CedisPay's 7 Debt Management Rules

Dear Valued CedisPay Members,

At CedisPay, our commitment extends beyond merely providing responsible loans. We strive to see you flourish as you pursue your financial aspirations. As part of our mission, we introduce the CedisPay Financial Wellbeing Model, or the CedisPay Builder System, a cornerstone in empowering our customers to achieve financial wellness.

The CedisPay Financial Wellbeing Model is a robust framework rooted in the ethos of prudent financial management. Comprising five essential components, this model serves as a guiding light towards holistic financial health.

• Empowering Beliefs and Mindset
• Proper Protection
• Credit Builder and Debt Management
• Emergency Fund
• Investment

Today marks the second edition of our 5-part series, where we unveil the core principles of the CedisPay Financial Wellbeing Model. Last week, we explored the CedisPay's 7 Money-Saving Rules, aimed at fortifying your financial resilience. This week, we invite you to embark on a journey of financial empowerment with CedisPay's 7 Debt Management Rules, meticulously designed to pave the way towards financial freedom and security. Let's delve into the specifics of each rule and understand how they equip you with the tools and knowledge to navigate debt responsibly:

Rule 1 - Limit Your Borrowing Expenses: Keep borrowing expenses below 30% of income to maintain financial balance:
• How it helps customers: By ensuring borrowing expenses remain below 30% of your income, this rule fosters a balanced financial outlook, preventing undue strain on your finances
• Research Source: Based on the widely endorsed 30% rule of thumb for sustainable debt management. (Source: Investopedia)

Rule 2 - Automate Your Borrowing: Set up automatic payments for loans to ensure timely repayments and boost credit scores.:
• How it helps customers: Automating loan payments streamlines the repayment process, promoting consistency and bolstering credit scores
• Research Source: Studies show that automated payments reduce the likelihood of missed payments, thus positively impacting credit scores. (Source: Consumer Financial Protection Bureau)

Rule 3 - Prioritize High-Interest Debts: Pay off high-interest debts first to save money and speed up becoming debt-free:
• How it helps customers: By prioritizing high-interest debts, individuals can minimize interest payments and expedite their journey towards debt-free living
• Research Source: Financial experts emphasize tackling high-interest debts first to reduce overall debt burden. (Source: Forbes)

Rule 4 - Create a Budget and Stick to It: Develop a budget covering all expenses, including debt payments, to avoid overspending:
• How it helps customers: A well-structured budget facilitates prudent financial management, curbing overspending and ensuring timely debt repayments
• Research Source: Studies suggest that adhering to a budget is crucial for achieving financial goals and maintaining fiscal discipline. (Source: Harvard Business Review)

Rule 5 - Build an Emergency Fund: Establish an emergency fund to cover unexpected expenses and prevent further borrowing:
• How it helps customers: Establishing an emergency fund provides a financial safety net during unforeseen circumstances, reducing the need for additional borrowing
• Research Source: Research indicates that individuals with emergency funds are better equipped to handle financial emergencies without resorting to debt. (Source: National Endowment for Financial Education)

Rule 6 - Avoid Taking on New Debt Unnecessarily: Resist taking on new debt unless absolutely essential to maintain financial health:
• How it helps customers: Resisting unnecessary debt minimizes financial strain and encourages responsible borrowing habits
• Research Source: Studies show that impulsive borrowing leads to increased debt levels and financial stress. (Source: Journal of Consumer Research)

Rule 7 - Monitor Your Credit Score Regularly:
• How it helps customers: Regular credit score monitoring ensures accuracy and identifies opportunities for improvement, enhancing financial prospects
• Research Source: Studies demonstrate a correlation between frequent credit score monitoring and improved financial outcomes. (Source: Federal Trade Commission)

Additionally, we encourage you to seek professional advice whenever needed to navigate debt management challenges effectively