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  • Writer's pictureDoctor Money

You NEED to get out of BAD DEBT – Here is How!

Updated: Feb 19, 2022

Let’s start off with asking a question – what is BAD DEBT?

Bad debt is debt which is non-productive i.e. debts you have taken out to buy stuff that decreases in value e.g. cars, designer clothing etc.

On the other hands, GOOD Debts are debts taken out for investment purposes e.g. to buy an investment property, where the value of the property increases with time and the property can either be used by yourself or rented out, saving or making money in either case.

Another form of good debt is investment in education, this is a widely debated subject, however, investment in a good (and suitable) education can go a long way to enable you to increase your income and hence we consider debts taken out for educational purposes to be “good” debts.

In order to gradually switch from bad debts to good debts, and from poverty to affluence, you first need to get your financial health in order, in other words, you need to get rid of bad debts before you can start thinking of building up from that point onwards.

Here is how:

  1. Establish and understand how much you owe to various lenders (if more than one) e.g. credit cards, personal loans etc.

  2. Understand what your net monthly income is i.e. all incomes after tax and other cuts e.g. social security etc.

  3. Understand and list down what your basic fixed expenses of living are i.e. the basics which you cannot avoid e.g. rent, utility bills, medical insurance and a budget for food and medicines etc.

  4. List down your VARIABLE monthly expenses are i.e. expenses which you have full control over but would still need e.g. eating out, clothing, hairdresser visits etc.

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At this stage, you would probably be amazed at how big your variable expenses are!

Establish your expendable income, that is whatever money you have left after your basic fixed expenses have been allowed for.

Total Income – Basic Fixed Expenses = Expendable income.

This expendable income then needs to be carefully budgeted, in such a way that the majority of it, I would say 70% of it, shall go towards debt closure, leaving you with 30% of your previous expendable budget to manage with.

WARNING – This is a recipe that WORKS, but I am NOT saying that it’s going to be easy.

Getting out of bad debt will gradually enable you to breathe again, and feel

relieved of the immense emotional pressure that comes with having to keep up with an endless myriad of monthly payments.

Do you hate that feeling when you feel like you’re working for nothing and all your income seems to be siphoned into an endless back hole of debt?

Time to plan and get your money affairs back in good health.

Our Doctor Money Mobile Application will take care of the matter for you.

All you have to do download the app, and enter in your incomes and expenses, and the app will automatically plan your daily spending for you to ensure you never miss a bill and never over-spend again.

The app will help you CRUSH your debts, and set goals for future ambitions afterward.

What would it feel like if you had no debts, and were now planning to buy a new house, car, or holiday?

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This is very possible – start your planning now.

Download Doctor Money App.


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