Debt's Biting Your Ass? Bite Back Harder!
Here are a few tips to survive
Calm down; you are not a bad person or a loser, and it is not the end of the world if you go tits up. Shit happens.
Source: @EckhartTolle
I have experience negotiating debt payment plans (Credit controlling and running my business), and I have also managed to fuck up my finances a few times.
It is easy just to let the invoices pile up and paralyze. This is the worst option. If you read this, you may not have opened your letters for a few weeks or planned anything on your finances. There is no magic pill to forget all that shit. Ask for help from anywhere. Here in Finland, we have pretty awesome “helplines,” (free) (links in the end). You can also post to social media anonymously.
Take responsibility. You fucked up (it is ok to fuck up). Take responsibility. The sooner you take responsibility, the better. Be extremely honest with yourself and debtors. We are humans; you are not a bad person or a loser.
The majority is struggling now, and it sucks. It would help if you changed your mindset. Why do you play these Ponzi games? Did you believe governments and big corporations help you? We had zero rates, and the majority leveraged to the teeth.
Debt always borrows from future consumption.
Make yourself immune to government idiocy. Yes, it will suck massively. I am sorry.
Live like a student.
Cope with stoicism and forget materialism. You might feel that you are rich when you hoard materials and debt. Yes, it sucks to cope with 2000y old, Hellenistic philosophy. If you have better ideas, please share. True wealth is knowledge, and nobody can take that away from you.
What truly matters to you? Usually, the most enjoyable things cost nothing. Spending time with family, walking in Forrest?
Start building an asset portfolio with assets that government idiocy cannot take away or affect that much. I don’t value my portfolio in dollars/euros or whatever. It does not matter. You can’t keep up. How many years can you live with your portfolio?
It is hard; everybody will think you are crazy. What other options do you have? You can’t “win” the game by working 100 hours a week. It is a Ponzi.
Zero debt, get out from the “system.” You are not a multibillionaire who benefits from leverage.
Educate yourself constantly. Knowledge is power.
Adopt a minimalist lifestyle.
Use the government idiocy as your competitive advantage; don’t spend your energy and time on how the game is “rigged”, and yell they are idiots.
Join a community. I want to find somebody to talk to. I have five readers at the moment… Let’s share and help each other!
1. Plan your finances
First say to yourself what you would be; and then do what you have to do." - Epictetus
What comes in and what goes out? Start planning now. This is the first step to taking responsibility. The debt and the stress won’t vanish by itself. You are in a hole, but we can climb out of it.
https://penno.fi/
This is free and in Finnish and English.
Get rid of all the extra stuff and tell your friends/family/colleagues that you are having a hard time. “I am fucking broke now. I can’t go”. I have used this throughout the whole summer of 2023, and you will be surprised that almost everybody is struggling at some level now. Would I have liked to spend my summer traveling around the world, visiting amusement parks, etc, with my family? Yes - But we biked around Helsinki and collected berries, which was also awesome!
I also struggle after COVID-19. Our household income has dropped over 50%, and on top of that, all the expenses have risen massively. I lived on autopilot before the pandemic, thinking everything was under control. But when COVID destroyed my business, I had to stop and face reality. If you keep piling on debt without a plan, a stop will come for you, too, and it might not be as kind.
Re-evaluate your lifestyle - What do you want? What are your needs? Cutting the wants out: Do we need four different streaming services? Do we need to order takeout three times a week? Do we need two cars? Do we need to travel?
2. Pick up the phone or send emails/chat with debt collectors.
"It's not what happens to you, but how you react to it that matters." - Epictetus
Be honest, just please be honest. The debt negotiators have heard it all. Be honest. You have now planned your finances and how much you can repay. Be it even 5 euros a month, that is usually enough. Companies don’t want your invoices to go to debt collectors or sue you, and it is also a considerable cost for companies. They also end up getting cents on the dollar.
Tips for negotiating best results:
Be extremely honest. “I’m having a hard time now”. Again 99% of the calls I got started about how their car broke down, or something unexpected happened. They don’t care about this. Be honest; they are also people who only want to help you pay your invoices; if you try to cheat them, you lose.
Be prepared to pay something immediately, even if it is just 10€. This shows that you are honest, have a plan, and acknowledge the problem. This way, you can negotiate small monthly payments to the debtor.
Be on the plan. If you need more time to pay, call the debtor and tell them you are having problems. (Again, be prepared to pay something; if you have just 5€, then be it; it is ten times better than just doing nothing…)
Be always proactive and try to get in contact before they approach you. They will try to reach you eventually. This shows that you are being serious about the issue and also get a better deal.
The aim is to reach a mutually beneficial agreement. Creditors are more willing to cooperate and assist when they receive some form of payment and when you maintain open and honest communication.
3. Prioritize your debt
"He who knows he has enough is rich." - Lao Tzu
Not all debts are created equal. Some might have higher interest rates, while others might have more severe consequences if unpaid.
Please make a list of all your debts and prioritize them. This will help you focus on paying off the most urgent ones first, reducing the overall financial burden over time. Or maybe try to combine the loans as one?
Don’t let future invoices slip to debt collectors. Contact and make payment plans.
4. Start building an emergency fund
He is richest who is content with the least, for content is the wealth of nature." - Socrates
Start with the possible amount, be it just the price of a cup of coffee. The point is to start - The point is to separate the needs and wants more clearly.
Safety net, shit happens—no need to take debt.
Limits impulse buys - Would I be better off if this money went to my small emergency fund? Long-term security suddenly feels better than some shitty gadget?
Automate this process.
Becomes a habit.
Start to visualize how life looks when you have this emergency fund.
You don’t use this for pleasure, vacation, or nonsense.
This will start to spark your interest to be one step ahead.
The point is to have control. Less shit to worry, less stress = More time for meaningful things.
Don’t invest this money or think investments are some emergency fund. Set up your emergency fund before starting the journey of investing. Six months of expenses is my minimum. Investments are essential for growth. First, we need stability.
5. The Philosophy of Financial Mindfulness: Beyond Money and Happiness
"Wealth consists not in having great possessions, but in having few wants." - Epictetus.
Many equate accumulating material possessions, like homes, cars, and gadgets, with success. But is this truly wealth? Does it genuinely bring happiness?
Stoic Simplicity: Drawing from Stoicism, understand that external wealth isn't a true reflection of personal value or happiness. Embrace a simpler lifestyle, focusing on needs over wants, and find contentment in the present.
Value: Reflect on the item's true value - Does it bring happiness?
Existential Value of Money: Instead of viewing money as a means to materialistic ends, see it as a tool that can help you achieve existential goals, such as freedom, time, and experiences that lead to self-realization.
Money is time: Instead of spending money, think of it as spending time - the hours, days, or even years it took to earn that money. This perspective can drastically change purchasing decisions.
It may sound like a lot of bullshit, but this approach has been transformative. By mastering the present, the future becomes more manageable.
Conclusion
You've made it to the end of this piece. But let's get real: reading this won't magically fix your finances or mindset. It's all about taking action.
So, what's it going to be? Continue being chained to the never-ending cycle of materialism and debt? Or take control, find genuine contentment, and redefine what wealth means to you?
Don't just let this be another article you skimmed through. Make a change. Start today. And if you've got stories, struggles, or insights of your own, drop them in the comments. Let's build a community that supports and uplifts each other. Because if not now, when?
Resources:
https://www.takuusaatio.fi/palvelut-ja-materiaalit/velkalinja-ja-kysy-rahasta-chat/
https://oikeus.fi/talousjavelkaneuvonta/fi/index.html
https://evl.fi/apua-ja-tukea/arjen-ongelmat/rahahuolet