Economics 101: Getting Out of Debt

Having a debt is not new here in Singapore. There are some Singaporeans who have debt or money problems. Getting out of debt is not easy and it can be very challenging. After getting out of debt, another challenge arises – staying out of debt. It is important that you know how to manage your resources.


If you are reading this, chances are you already amassed big debts. Do not lose hope because there are many things that you can still do. Do not worry, you can redeem yourself. It only takes discipline. Here are some tips that you can consider to get out of debt:

  • Stop increasing debt: This is pretty obvious. When you decide to step away from life of debts, the first thing that you should do is stop increasing it. You have to know when to stop and be serious about it. You can start with your credit cards. It will not help you so it is better to cut them. If you do not want to cut it, at least have the discipline to keep it and only use it for emergency purposes.
  • Record everything: You should keep track of your spending so you will know where it went. It is crucial that you record your spending. No matter how small, you have to write your spending. When it is time to cost cut, you will have an idea which should be eliminated.


  • Categorize: Not all people know this but you categorizing your spending is effective. When you record your spending, do not forget to label or categorize it. For example, you can group them into “must have’s” (refers to rent, food, utilities, etc.) and “should have’s” (clothes, gym membership, etc.).
  • Make a budget: Now that you record everything and categorize it, the next step is to make a budget. Making a budget is easy because you have an idea of things to prioritize. If you are determined to cost cut, you can start right away.
  • Figure how much you owe: After making a budget, you will have an idea how much to pay. You need to know first how much you owe and the terms.
  • Start paying: You can now start paying. How will you know which one to get started? You have to choose or prioritize those that have exceeding interest rates or past due debts.
  • Repeat: For the coming months, you can consider the steps mentioned above repeatedly. The good thing about this is that it gets easier as time goes by so do not worry.


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