How to avoid the debt trap and take control of your finances

By John Castro, CEO of Investment Mastery


Living in uncertain times can make us feel that taking control of our finances means primarily saving up and keeping money for a rainy day.

However, the key to avoiding the debt trap is not only to be mindful of your spending and prioritising debt repayment but also, to build a strong financial foundation. With the right mindset and a solid plan, you can take control of your finances and achieve financial stability regardless of your starting position and economic situation. Here are some key steps to take control of your finances.

Create a realistic budget

Creating a realistic budget will enable you to track your income and expenses making it easier to find the areas of overspending. You will then be able to make necessary adjustments in your budget and build up your savings from the reduction of unnecessary purchases, which can later be used in moments of emergency or even retirement. By sticking to your weekly or monthly budget, you are also making sure that you live within your means thus, avoiding paying with your credit card for unnecessary purchases.

Changing your mindset towards money 

John Castro

Having a scarcity mindset and different types of biases towards either being impoverished or wealthy might make you feel hesitant to take a financial risk through investing. If you think that there is some type of psychological barrier that might hold you back from taking a reasonable financial risk, living within your budget, or setting some financial goals, you might want to unpack your assumptions around money, which you adopted in early childhood or teenage years, and ask yourself whether they are adequate to your current circumstances and whether they align with your personal goals and values.

Learn how to invest 

Before you embark on any investment, you should take time to read books by experts, such as Think and Grow Rich by Napoleon Hill and Rich Dad Poor Dad by Robert T. Kiyosaki or listen to some podcasts, such as the Iced Coffee Hour by Graham Stephan, which will boost your knowledge and keep you informed about current markets and personal finance. After getting some idea of the personal finance basics, you should find some investing courses online that can teach you investing strategies as well as risk management. Finally, do not underestimate the power of the network! By asking for advice from some colleagues or other people in your circle, who have already gained some experience in investing, you can learn from their mistakes and keep yourself motivated even in financially tough times. After you gain some basic knowledge about investing and embark on some low-risk investments you can then look to diversify your investment portfolio by looking at sustainable investments and new technologies such as Medtech, edtech and space tech or simply any brand you love!

Look for stability in your first investments

While investing in the current socioeconomic landscape might sound counter-intuitive there are a few multi-billion corporations in which investing in comes with less risk. By these multi-billion and fundamentally strong companies, we mostly mean the big 4 such as Google, Amazon, Apple, or Microsoft. It can be tempting to think that you will never get a chance of getting a stake in the shares of any of these brands, but occasionally their share prices drop significantly so that everyone can get a chance to gain some equity. What these four brands (and many more) have in common is that they lie in the foundation of modern civilisation, are used by billions of users daily, have a positive economic outlook and will be around for at least the next couple of decades, meaning they are a relatively safe investment option.

All in all, the steps to avoid the debt trap and take control of your finances do not solely include having a realistic budget, sticking to it, creating a savings plan, and avoiding using your credit card. It also means taking active steps in expanding your wealth, mainly through investing, but for that, you need to be able to manage the financial risk and look at your mindset around money. By combining all the steps together and with the right education you can not only secure your future but also pursue wealth for yourself and your family.


John Castro Bio

John is the CEO of Investment Mastery, an e-learning and online training company dedicated to educating beginner investors on how to use the Stocks and Crypto Markets to create financial independence for themselves and their families. From humble beginnings, John thrived for success at a young age, which has seen him involved in many business ventures throughout his 20s, using his impressive sales skills to produce untapped revenue for several 7 to 8-figure organisations. Today, he has harnessed his ability to understand human buying behaviours, build high-performing teams and his methodology of keeping business very simple, to take Investment Mastery to new heights, which has seen over 25% growth year on year since 2017. Using Investment Mastery’s investing methodology, his investment portfolio grew 147% in 2021, and now, still only in his 30s; while embracing the ongoing evolution of the e-learning industry, he is leading Investment Mastery through a transformational plan to expand internationally with a plan to 2.5x the business in the next three years and champion the combination of EdTech with FinTech through the ever adapting Investment Mastery membership platforms.


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