Debt Management
Finance

Managing Your Debt: How To Keep The Rising Tide At Bay

While it is not by any means essential, living with a certain amount of debt is considered to be more or less normal these days. It’s expected that you’ll have some credit card balance and maybe an outstanding loan or two. Whether for personal or business reasons, debt is not as much of a dirty word as it used to be. 

With that said, any time you hear of a business failing, the reason for its collapse will almost certainly be debt. There is a balance to be achieved in business when it comes to borrowing. While some debt is expected, you always need to be aware of when you’re moving from simple, manageable debt into a risky area, where the waves of unmanaged debt can consume your business whole. Finding that balance is a matter of awareness.

How much debt do you need to carry?

The primary impact of a debt burden is that it cuts into the money you earn. You have repayments each month and, the higher they are, the less encouraging your debt to income ratio is going to look. Lenders are going to look with concern on any potential borrower whose liabilities are more than a third of their income. This is where it can be useful to know more about the Debt to Success System – DTSS Words of Art & Legalese can help you understand which of your owings can be written off and how your burden can be remolded in your favor. Your debt repayments should never prevent you from making necessary investments.

Debt Management


What is a good reason to take on debt?

Anyone with an awareness of financial matters will know that there is good debt and bad debt. While this distinction is often governed by such issues as interest rates and repayment terms, bad debt can also simply be a debt you didn’t need to take on. If you are going to borrow, make sure you are doing it for reasons that add value to the business. Borrowing at a higher rate to pay off existing debt is just swapping one burden for a worse one. Ask existing creditors to restructure your debts rather than making matters worse.

What if the tide rises too high?

It has become more or less impossible to run a business without some measure of debt, as the principle of speculating to accumulate has become the received wisdom. While debt allows you to make moves that most businesses cannot make without borrowing, it also means you have to make a return on your investment. If that return starts to fall short of where it needs to be, you’ll face a situation where your debt could sink you. At this stage, you will need to negotiate with creditors and see how your repayments can be rethought. In the end, it is better for them to receive a smaller amount for longer, than nothing at all in perpetuity should you become insolvent.

Being smart about debt is essential. You might need to do some borrowing, and that’s true of nearly all businesses. However, always make sure that you’re borrowing with your eyes fully open, so you don’t take unnecessary risks.

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11 Comments

  1. Lyka Mitra says:

    Kaya kung mangungutang po talaga tayo siguraduhin nating kaya at sa tama po natin gagamitin lara hindi po tayo mababaon sa utang.. gamitin sa negosyo para lumago.. 🖒

  2. MA D EL says:

    Dapat po talaga bago mangutang Pag isipan po munang maigi kung maibabalik mo ba yung pampuhunan mo o kikita ka ng sa ganun hindi mapunta sa wala ang lahat.

  3. sosingerica says:

    Lahat nman po siguro mamu may utang po. Sabi nga po nila normal Lang daw po Yun at hindi ka po Tao kung wala kang utang. Pero dapat po na maging responsible din po tayo sa ating mga utang at pinagkkautangan dahil. Matuto po tayong magbayad. At kung mangungutang man po dpat gamitin sa mabuti or sa importante.

  4. DavidezSanch nietteAntoAntonietteAnyo says:

    Ako mamu ayaw ko ng may utang ako kasi nakakastress ang may utang imbes na pang kain nyo sa araw araw ang iniisip mo ang pumapasok sa utak mo eeh kung san ka hahagilap ng pambayad utang kaya mas ok na walang utamg kesa meron

  5. ellaineparame says:

    Sa awa ng Diyos wala naman kaming utang mamu,more on save save talaga kmi ngayun para may madukot emergency..Si hubby lng nagwowork samin at may isa kaming anak..Nasa Mag asawa lng kasi yun on how they handle their income..ako matipid talaga ako..pati si hubby matipid din..Pero may monthly kaming Rental sa bahay,tubig at kuryent .yun lang bills namin..This is worth to share talaga. Tnx for this mamu..

    1. Mahirap talaga may utang at mabaon sa utang kaya maganda yan ginagawa mo 🙂

      1. Donna Gonzales says:

        Napakahirap talaga ang magkaroon ng utang lalo na kung di ka marunong maghawak ng pera. Kaya kung sakali na magkaroon o kumita ng pera magtabi para sa pambayad utang at para sa ipon para hindi na kelangan mangutang pa ulit

  6. Sad but true. Wala nmn sgurong taong may utang sa panahon ngayun. Hindi PO talaga naiiwasan ang pangungutang, pero maging WAIS PO sa pag gamut ng perang nakuha.

  7. Roxanne Aricaya says:

    Sa ngayon mamu may loan ako pero awa ng diyos nakakaraos din naman..nakakapaghulog pa ng savings.. mahirap talaga ang may utang pero kinailangan kasi talaga kaya nakaloan 😅

  8. Lovell Compoc says:

    I believe sa good debt and bad debt. I must say na borrowing is risky kung ku mapupuntahan sa dapat patunguhan pero kung business beneficial to once maayos mahandle malaki income then may chance maka pay sa debt. We dont opt then getting cc’s not because we are not wise spender and good payer, nakakatakot lang to spend using it. Its our way of controlling to spend din. Very helpful post nito Mamu.

  9. Jessa Casuncad says:

    Nung March nagsimula ang quarantine. Marami ang nawalan ng trabaho so madaming natambak na bayarin. So pinatupad na hindi muna kinakailangang magbyad ng bills ng kuryente at tubig. That time may di naman kami nawalan ng work. So kahit di kelangan magbayad ng bills that time ay binayaran parin namin monthly kasi ayaw namin ng may utang. Kung kaya naman po kasi, di na kelangan mangutang pa. Kung kinakailangan po talaga at di maiwasan ang mangutang ay wag patagalin ang utang. Like yung utang na may interest, at pag dika nkabayad on time may penalty pa bukod sa interest. Jan ka hihilain pababa kung di mo maagapan.

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