Tip: It has nothing to do with money.
Remind yourself of the time when you borrowed 100 bucks from your neighbour and since it’s your neighbour, you got to repay them. But here’s the twist — your neighbour moved away to another township, and you are now feeling burdened with the debt. Even if you do not pay them back, it’s not an issue though.
But if you do this with a lending company, it comes out as bad debt.
Bad debt is the previously receivable amount that cannot be now recovered from the person who was supposed to repay.
We recommend these 5 tips to avoid being in the debt swamp -
1. Plan your finances and keep saving (financial planning).
2. If you are the one lending the money, ask for it. If it’s the other way round, return it in the first instance possible.
3. FACE THE MUSIC. Do not ghost them. Own up.
4. If you are under many debts, prioritise the one with high interest, then create a hierarchy!
5. Keep your motto — “I’ll pay it, it’s my debt.”
We know that it is human tendency to avoid such things and live out of them. But try hard to dig yourself out of it, or you’d be declared ineligible for further loans.
Author: Rajani Rajagopal