People around the world are seriously indebted in so many ways, from their day-to-day bills, student loans, mortgages, personal loans, and many more. This debt is on a rise every year, leaving people in poverty. A lot of people go into debt without considering its consequences, and some of these debtors are a result of their expensive lifestyles.

Developing a debt strategy must involve establishing debt management, and understanding the cost and risk implications of difficult strategies. It is equally important to recognize that a strategy cannot be developed in isolation.

What is Debt?

Debt is anything owed by anyone, be it an individual, government, organization, or enterprise to another, it can be in monetary form, property, service, or other considerations.

Debt doesn’t generate on its own, some issues cause bills and, in most cases, they include poor financial management, an expensive lifestyle, too much burden to meet up, and others.


There are different types of debt but they are all categorized into two, which are good debts and bad debts.

Good debts

Good debts are debts taken by an individual, government, organization, or enterprise for a long term which is channeled to build wealth or income over the years.

Some examples of good debts

  • Taking loans for study: student loans help improve one’s potential for future earnings, taking out a loan to attain a degree is good debt because the individual will get a job that will help pay off the debt when they finish schooling since it has a long-term value.
  • Taking a loan to purchase a land or a house: However, homeowners hope that their homes /land will continue to grow and double value when the debt is to be paid off it must have even tripled the amount they collected as a loan.

Bad debt

These are loans/ finances that will not improve your wealth or add value in the future, therefore these types of loans are to be avoided.

Some examples of bad debts

  • Credit card debt: this is used to purchase things anywhere with interest to be paid off within a month in full.
  • Purchasing a car with a loan: car losses value and depreciates with time, if you purchase a brand-new car with a loan you need to pay back both interest and loan within a short period while still servicing the car, etc. meanwhile putting you in duress to pay off in a short term.


It is very important to understand the “how-to” manage and drastically reduce your debt rate. Living a debt-free life is something you should have at heart if you are in a debate with someone. There is nothing that is as good or interesting as living a debt-free life, it gives peace of mind, makes you sleep without worries, and makes you make more money without thinking of giving it to someone all in the name of serving a debt. Below are some tips on how to drastically reduce your bad debt rate.


This is when someone creates a budget that shows how income and expenses are been managed, and you must learn to stick with your budget.

Having a daily or monthly budget can help you manage or reduce your debt rate extremely. When you master the art of writing down what you want weekly or monthly, you will notice some things on your list you can do without, a lot of us have been victims of not budgeting before spending, so I am encouraging you today to try writing out your most important needs and see which of them you can do without for the next 6 months. This will reduce your bills drastically.


This offer comes with interest and if not cleared on time it will be added to your already existing debt. They make it appear as if it’s okay to go into debt but what they are not telling you is that you are adding your exiting bills which will really reduce your saving habit.


This helps by taking lunch to work and for fitting buying lunch from eateries, it helps save a little daily. Many people don’t realize that they send a lot when it comes to snacks, it may not look much but by the time you add up what you spend on snacks daily at the end of the month, you will realize that you have a whole lot to save if only you can forfeit spending money on snacks on a daily.


With the help of a financial professional you can be able to evaluate your current debt situation, determine your present and future needs, make up a budget and find a way to pay off the debt.


This has to do with how one free’s oneself from debt.

There are times when debt and the stress it causes can feel overwhelming, you just have to take a deep breath, for it can help you clear your mind, reduce anxiety and make you feel okay again.

Try as much as possible to contact your creditors as soon as you realize that you are having issues making ends meet, explain the situation to them, they might work out a modified payment plan that will make it easy for you to pay off your debt. You can also get a consolation loan from your financial institutions which will help you pay up the other existing debts so you can have just one payment to make.


Debts management helps individuals’ groups of corporate organizations invest in business ventures that yield greater profit in the future.

It is, therefore, imperative for an individual or group to be articulated the issue of debt and borrowing.

Debt is a good thing only if it is for investment purposes that would yield greater dividends for the future reinvestment and payment of the said debt.

Therefore, it is encouraging for one to borrow for an investment that will help build a better business that makes it easier to the repayment of such debt.