The Aim Of Personal Financial Management

Leave a reply

If you pay any attention at all to your personal finances – and after all, why wouldn’t you? –  you will almost certainly have heard people discussing the importance – or otherwise – of setting personal financial management goals. There are many useful resources online – click here for an example – but the concept is not all that complicated and we thought the following would clarify matters nicely…

ID-100103993

While different people have different views on the subject, its probably fair to say that the goal of financial management should be two-fold. One is to enhance rate of return, the other is to maintain a high level of safety in all instances. Sometimes those two goals go in direct conflict with each other. Because, many times it is said, that the higher return requires a higher risk for you to lose principal. And as evidence of this many people would put their money into a business. Businesses have a very high rate of not succeeding going forward. So it’s important when you look at that, if you run a business, and you do a great job of it, you can have a wonderful lifestyle as a result of that. The downside is of course that if your business fails your savings and capital will be substantially art risk. The extent to which you are exposed in this scenario will depend on the business model you have chosen and just how much personal liability attaches.

If you don’t have a business, and you just put your money into a savings account, be prepared to have a very low rate of return. Would you be better off using any savings to pay off high interest debts such as pay day loans even from respectable firms like omniloans? So always be mindful of those two hallmarks, of the goal for financial management, is to try and achieve the best rate of return, but have the highest level of safety going forward.

Personal Finance Tips – Getting Out Of Debt

Leave a reply

Today I’m going to talk about how to get out of debt. The first point that I would have touch on about is what needs to be done to get out of debt. It sounds simple but really honestly, it all comes down to spending less, keeping your expenses lower than your income.

As soon as your expenses begin to rise above your income, that’s when people start to get into trouble. I know it sounds easier said than done but it really is an important point. If you do find yourself with debts that have accumulated, one of the things that you’re going to really want to take a really hard look at, and it’s hard, mentally, for people to grasp this and go with this, but really take a look at the amount of debt that you have and take a look at the amount of savings that you have and think seriously about using your savings to pay off your debt.

ID-10094985 (1)

I know people, sometimes, feel like they want to keep a stock pile, emergency savings, some liquid savings, but you have to look at your cash flow, and you have to look at your budget, and you have to look at the amount that you have sittings in savings, and the amount of your debt, and the amount that that debt is costing you.For example say you have a debt with a payday loans firm like  alphaloans.co.uk. You will be paying an exorbitant amount of interest on your loan, while you will be lucky to receive a few percent on any savings you may have. It’s therefore a much more efficient use of your money to pay off your loan – or any other high interest debt for that matter. Not only on a monthly basis, in terms of your payment, but also in terms of the interest rate on the debt and the accrual because it continues to compound so the debt grows over time and if you’re paying eleven percent in credit card debt, or even seven percent, a rate that may seem semi-reasonable and your savings is only earning two percent or three percent, it’s going to be a much better use of your money to use your savings to pay down the debt.

Save yourself the monthly payment and the goal for the future would be to use the amount that you were paying, to pay down the debt to then, replenish your savings, so that’s one good strategy that you can use. One of the things that you really want to work towards, if you do find yourself in debt, is to set up a really solid budget. It does take some time and it does take some leg work but you really want to get down what your monthly Income is, from all of your different sources, net, after taxes, to find out what you’re actually bringing into the household. You want to look at all of your expenses, you want to make sure that you take into account, not only your fixed expenses, like rent, but  also variable expenses and unforeseen, for example, the car breaking down. People don’t budget for that and you really should because on an annual basis your car is going to need a tune-up or a repair so you want to try to budget in and put padding in for things that happen, gifts, Christmas, things like that, you want to make sure that you put a budget line item in for that.

If you’ve done all of that and you still find that you’re not able to keep up with your credit card payments or that you’re not really making the dent that you would like to make in your credit card payments, what you want to do at that point is really, before it gets to collections, is to call the lender or the credit card company and just have a talk with them. Most credit card companies or lenders are going to want to work with consumers to either negotiate a payment, negotiate a payment schedule, they’ll also work with you to renegotiate your rate down to something that might be more reasonable.

Log On For A Bargain

Leave a reply

Everyone is much more aware of their outgoings these days as a consequence of the credit crisis of 2008-2009 and everything that has followed on from it.

One welcome introduction since the economic downturn has been the growth of comparison sites, discount stores and daily deals offerings. If consumers use these services wisely they can make considerable savings on a range of goods and services and help make their hard earned cash go just that little bit further.

ID-10072293

Take the comparison sites that are everywhere on the internet these days. Using these sites you can very quickly get a range of quotes on a variety of different products and services especially things like car or life insurance and financial services products such as credit card and loans. Whereas before searching for good deals on products and services such as these would have involved endless calls to a range of different banks insurers or other providers, now everything can be done from the comfort of your living room with the simple click of a mouse.

There are even dedicated comparison sites available now for services such as TV and broadband so there is no longer any excuse for not getting hold of the best possible deal.

When it comes to shopping for clothes or for household goods again there is no lack of choice with discount sites like Quidco offering generous discounts across a variety of goods. If designer gear is your thing you could try one of the established players in this market like Brandalley or Secret Sales where if you are quick you may be able to get hold of a Gucci handbag or a pair of Ray Ban designer sunspecs at discounts of up to 60%. If you prefer the great outdoors Canadian specialist, Save On Goods offers great prices on a range of sporty products like animal hats and wild hats that are to be seen in most North American ski resorts these days.

And if you are in the market for a professional service rather than  goods you are not left out. There are plenty of great daily deals sites that offer fantastic discounts on household services like domestic cleaning. One business, Proclean domestic cleaning Glasgow reports an increase in turnover of over 33% in the last  year which it attributes largely to its involvement with daily deals sites, so it appears they are a win-win for both participating business and consumers. These sites could not be easier to use. All you do is register and you will receive a message each day with that days specials. If you see something that appeals go ahead and buy and make a great saving into the bargain.

 

 

 

The Changing Face Of Finance

1 Reply

The financial meltdown during 2007-9 is hardly likely to go down in history as one of the finance industry’s finest moments. However, it’s had some surprisingly positive evolutionary effects on the finance market. Borrowers have had to navigate a hostile environment full of loan sharks and let’s politely say “dubious” credit options. Some borrowers effectively opted out of conventional finance, took cash loans to cover short term situations, and went looking for answers.

The rise of a cultural change in finance

Confronted with a desperate need for credit and an economic situation which was as bad as 1929, businesses needed answers. Big Finance had practically destroyed global credit, single-handedly. Worse, it was also pulling the plug on lending. A culture which had been pretty brazen about the “status value” of loans was suddenly bean counting, furiously trying to show positives in an almost entirely negative situation.

do-i-have-a-ppi-claim

More worryingly for businesses, this sudden attack of uncharacteristic conscientiousness was reducing the number of loans while raising the degree of difficulty in getting loans. One entrant to the market at this time was the firms of payday lenders such as Blue Sky Loan – http://www.blueskyloans.co.uk –  Perhaps not the ideal business environment.

Alternative sources of loans included some rather iffy possibilities:

• Finding credit providers out of thin air, when most of the big lenders were acting like endangered species.

• Taking out bigger loans, which was all the mainstream lenders seemed to be interested in, in what was definitely a seller’s market. Not good business, and likely to be extremely expensive.

• Borrowing from actual loan sharks, at very high rates of interest, and on unfavorable, often onerous, terms.

In the US, the credit situation was truly critical for many businesses. Some were literally paying salaries with credit cards. Others were watching their capital dissolve before their eyes.

Enter microfinance, exit loan sharks

Businesses didn’t like, or trust, the lending environment. They didn’t want to carry oversized debt on their books. They were also infuriated at the fact that they, as good credit risks, were apparently being penalized for the many failings of the finance sector.

This utterly unacceptable situation had created the perfect market for microfinance. Microfinance in its modern form is actually a sort of “best practice manual” for both borrowers and lenders. This form of lending is all practical, based on realistic parameters.

Microfinance is extremely efficient, and cost-effective. Risks are avoided from the outset. Only foolish people lend in a way that creates problems for borrowers, and microfinance is designed to avoid risk. Micro enterprises didn’t take long to join the dots and start using the microfinance option in preference to the banks and loan sharks.

Ironically, loan sharks, by definition, were utterly uncompetitive against microfinance. Their rates were as bad as the banks or worse, and they were equally clueless on the subject of actual borrowing needs and issues. Poetic justice, in many ways. The other great instance of overdue justice was that Big Finance had effectively shut itself out of a big new booming market, based on its own myopic policies.

Microfinance started as a trickle of liquidity which is rapidly becoming an ocean. The finance markets will never be the same again.