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Are You Stuck in a Debt Cycle? Here Are 6 Tips to Help You Break Away
Are You Stuck in a Debt Cycle? Here Are 6 Tips to Help You Break Away
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Are You Stuck in a Debt Cycle? Here Are 6 Tips to Help You Break Away

Doris Kendi
November 12, 2021

It’s like a cycle of death—a never-ending loop. You get a quick loan to sort out an urgent matter (and sometimes a not-so-urgent matter), then as soon as you get some money, you prioritize the debt and pay it off. 

However, after you have settled the debt, there is not enough left to cover your bills or buy new stock for your business. So the only solution is to get a loan again to cover the deficit. This happens over and over, and each time, the deficit gets bigger and bigger, and so does the debt —like a perpetual cycle. 

This is especially very familiar with mobile loans. Most mobile loan companies thrive on keeping you captive. And you will bear me witness that this is the worst jail to be in, especially the harsh economic times we have in the country. 

But it is tiring, and it would be best if you could stop. But how do you escape the vicious cycle? This article is to give tips that can potentially help you break away from the cycle. 

List down all your debts in a place you will see every day

On a battlefield, the better you know your enemy, the better your chances of winning. Understanding what you are dealing with always gives you an upper hand. The same applies to your debts. 

They are now the enemy, and you are getting your immunization ready for battle. So it is no longer enough just to make a mental note of what and who you owe. Do better. Sit down and make a precise analysis of your debts. Make a detailed list of; 

  • the creditors, 
  • The total amount of the debt, 
  • monthly payment, 
  • interest rate, 
  • and due date.

The same way a vision board works as a mental stimulant for your goals, this list will work as a mental stimulant for your debt freedom. So place it in a place where you will see it every day. 

Also, remember that on this journey, no debt is too small. So list everything. From your high-interest loan, you have with the local bank to the Ksh. 5000 you loaned from a friend. Add all of them to the list. 

Analyze your income

Now that you have a clear view of the debts you are dealing with, it is time to check your immunization. How much disposable income do you have coming in each month? 

If you are in formal employment, list down your salary, allowances, and any other income you have coming in each month. Also, if you have a side business, make precise monthly income projections and include this in your calculations. 

Having a clear view of your income will allow you to make better budgets and make a suitable debt repayment plan. 

Create a concrete and practical repayment plan 

Now, for this battle, you need to have an attack strategy. But keep in mind that the main goal is to avoid spiraling and accumulating more debt. As such, the primary goal is to try to use what is left after you have cleared your bills to pay off the existing debts without accumulating more.

You can’t just wing it and expect to win. So armed with your two lists above, sit down and draw a clear plan. It should be something like this;

  • Decide which debts to pay off first. Sit down with your list of debts and decide which debts need to be paid off first. It could be the debts with the highest interest rate or the ones which are already overdue. It totally depends on your situation. 
  • Use what you have available at hand to settle the most urgent debts. Do you have savings or something you can sell and use the money to pay a part of your debts? Sometimes, it is wise to use your savings to settle a debt to avoid accruing significant interest, especially on large loan balances.
  • Try debt consolidation. Depending on your current income status, check all the options available to you. Debt consolidation can be a great option if your current income can not sustain your current monthly debt repayments.

Revisit your sending habits and live within your means

While still actively working on getting yourself out of this hole, it is also essential to recognize the root cause of the problem. How did you get into debt in the first place? 

What was the money spent on? Did you take a loan to start a side hustle or buy an asset? Was the cash just spent to cover an income shortage and cover your monthly bills? Was the money spent to pay for your Chama’s annual get-together in Diani? 

It is perfectly okay if the debts were due to your effort to meet your financial goals. However, if you spend borrowed money to meet your immediate consumption or satisfy your bad spending habits, you need to recognize that there is a problem and take steps to change it. 

Otherwise, even after you dig yourself out of this mess, you might end up back inside once more. But how do you do that? Here are some tips;

  • Learn the difference between a want and a need. Sometimes it is unavoidable to get into debt. For example, you can not let a loved one go hungry when you have no other income. However, taking a Mshwari loan to buy takeaway sushi for your loved one is not necessary. 
  • Stick to cash and stop relying on credit/debit cards or mobile payments. Paying with cash makes you more conscious of your spending. Stop paying using your mobile phones if it makes you feel richer than you actually are.
  • Learn to stick to a budget. I know this is a struggle for many people. Learn not to spend above your budget. If you intend to pay Ksh. 2000 in the supermarket, ensure to stick to that.  

Avoid getting into more debts.

The only way not to be in debt is to avoid getting into unnecessary debts. It is easy now because you already know why you are in debt. 

Lately, loans are quite accessible easily and everywhere-especially mobile loans. Are you in the market and you are short of money to cover your shopping? Do not worry. Fuliza is here to help. Is your salary late by a few days? Worry not. You have many mobile loan options to help you sort out the landlord while waiting for the ‘salo to reflect.’

But as much as these loans come in handy when you most need them, they can be very dangerous. They hold you captive and slowly but surely eat into your finances through their high-interest rates.  

It will take a lot of self-discipline and determination to stay away from the temptation of these loans.  

However, the only way to succeed is to be intentional about it. Decide to avoid debt and stick to it. For example, you can use this 30-day rule to help tame your bad spending habits. 

Find ways to make more money.

You can cut only so many corners to successfully pay off your debts and pay your bills while still avoiding more debts. 

So, after analyzing your debts, creating a payment plan, and eliminating some expenses, your next goal should be to increase your income. If there is no hope of a quick promotion or a pay raise at work, then it is time to look outside your employment for ways to generate income. 

For example, find passive income streams that can help you generate income with little effort and involvement. This way, you will be able to have enough money to help clear the debts as well as sustain yourself financially so that you do not get into more debts.  


If you are reading this article, you have probably already realized that you are stuck in a debt cycle and want to break free. And the first step to getting better is recognizing that there is a problem and then working on getting better. 

But the truth is, there is no secret formula. The points above help give you a roadmap and a clear starting point to help dig yourself out of the mess you have created. Best of luck. 

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Doris is a finance professional, freelance writer and SEO expert. She has experience helping businesses of all sizes create content that helps improve their site quality and increase their online traffic. She is a personal finance and wealth creation enthusiast and a frequent contributor to Money254. Visit Doris' personal website to learn more about her work.

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