“The only man who sticks closer to you in adversity than a friend is a creditor.” – Author Unknown

In Part 1 of this series, I shared some background on how I became deeply indebted.

I zeroed in on the issue of greed in Part 2, and in Part 3, I focused on the seven mistakes one needs to avoid while resolving the issue of indebtedness. There is a freedom that comes with being debt-free that is simply indescribable.

Henry Wadsworth Longfellow once said, “He looks the whole world in the face, for he owes not any man.” 

When you are debt-free, you won’t be afraid of running into your creditors. You won’t be scared of opening your door when you hear a knock. You won’t constantly watch your back while driving. You won’t get panic attacks when someone calls your name on the road. If you experience any of these signs, you may be a debtor.

Cutting unnecessary expenses isn’t suffering—it’s strategy. Every small sacrifice today paves the way for a debt-free tomorrow. Share on X

Being in debt causes mental, physical, emotional, and marital stress. My experience was during a time when it was incredibly easy to get into debt. Financial institutions were willing to lend to individuals. The Naira credit card was new at that time, and people eagerly adopted it. 

There were payday loans and salary advances. Consumer loans were readily available for the purchase of household appliances. Some stores allowed you to walk away with gadgets if you provided post-dated cheques. If you were a salary earner, many organizations were eager to throw money at you.

Easy credit oftentimes gives birth to uneasy debt. Henry Wheeler Shaw said, “Debt is like any other trap, easy enough to get into but hard enough to get out of.” Well, I got out. And I believe everyone who desires to live a debt-free life can do the same. 

With debt hanging over my head like the sword of Damocles, I implemented the following strategies, and within two years, I was free.

1. Be Honest About Your Situation and Take Stock

You may lie to others and get away with it, but you’re in real trouble if you lie to yourself. Many people lie to themselves. They downplay the magnitude of their financial problems or rationalize them.

The first step is to come clean. Admit that you’re in trouble and need help. Take stock of your current debts. Clearly write them down without ambiguity. To whom do you owe money, and how much? What is the timeline for repayment?

Look closely at your finances. 

• How much do you make? 
• How much do you spend? 
• What do you spend money on? 
• How much are you saving? 
• Do you have any investments? 

The moment you admit to yourself that there is a problem, the journey to recovery begins.

2. Have an Accountability Partner

In my case, it was my wife. She knew I was in trouble and needed help. Her support was critical in resolving the issue. Get someone who will hold you accountable and ensure you follow through with your repayment plans.

You have to decide to be open with this person. Sometimes, we are in such deep trouble that we can’t come out on our own—it may take another person to pull us out of the pit. Your accountability partner must be someone you hold in high esteem and whose words you respect. You must submit yourself to this person as you walk through this journey.

3. Get a Repayment Plan

How will you repay your existing debt? You may need to create a budget to control your spending and free up some cash flow for debt servicing. 

• Can you generate additional income?
• Can you cut down some expenses? 
• Are there items you can sell to raise cash? 
• Do you have two cars and can sell one? 
• A plot of land? 
• Jewelry? 
• Stocks?
• Any asset whose sale can immediately reduce your obligations?

There’s no point in having multiple cars and other ‘assets’ when you’re drowning in debt. Once you resolve your indebtedness, you can regain these luxuries. Your plan should show how much you can commit to servicing your debt periodically. It should also outline which debts you plan to tackle first, prioritizing them strategically. I suggest settling the most expensive debt first.

4. Negotiate With Your Creditor

Don’t avoid or run from your creditors. Meet them and explain your true situation. Show a willingness to repay, and many creditors will give you the benefit of the doubt. Be honest with your plan and negotiate for the best terms that will be convenient.

Sometimes, you need to request a restructuring of your debt. You may need to ask for a longer period to repay. That way, the installment payment is lower, but the interest (if it’s a loan) paid will be higher in the long run.

You may also request interest waivers so you can focus on repaying the principal. In this case, be ready to make a goodwill payment to demonstrate your seriousness. You may be fortunate, and some creditors might forgive part of your debt. However, don’t expect or demand this.

I had to face my creditors and negotiate various repayment plans. In one instance, I requested an 18-month repayment period instead of 12 months.

5. Cut Off Extra Fat

You can’t be in debt and still go on vacation. That’s the height of irresponsibility. Cut off unnecessary expenses. Paying off debts will involve you living simply and getting rid of any seeming extravagance. Avoid ‘aso-ebi’ and other unnecessary spending. Cost discipline is key.

If your revenue is dwindling, reduce your expenses. Use a cab instead of driving. Share an office instead of renting one alone. Eat more at home rather than buying lunch daily. Use power-saving devices to reduce electricity bills. Buy in bulk to save money. Take advantage of loyalty vouchers. 

If you must go on holiday, consider local destinations instead of international trips. Cancel TV subscriptions or opt for low-priced plans. Cancel Netflix. Be mindful of your internet data usage—switch off when not in use.

Quit smoking or drinking. If you drink a bottle of beer daily at ₦500 per bottle and stop, you would save ₦180,000 in a year. The truth is, small savings from disciplined cost-cutting can add up to something significant over time.

Whatever excess fat you free up should go toward repayment.

There’s no point in having multiple cars and ‘assets’ when you’re drowning in debt. Let go of luxuries and free up funds to repay your debt. Share on X

6. Monetize Your Skills and Earn Extra Income

It’s tough to repay debt from just one stream of income. It’s much easier with multiple streams.

While I will not encourage anyone to defer repayment of debt because you want to start a side hustle or business, I believe it’s advisable to look inward and consider the skills you have that can be easily monetized for you to earn extra income.

• Can you write? Consider freelance writing. 
• Do you have good communication skills? Try emceeing events. 
• Are you good at photography? Take professional photos instead of just selfies. 
• Can you cook? Prepare homemade meals and sell them through social media.

I once advised a financially struggling person to look inward. He owned his home but was broke. After counseling, I told him he had what he could use to jumpstart his finances. I suggested he turn the back of his house into a football viewing center. He already had DSTV, a big-screen TV, and a refrigerator. He could make money from selling drinks to viewers in addition to the fee they would pay to watch the matches.

Look for a side hustle that leverages your skills and doesn’t require a huge capital outlay. The extra income will help you increase your repayments and clear your outstanding debts.

These are the steps I took. I remained focused and consistent with the strategies. In two years, I paid off all my debts. You can do the same.

Psalm 37:21 (ESV) – “The wicked borrows but does not pay back, but the righteous is generous and gives.”