“Don’t let money change you.”
One thing I always say to people who ask me for financial advice.

I mean, I am no financial guru nor a money making expert, however, I’d like to believe that I know how to manage my finances, one way or another. Haha!

Through the years, I made sure that I have enough money for investments, my savings and life’s little luxuries, enough for me to say that I can live comfortably with what I earn. And within my means, if I may add.

The latter actually is sacred to me; I don’t really splurge on stuff I can’t afford or would have troubles paying off.

That’s just me. Simply because I don’t want to fall into the trap of having so many debts to pay that may cause sleepless nights due to unwanted stress, anxieties and worries.

More than that, I also have seen a lot of relationships fall apart because of money matters. I mean, we’re talking about like years of friendship, families torn apart and romantic relationships turned sour because of unpaid debts.

Yeah, someone had to say that. And I guess being one of those who have experienced that, I can also relate fully to that ugly feeling when money takes control of even the most beautiful relationships, or so I (we) thought.

So since I have been asked time and again by people who are becoming highly anxious about their debts on how to deal with it, I decided to share my take on it.

Mind you, I do all these in the rare occasions I make a loan for an important investment e.g. a new property for AirBnB (there’s what you call good debt guys, none the less, it should be taken seriously as well) so that I get to maintain a good relationship with whomever I am getting money from e.g. super close friend (emphasis on super), bank loan etc. So yeah, it’s possible to make loans work for you without sacrificing your relationships.

Here are the 5 things you should remember:

  1. Face your debt

The impulse of most people is to run away from their debts. Mind you though: you cannot resolve what you don’t face. So accept the fact that you have a debt to pay and face it responsibly. By this we mean not denying yourself to live in the now nor denying the existence of the debt, while you do away with the anxieties you are attaching to the future. When you start facing your “problem”, solutions will come to surface. You were brave enough to make that loan, so be braver to take responsibility for it.

2. Honor your word

Was there a contract signed? What were the agreements? Ensure that you are on the same page and never assume anything to avoid any misinterpretations. Remember, the moment that you affix your signature on something is the moment you put your credibility and integrity on the line. Never compromise them. Make sure to remember important dates and give payments that are due during that time. And yes, put everything into writing always.

3. Be honest

Ok, admittedly there might be some unforeseen events that may cause you to have problems paying up. Tell that upfront ahead of time. Approach with humility. Discuss possible solutions. Never just remain silent and wait for things to fix themselves, because more often than not, they won’t. Don’t give false hopes or pretend that everything is still according to planned. Remember, lying may get you off the hook initially, but will definitely put you in hot water in the long run. Honesty goes a long way. Never underestimate the compassion of people. But don’t ever abuse them too.

4. Practice empathy towards the other person

While it’s stressful to have debts, consider also that another person or party is involved. It’s not just about you. It’s also stressful for the person/party that you owe money to. So ask yourself this: how does the other person feel? what can help him/her understand better the situation I am caught in? What compromise can I propose for consideration? Remember, relationships will always be more important than money so be sensitive enough to acknowledge the needs and wants of the other person involved, whether a friend, family, loved one or business or work contacts. Initiate updates, assure them every now and then and commit to agreed upon deadlines. Don’t ever ignore them, make broken promises or open ended deadlines…I am beyond sure you don’t want that to happen to you as well and the other party/person does not deserve to be treated that way especially if they have done their part and have given you much consideration already.

5. Create solid plans

This can make or break any relationship. Seriously, if you don’t have any solid plans (and yes, that’s intentionally with an s!), then you’re putting yourself and your relationship in danger. Have plan A, plan b, or even a plan c to ensure that all bases are covered and you don’t go back to the other person/party with more negative news just because you only relied on one solution. While crafting many plans would be nice, committing to them is more crucial. Do away with lip service. Set exact deadlines. Seek help if needed. Walk the talk. Take the lead. That’s part of you becoming your own #bestmeever as you take responsibility for your self, debts and actions .

So let me end this blog post by reminding everyone that

your debts should never define you nor your relationships.
Your response towards them, will.

Take it from there.

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