DEBT MANAGEMENT

FOLLOWING THE SCRIPT OF LIFE

If we track the life of average educated people, the financial script
often goes like this:

The child goes to school, graduates, finds a job and soon has
some money to spend. The young adult now can afford to rent an
apartment, buy a TV set, new clothes, some furniture and of
course a car. And now the bills begin to come in.

One day, the adult meets someone special, sparks fly; they fall in
love and get married. For a while, life is blissful because two can
live cheaply as one. They now have two incomes, only one rent
to pay, and they can afford to set a few pesos aside to buy the
dream of all young couples, their own home.

They find their dream home, pull the money from savings & use it
for a down payment on the house, & they have a housing loan.
Because they have a new house, they need new furnishings, so
they find a furniture store that advertises those magic words,
No money down, easy instalment payments.
Life is wonderful, and they throw a party to have all their friends over
to see their new house, new car, new furniture and new appliances.
They are now deeply in debt for the rest of their lives. Then, the
first child arrives.

The average, well educated, hard working couple, after dropping the
child off at nursery school, must now put their nose to the grindstone
& go to work. They become trapped by the need for job security
simply because, on average, they are less than three months away
from financial bankruptcy.

From these people, you often hear I cant afford to quit. I have bills
to pay. Or a modification from a song from Snow White & the Seven
Dwarfs, I owe, I owe, so its off to work I go.
REALITIES OF INDEBTEDNESS

It can ruin your financial dreams faster.

can cost up to 100% more than if cash were
used.
No peace of mind.

Control your debt, or else debt will control you!

STRATEGIES TO GET OUT OF DEBT

Know your Enemy - DEBT

TWO (2) TYPES OF INTEREST RATES:

1. Nominal or add-on rate

interestrate is based on the original loan amount
you pay the same amount of interest every month
despite having paid up part of principal.
2. Diminishing or Effective rate
interest
rate is computed against diminishing
balance.
STRATEGIES TO GET OUT OF DEBT
Prioritize payment on higher interest or lowest
amount of loans/debt.
It wont be easy, but with a consistent, focused
strategy, you can find your way out of debt.
Start your debt consolidation and elimination
program now.
See your creditors regularly.
Assure them that you will not run away from your
obligations.
Negotiate to reduce interest.
3 STEPS TO GET OUT OF DEBT

1. Consolidate
DEBT CONSOLIDATION
Kind of Loan Company or Amount Interest
Person

Housing Loan
Car Loan
Credit Card
Salary Loan
Appliance Loan
Bank Loan
Coop Loan
P.O.
SSS/GSIS Loan
Personal Loan
Others:
_______________
_______________
_______________
TOTAL
3 STEPS TO GET OUT OF DEBT

2. Eliminate
CONTROL YOUR DEBT OR DEBT WILL CONTROL YOU.

A typical debt & credit card purchase can cost up to 100% more than if you pay cash

Find a loan that is lower in interest

Amount Annual to pay off the original loan
Interest 100K @ 20% per annum = 20K
1 120% Loan Interest 60,000
Interest
2 100K 60% Balance paid Allocation
100,000 20% 20,000 40,000
3 30%
60,000 20% 12,000 48,000
4 24% 12,000 20% 2,400 57,600

5 20% 0 +45,600 60,000

imguae.support@gmail.com
 Manage your others loans before applying for a
housing loan.
Avail of a lower interest debt and pay the higher
interest debt.
If your income is smaller than your expenses,
work to make more money instead of
borrowing.
3 STEPS TO GET OUT OF DEBT

3. Celebrate. Repeat
It is a rule of our financial & economic life that
interest is to be paid on borrowed money. Once
in debt, interest is your companion every
minute of day & night; you cannot shun it or slip
away from it; you cannot dismiss it; it yields
neither to entreaties, demands, or orders; &
whenever you get in its way, or cross its course,
or fail to meet its demands -- IT CRUSHES YOU!
---- Ruben Clark