One of the most difficult times is when you are broke (when you don’t have money). Your friends, relatives, and colleagues distance themselves from you. That’s the nature of life. How should you handle brokenness?
Never try to resolve brokenness by borrowing. Borrowing money to solve brokenness is like sending yourself into a long-term prison. You will never live your life in peace because you will end up borrowing from Loveness to Peter, from Daniel to Rodney until you can’t borrow any more.
Once you find yourself in a situation where you don’t have money or in a negative, you need to think smart and reduce your cost of leaving as much as you can. I call this a dry season where you live on your lowest minimum and use means of saving that are not comfortable. Where you need to travel, if possible, walk, have one meal a day, avoid social gatherings, and spend money.
Some time ago, a certain man called Terence approached me with a sad story. Terence was in debt. It only started when he borrowed money to buy a car and then struggled to pay back the money.
He was earning $700 per month, but at this time, it was no longer sufficient to sustain his normal upkeeping. When the lender came harder on him for repayment of the loan, which was accruing interest every month. He went and got another loan elsewhere to pay off his current loan, so this became a system. To make matters worse, he was now borrowing from anyone. His friends, relatives, and colleagues were to a point when it was out of hand. He was owing a number of people, and he couldn’t manage anymore. He sold his car, but the money was not even enough to cover his debts.
He came to me very stressed and shared his story with me. I listened carefully and saw that he was really in a bad situation.
I said to him, “Terence, I want you to work this out on your own because you have a source of income that you have.” First, you must communicate with the people you owe and ask for a reasonable monthly figure for a repayment plan. We worked on a proposal that left him with a small portion of his salary for upkeeping.
I helped him design a proposal letter to his creditors. Asking for a scheduled payment plan that stretches for about six months and some three months.
He was afraid to submit the letters because he felt like he had violated their agreement. I gave him courage until he submitted it.
Now, I helped him step by step to make sure that he sticks to the plan. Pay his debts on time as agreed. Not borrowing any money from anyone. Live a very simple life. He had to do this for almost eight months. I was monitoring him more often.
By the end of 8 months, we reviewed, and he had paid off all his debts. He was a free man. Now his $700 salary was enough for him to do the things that he liked. I told him never to borrow again, especially from this small microfinance that puts a high-interest rate and stiff conditions that once you borrow from them, you will never breathe.
I told him to always save if he wanted to buy something. You save first, and when the money is enough, you purchase what you want. Not the other way around. You can’t spend the money that you have not received.
The day you start spending the money that you have not yet received is the day you say goodbye to your financial freedom.
There is no other formula; you work, you save, you buy.
Not that you buy, you work, you pay. This is a dangerous formula. Don’t do it.
The Herdboy C.E.O, Dr
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