on this giant for 6 months now and we are down to P 1,887,527.32 as of today. Praise God our car is completely paid off! I know we still have a large area to cover but we are so happy and excited with our progress.
What We Did in the Last 6 Months
- Acknowledge debt– They say that you cannot change something unless you acknowledge it. We are aware of the giant that we are facing but we also know that we have a bigger God who loves us. In Him, everything is possible. We can slay our giant debt.
- Implement a budget -For each month, we make a different budget. It serves as our plan on how to deal with our finances each month. By doing this, we give every peso a name and we tell them exactly where to go and not the other way around. We are also careful in following our budget all the time. There are times that we go over our budget and sometimes under our budget. We are patient with ourselves and learn from our mistakes. In setting up a budget, it is important that both spouses ( if married) are on the same page. The Zero-Based Budgeting by Dave Ramsey works well for our budget.
- Create a meal plan and grocery list – We do our groceries every week. Prior to our grocery day, I make a meal plan that contains all of the menus that we will have for the week. From the meal plan, I list all the things needed for all the menus in our grocery list. By the way, I have blogged about how I earn extra cash on our groceries so if you are interested to know how I did it, just click the link to How I Earned P 15,000 on Groceries.
- Live below our means – We always live below our means even if our income increases. We usually use the excess for paying our debts.
- Minimize dining out – We did not totally removed dining out from our budget since there are times that we do not have the choice but to dine out however we minimize it by cooking delicious and sumptuous meal at home. For example, we usually incur P 2500 in Dampa every time my family of 6 go and eat there. So instead, I’ll buy P 450 worth of seafood and cook them at home to satisfy my family’s cravings. So I’ll be saving P 2000 for doing this and I also enhance my cooking skill.
6. Track expenses – When we track our expenses, we know exactly where our money went and it keeps us on track of our budget.
7. Use cash more often – If we use cash, we have more control over our expenses compared with using a credit card.
8. Increase income – We thought of different ways on how to increase our income to cover up our expenses and pay our debts on time. Besides from my hubby’s salary, we also earn cash from my professional fee as a technical consultant, beauty consultant, course developer and makeup artist. We also earn profit from our skincare and cosmetics home based business which I can get to do wherever I go, online and offline.
9. Stop Borrowing – God is our source of everything and not the banks or other people who loan us money. He loves us and He will provide for us. Stop borrowing and start trusting that God will provide. “Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they?” – Matthew 6:26
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