INTRODUCTION

As the year progress, many are careful over their financial decisions and risks involved so that they will be financial secure and enjoy its luxuries. One financial aspect of our life that needs more careful considerations and management is debt crisis. Everyone can be a victim of financial strains or negative effects of debt when managed improperly.

Debts are powerful financial tool whose effects can be positive and negative depending on our management and skills. As a tools, many entrepreneurs, business owners and even our nations are in debts for seeking funds which can have positive impacts and develop their economy.

In poor debt management, the interest will accumulated with its capital to become a financial strains and problem that affect the sustainability of business ventures. It's crisis can have a long-term impact on the enterprises. Many companies have been bankrupted and in perpetual debt without as easy way out!

Proper Debt Management Strategies

Proper Debt management is very important to cushions the negative effect of being indebted, sustain our business and achieve long-term financial goals. Here are some of valid skills and strategies that can help in debt management.

Create Budget.

Budget is a financial plan that outline the various income streams and the expenditures. A well developed budget consists on debt obligations and financial process that will stabilize the financial status of the entity.

With great financial plan, the financial situation is well understood and proper strategies will be adopted to achieve financial growth and stability.

High interest debt will be prioritized in the budget. Such debts have serious negative effect. For instance, in the accumulated interests from the African countries' debt and poor development process are experienced. But with this plan, such financial strains from the incurring interests are curbed and accelerate the repayment process.

Debt Negotiations.

As management strategies, engaging meaningful with the creditors on the best repayment process so as to curb the debt and it's effects. During the Obasanjo Civil rule, Nigerian government happily repaid the debt from the Paris club. It was successfully negotiated by then finance minister and current world Trade Organization president, Mrs Ngozi Okonjo-Iwela. Nigeria became Debt-free and saved a lot of money from the crude sales because of the wonderful debt negotiations and repayment.

Consolidation

In this strategy, the debtor will simplify the repayment process and reduce the interest cost by compiling all the debt as a single loan.

As a single loan, the debtor will be able to consider and manage it properly. For instance, despite being various loans and debts from many sources including foreign and local means, Nigerian government structured a dedicated department and office known as debt management offices with financial experts and teams that manage and service the debts. There's speedy report from the office including the status, repayment and nature of those debts.

Importance of Proper Debt management.

Numerous financial benefits being derived from proper debt management strategies. Such importance includes.

Financial Stability.

Financial stability are ensured which will sustain the financial conditions and promote growth. Effective debt management contribute to the proper financial process and security.

Good financial decisions are reached with minimal risks and proper view of debt that will ensure growth and minimize the negative impact of debt. Good budgets with determination and focus will ensure financial prosperity and stability.

Assets Acquisition and ownership.

With proper planning, debts and it's crisis are managed effectively thereby improving the financial conditions of the entity. Such improvements will include possession of assets like landed property etc which are not possible when one is indebted.

Loans can be used as capital for acquiring assets which will assist the business and its interests to grow and sustainable. They act as the framework on which other activities will thrives so that the debt will be repaid in time. Such assets are very important to encourage growth and prosperity.

Emotional stability

"Debtors are slave to the lenders" that's a powerful sayings from Bible which indicate the emotional condition of becoming a debtors. It can cause depression, pain and suicide as many have cut off their lives prematurely due to debts.

Debts causes financial stress which have untold sufferings and anxieties which are associated with mental illness. Also, When debts are cleared, there will be peace of mind and happiness which can promote healthy living.

Finally

Proper Debt management ensures financial stability and security as there is absolute control of the finances, making good decisions and assets acquisition. It is a cornerstone for financial and mental well-being that worth celebrating when managed properly.