Posts Tagged ‘Problems’
So you have financial problems ?
Posted by admin in Financial Management on January 23rd, 2010
With the ever increasing cost of living and the period of easy financing by our banks a lot of people have over extended themselves financially. Basically if your monthly income is lower than your expenditure on a regular base you have a problem. (If it only happens occasionally then you should be OK if you of course saved in the better months).
So you find your self in this difficult situation? Is it the end of the world ? Not really but you must take action to reverse the situation. If you ignore it and hope the situation will improve by it selves then we have news for you. It won’t. Rather take action immediately and speak to your bank manager before he want to see you.
So what actions can one take to reverse the situation.
Work out a budget Cut up your credit cards and store cards (except for one you might need it in an emergency) Cut unnecessary expenses (which ties in with your budget) Consolidate your debt Increase your income
How to work out your budget
Add all your monthly income together to see what is available Start adding up all fixed expenses and classify them with 2 classifications. The first classification is the type of expenditure, the second classification is importance or need factor Start adding up all the variable expenses and again classify them in 2 different classifications
Now you will have a clear idea of how much you spend and on what and how much more you spend monthly above your income
Cut up your credit cards and store cards
This should be fairly easy. Take a scissor and start cutting and feel good about your selves.
Why keep one card. Sometimes one has an emergency or a cash flow problem so to have some backup is all ways good.
Cut unnecessary expenses
Now that you know how much you spend monthly and have cut up your credit cards etc. (which should stop you from impulse spending) you can analyse the budget you made.
Now start taking away those expenses which the lowest need factor/importance. (And you still can treat your selves to an evening out, but maybe go to a less expensive place and less often)
Consolidate your debt
Now that your credit cards are gone it is time to start paying them of. But it might be wise to consolidate all debt you have into one account for example your home loan and start paying lower interest rates. credit cards,personal loans etc are notorious for high interest rates. So speak to your bank about how to consolidate. They should be all to happy that you take your financial future in your own hands
Increase your income
This might be the most difficult of them all, because maybe you all ready have 2 incomes or you work double shifts. So this option is depending on one’s personal situation
If one follows up on even some of the suggestions in this article you might be well on your way to turning around your finances without winning the lotto
5 Key Personal Finance Problems – Which One Do you Want to Overcome?
Posted by admin in Personal Finance on December 24th, 2009
You can take control of your personal finances by applying the lessons listed below.
Problem #1. Spending Without Knowing Your Limits
As in business, you will not last long financially if you spend without regard to your income. Knowing your spending limits is not hard to do. Just find the answers to these 4 easy questions:
Question #1. What is my take-home income per pay? (that is your total income less taxes)
Question #2. What do I need to spend to live?
Question #3. What is the difference after taking spending from income?
Question #4. Can I save enough for my future from the answer in Question #3?
There are many tools to help you gain answers to these questions. You can find many on the Internet. Helpful Hint: Find one that helps you set your savings targets, checks your ability to meet the targets and then shows your progress towards your goals.
Problem #2. Spending Without Setting Savings Targets
It’s OK to spend to the limits of your income but that does not provide you with any buffer for urgent purchases, or protect you from a financial emergency. Urgent purchases could be renewing a broken fridge or stove, calling a plumber to fix a broken pipe or having to spend for major car repairs. Financial emergencies could be temporary loss of income or hospitalization of a family member. How would you survive financially in any of these situations?
You can begin to save today, it’s easy. What if you went without your bought lunch each day at work? That saves you $1,000 per year on $5/day. What if you reduced your Starbuck’s coffee by 1 each working day? That’s another $1,000 per year on $5/day. Just those two amounts alone can mean a holiday for you, the beginnings of a savings plan, or an emergency buffer.
If you set a target of 10% of your take-home pay each payday that would be a good start. If you think creatively, you are sure to come up with ways to achieve this. Think of the peace of mind that would bring.
Problem #3. Spending Without Knowing How to Save
There are many easy ways for you to save money that allow you the freedom to spend when you see something you really want. Some of these are:
1. Don’t buy on impulse. Ask yourself 2 or 3 times “Do I really NEED this?” before you buy. If you cannot answer with a resounding “YES ” let it go.
2. Don’t buy things JUST because they are on sale. Only buy things you need. If you do need them wait a few weeks the price may fall even further.
3. Don’t buy the latest fashion items at the height of the season. Just wait a while. The prices usually reduce.
4. Don’t compare yourself with others and what they have. They may have purchased making the same finance mistakes as you.
5. Set yourself a savings target. Put this money aside each payday BEFORE spending any of your pay.
Problem #4. Spending Without Feeling Satisfied
Spending can leave you feeling pretty shallow and unrewarded when you purchase on a whim or fancy when you really know you cannot afford the item. What’s more you may not even use it. What a waste!
To really FEEL GOOD ABOUT SHOPPING and spending you need to know these 4 things:
1. My budget allows me the freedom to purchase this item
2. I have the cash put away already for this purchase (even though I will use my credit card for the transaction).
3. This purchase is something that I really want and will use.
4. I have purchased this item at the best possible price, saving as much as I can.
Problem #5. Spending Without Caring About Your Future
Unless you are planning for your future and financial security, you cannot be really happy. There are always worries lurking in your mind about how you would survive in a financial emergency if you have no savings. It can be very rewarding to see how quickly your savings multiply over time with only a small investment each payday.
Did you know that by saving just $5 every day this would grow into $1,867 in 12 months at 5% interest and then it grows into a whopping $10,343 in 5 years? Isn’t your future worth investing in?
Why not start to overcome your personal finance problems today? Looking back you’ll be so glad you did!
If you click on the links below you will be taken to a great budget solution. It helps you set your savings targets, checks your ability to meet the targets and then shows your progress towards your goals.