How to Manage Debt like a Champion

Your state of mind matters a lot when it comes to being in debt. It’s more important than managing the actual debt itself. I have several rich friends with big salaries, big houses, and big debt, and the emotions they have are no different than the emotions of people below the poverty line who have $1000 on a credit card that never gets paid down. Debt makes people afraid and anxious, and these fears can trickle into other areas of their life.

Sometimes, conflict in the home has its roots in financial pressure caused by debt. Paralyzing depression can also be a common occurrence with people that are heavily indebted. And in that negative mental state, a person will not be able to execute the strategies required to regain control of their finances.

But you don’t have to go there. Instead, by injecting some new ideas about managing debt, you can shield yourself from negativity and get back on the path to maximum profit. Here are some ideas on how to manage debt like a champion:


1.) Read books, watch YouTube videos, and study businessmen that have been heavily indebted

Figure out what they did, and see if there is anything you can apply to your situation. Nothing is worse than wallowing in your own self pity and thinking you’re all alone. Many great leaders have bore the burden of massive debts. For example: Elon Musk almost ran out of money while building Tesla. Donald Trump almost went bankrupt in the early 90s when the real estate market crashed.

Personally, the first time I ever carried a lot of business debt, I carried about a million dollars, and there were a few times I had trouble paying everything back as initially scheduled. I studied Donald Trump in his book, How to Get Rich, and learned how he handled 9.2 billion in real estate loans he could not pay interest on due to market volatility. While many of his real estate peers went bankrupt, he was able to avoid that peril, and after a few rough years, returned to a more prosperous state. I too, was able to regain control of my finances by stealing an idea I would not have learned without reading the book.

Seek knowledge by reading and watching videos, talk to people familiar with managing debt and learn everything you can from others that have been in debt. That’s how you learn to get out. If you continue to study and absorb information in this area, it will only be a matter of time before your debts are in the past.


2.) Create a reasonable assurance that better earnings are inevitable

Without future prospects for success, it becomes hard to maintain a positive outlook on your business. However, if you have a business that is selling well, but you’re just in financial straits because of something that was out of your control (like COVID lockdowns), it is easy to convince yourself to keep going and also to convince a debtor to give you more time.

When I was in debt and faced payments greater than profits, I was able to work a deal out with everyone I owed money to because I was booked solid, months in advance, plus I had several new customers booked in over the coming months. I was able to show a steady path to greater profitability, and therefore, a way to get sustainable debt payments going again.

Can you do that with your business? This is where I differ from most people that preach positive thinking just for the sake of being positive. I do not believe in positive expectations unless there is sufficient action taken to justify it. If you are taking massive action on a daily basis and it’s producing results, then there is sufficient rationale to be positive about the future. Resolve to create a multimedia, multi-step system for generating leads, retaining regulars, and generating referrals. This is the real secret for staying positive even when heavily indebted. It has nothing to do with your attitude. It’s all about action.


3.) Call in favors

If you have a reasonable assurance things are going to improve in the future, it should be easy to convince a debtor to give you a short term break or reduction on payments so you can get caught up. Reduce the pain by spreading payments out, asking for deferrals, reduced payments, longer terms, or reduced interest from anyone you owe money. Not everyone on your list of debtors will say yes, and of those that say yes, they may not give you everything you ask for. But if you have strong numbers and can demonstrate that keeping you alive is in everyone’s best interest, some of the people you owe money may give you the grace you need to get through.

Pick up the phone, talk to everyone that’s on your list of debts, and negotiate a deal. You never know—the favors you ask for may be granted.


4.) Seek refinancing options from multiple banks

You can usually find cheaper money if you shop around a bit. I was able to save 3% in interest on unsecured debt I had by borrowing on a different product the same bank provided. The underwriter was not happy because I was ultimately moving a balance from a higher interest product to a lower one (therefore they would make less money off me), but they had an advertised product that came out for cheaper rates, and I insisted they give it to me. They did not accept my reason for wanting the loan, so I told them I wanted it for a consumer purchase.

Once I got the loan, I immediately flipped all my expensive credit over to the cheaper one. That simple move saved me thousands of dollars in interest on the year and lower monthly payments.

You never know what financing options are available until you start knocking on doors. Not all banks are created equal. I’ve had some banks return my call the same day. Others take weeks. Some don’t call back at all. But you never know for certain until you start shopping and pressing the banks for more manageable debt options.


5.) Do not blame anyone if someone else is at fault 

Some people walk around upset all day long because their debts were caused by the actions of others. These people constantly rehearse scenarios of “what they should have done” instead of accepting what happened.

I know what this feels like, and it is not good to go here. You don’t need to search for any deep meaning, or try to make sense of it all, or apply some air-headed nonsense like, “everything happens for a reason.” Bad things happen and sometimes there is no logical reason for it. Leave it at that. Instead, resolve to move forward and use the pain that you have felt to make better decisions in the future. Decide to become better because of what happened. Avoid the anger that comes from blaming others and instead stay focused on making improvements.

Kevin Tam is a Sculpture Hospitality franchisee with more than a decade of experience working directly with bar, restaurant, and nightclub owners on all points of the spectrum. From family-owned single bar operations to large companies with locations on an international scale, Kevin works with them all and understands the unique challenges each kind of company faces. He’s also the author of a book titled Night Club Marketing Systems – How to Get Customers for Your Bar, a regular writer/contributor for Bar & Restaurant, and publisher of an eBook called: The 5 Commonly Overlooked Areas That Kill Your Food Cost.



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