Finance

Financial Terms You Must Know

Financial Terms You Must Know

finance

In the field of business and marketing, there are so many people who are quite good at entrepreneurship in general. A majority of them have some or the other kind of built in skills lie communication skills, sales another factors. But no matter how skillful a person is, one has to be aware of the financial terms which are most commonly used in the market.

Now here is a list of some of the top finacila terms that are used in the market on a common basis.

Assets

These are referred to those financial resources that any business entity usually has. These may include things like the products that are there in the inventory, the office supplies and the furnitures that have been purchased. Now these assets will count towards the total value worth the business as they could be sold when the business is going through some serious financial problems.

Liabilities

Now liabilities refer to the debts or the loans that may be on the business which they may have incurred during the initial days of establishing the business. It may have also incurred during the growth and the maintenance of its operations. Examples are bank loans, monies, credit card debts etc.

Expenses

Now the business expenses refer to that cost that is incurred every month by the businesses for the operation of it. This may includes rent cost, legal costs, utility cost, salaries of the employees etc.

Cash flow

The cash flow refers to the mobility of the funds every month that happens through your business. This includes both income and expenses. The cash flow also helps in determining the long term solvency.

Bottom line

This is refered to that final amount which is a summation of all the amounts that have been earned or lost by the end of the month by any business. In general, it is basically the last financial figure and depicts the earning of the business in terms of whether it has increased or decreased.

Financial report

A financial report is a report that is used to depict all the transactions and the expenses that have taken place and thus represent the account in a comprehensive manner. It is created by the potential inventors by both the internal and the external sources.

Financial statement

This is similar to the financial report but it contains the list of all the various kinds of finance related activities that have taken place. Although the financial statement is considered to be relatively a more formal kind of document tha the financial report.

Cash flow statement

As the name suggest, the terms cash flow statement is used to refer to that money that came into the business and that left the business in a given specific duration of time. It is that money which entered and then excited in a given time frames.

Income statement

The income statement depicts the profit earned by a business entity in a given specific period of time.

Balance sheet

The term balance sheet is used to refer to a particular snapshot that is used as an overall representation of the financial situation in a given time frame.


Understanding Asset Allocation and Diversification in Your Investment Portfolio

investing funds

Any good investor needs to understand the risks of putting “all their eggs in one basket” and not adequately allocating assets among various investment possibilities. When it comes to investing, a sure thing is rare or even non-existent. For this reason, it’s always important to diversify and make sure you’re not risking too much as an investor in one particular area.

Major reasons why diversification is necessary

There are quite a few reasons to consider when it comes to evaluating your plans for asset allocation and diversification. The better you understand the major purposes of having a diversified portfolio, the better able you’ll be to make plans to maximize your investment profits. If you are in a pinch, find a quick cash loan rather than cashing out your major accounts focused on long term savings, the penalties are not worth it.

The following are three of the biggest reasons to consider for properly allocating your assets and diversifying your portfolio:

Minimizing the risks of investing funds

While investors are obviously aware of the fact that they can make money from investors, they should also understand that investing involves putting your money on the line. An investment inevitably entails some amount of risk. The way savvy investors mitigate risks is by portfolio allocation that ensures a good amount of diversification.

Hedging the portfolio against low returns from certain sectors

One of the biggest advantages of diversifying a portfolio is that it can allow a portfolio to be successful even when individual sectors are failing. It never happens that all sectors progress and exhibit growth at the same time. Diversifying funds among various sectors means that one sector can see a dip while the growth seen in other sectors will make up for the resulting losses.

Preserving available capital to the greatest extent possible

One of the primary goals of any investor is to make sure that no capital is lost overall. In evaluating risk vs. reward, it’s imperative to consider that any loss in capital makes all the investments unsuccessful and all the time spent making investments lost time.

Being sure to preserve capital requires diversification. If only one or a few limited investments are made, capital is more at risk than it would be if adequate asset allocation is allowed for.
Problems with spreading your investments out too thinly

While diversifying is always important, it’s also important not to overdo it. You don’t want to spread investments out so thinly that you don’t see large profits from any particular area. You’re not going to be able to see significant profits from a good investment if you didn’t invest enough funds in the one sector that’s taking off.

Be reasonable about diversification. Don’t try to make every investment you can. Do enough research to pinpoint a few investments you can put a decent amount of funds into so that your individual investments could potentially see decent profits.

When you are making plans for your investments, it’s important that you sit back and think about how you’re going to manage diversification needs. Make sure you’re not focusing too much of your investment capital in one particular sector. If you do, you’re taking unnecessary risks and might end up losing your capital and shrinking your portfolio over time.


5 Common Mistakes with Business Loans

For most businesses, at some point in their growth they will need to take out a business loan. Whether you are a startup looking for cash to get your business off the ground, or a company who has been around for years, we could all use a helping hand in the form of money.

When deciding if a business loan is the best for your company, you need to think about every aspect of how it will work. This includes keeping in mind all of the things that could go wrong. Here is a list of the most common mistakes made with business loans and how you can avoid them.

Not Having a Successful Business Plan

When planning to take out a loan it is essential to understand what you will use your business loan for and then plan for how you will pay it back. Without a proper plan on how you will utilize these funds you could suffer from irresponsible or even accidental overspending.

Not only can the lack of a good plan send you into debt it can prevent you from getting approved for the loan in the first place. Lenders look well thought out plans that provide them peace of mind to hand over their money. Walking into a bank without a good plan will most likely lead to you walking back out with a frown and rejection in hand.Prevent drawing the loan approval process out by formulating a solid plan before reaching out to lenders.

Waiting for Emergency Expenses

Business loans are not just for covering urgent or emergency expenses, such as a seasonal shortfall, or covering building or vehicle repairs. The most successful businesses use business loans to make timely investment in new technology, new locations, new people, and more.

Waiting until you desperately need cash can lead to a rushed planning process. Planning for your business loan should take time as there are a multitude of factors you will need to consider. If you attempt to throw together a plan you risk the bank denying you. As stated before they need to feel comfortable giving you their capital.

Even if a lender does approve your loan on your rushed plan, you may have accidentally developed a plan that is set on course for disaster. Keeping an eye on your finances and doing yearly sales projections should help you see far in advance if you will need to apply for a loan. Begin your plan as soon as the idea of a loan comes up so you are sure you have enough time to create it, and so can be checked over.

Failing to Shop Around

Just as a bad credit score can cost you, taking the first loan offer that comes your way can make your loan unnecessarily more expensive. You can start with your bank or credit union, but then look at nearby competitors. Don’t forget to look at offers online, too. Shopping around can also give you a second chance if you are rejected on your first application.

Make sure to look at the fees associated with the loan, as well. Some lenders charge origination fees that can range from 1% to 6% of the loan. These fees are typically deducted from the loan amount, meaning you won’t actually receive $10,000 when you apply for a $10,000 loan. Each lender will have loans that range in interest rates as well.

Keep in mind your plan for your business loan pay back and see how the interest on each loan will affect it. Every lender and loan is different so be sure to inquire on the details of each one you can.

Not Thinking About How Much Money you Actually Need

Before you apply for a business loan, you should narrow down the amount of money you actually need and stick to it throughout the loan process. Business Loans can help in every facet of your business from inventory to payroll and even helping your business with its prior debt. When calculating how large of a loan you will need take into consideration every cost you need to cover.

Keep these costs in mind:

  • Business Expansion
  • Marketing
  • Paying Employees
  • Purchasing inventory
  • Purchasing equipment

Some less than ethical lenders will encourage you to borrow more money than you need because they are looking to make a bigger profit. When you borrow more money than you need, it can be more difficult to pay back, plus you’ll have “dead money” sitting in your bank account which isn’t being helped by inflation. Finding a balance between borrowing too much and borrowing just enough is a balancing act. Don’t be afraid to reach out for help.

Using Loans Irresponsibly

This mistake is one that comes not necessarily from poor planning, but from poor decision making. You may have made a great plan that broke down what you would use your business loan for, but if you veer from your plan it is imperative to readdress your plan. Life can throw changes at you and mistakes can happen but you need to be careful when using money that is borrowed.

Keep your loan plan handy and take notes with every purchase you spend your business loan on. Compare you initial plan with the money you have spent and adjust the rest of your plan accordingly. Just like with a personal budget, your need to stick with a business loan budget or you can risk running out o the money before you expected.

Conclusion

Fearful of falling into these business loan mistakes? With proper planning and a strict discipline you can avoid these issues and have a smooth business loan process. Companies like Get Out of Debt are here to help. With free blogs to help you understand your loans and plans to pay them off, They also have plenty of information on personal finances, should you need some assistance there.

If you have any experience with using business loans, leave a comment and share your most helpful advice in the section below.


How to Actually Decide if Debt Consolidation is Right For You (and When It Isn’t)

Sometimes when you’re swimming in debt, taking control of your circumstances once and for all seems like an unbearable burden.

You have most likely considered a few different paths you could take to pay off your debt, but decision paralysis is a real thing, my friends. Just remember, you’re not alone.

Credit card debt is America is growing at near lightening speed. In fact, the average American household carries over $15,700 in credit card debt. With average interest rates being nearly 14%, American families are paying more than $2,000 of interest if they choose to only make the minimum monthly payment.

That’s crazy!

It probably won’t surprise you then that debt consolidation is a hot topic among those working to get out of debt and achieve financial freedom.

Not only can a debt consolidation loan help achieve this goal, but it already has for many thousands of Americans living with debt.

But that still doesn’t make it the right choice for everyone.

In case you’re unfamiliar or foggy brained on what it means, debt consolidation is essentially the process of gathering up all of your eligible debt, combining them into one lump sum, and taking out a new loan with new terms and conditions to create a single monthly payment. Once the process is in motion, you make a single monthly payment and the firm you are working with distributes the funds to the appropriate debtor until the debt is completely paid off.

So, what’s the catch?

This is where the “not right for everyone” advice comes in.

While combining debt into one payment may be a promising option, it’s good to understand what you’re getting yourself into before diving straight in.

To Consolidate or Not Consolidate, That is the Question

First, it’s critical to understand which debts can be combined and which cannot.

Debt generally falls into one of two categories: Unsecured debt and secured debt.

Unsecured debt is debt that has no underlying asset backing it up, like credit card debt, medical bills, utility bills, and other types of loans or credit you may have.

Secured debt is debt that is backed by an asset, meaning if you fail to make payments, your creditors have the legal ability to take away the asset. Examples of secured debt are things like auto loans and mortgages.

The vast majority of debt consolidation companies only work with clients who have unsecured debt, so if you are hoping to make this work with a car loan or mortgage payments, it’s time to go back to the drawing board.

Benefits Anyone Can Appreciate

When researching debt consolidation, it’s easy to find all the black and white reasons why you should or shouldn’t sign-up with a consolidation firm, but here are few areas where we can all meet middle ground about whether it’s good or not.

Payments become easier. Instead of worrying about meeting due dates on multiple credit cards and various other debts, you will only need to worry about making one payment, on time, each month.

Lower interest rates. If you’re able to secure a consolidation loan with a lower APR than you are currently paying against, the savings in interest could potentially take years off of your debt repayment, which is huge!

Improved credit score. Debt consolidation won’t do your credit score any favors in the short term, but once debts are paid off, many people see a significant improvement on their credit scores in a relatively short time. As you know, this is incredibly important when bouncing back from a serious amount of debt.

Still sound good?

Let’s move on to discussing the not so glamorous side of consolidation: The risks.

Risks to Consider

As you have probably guessed, there are risks involved when it comes to choosing and working with a firm for help with your debt. After all, debt is big business. But being aware of the risks involved is key to avoiding a bad situation.

Before signing up with a firm, consider how you got into your current situation in the first place. Was there a major life event that essentially forced you into a large amount of debt, or maybe you just aren’t sure how to create and stick to a budget. Whatever the reason is, try to identify it.

Second, once your debt is paid off and you can spend freely again, how confident are you that you won’t end up in the same situation later down the road. Many people swear they will never fall back into an overwhelming amount of debt, but without the knowledge and discipline to spend and save wisely, it can happen easier than you might realize.

The Bottom Line

Consolidation can be a great tool to systematically pull yourself out of debt, but as with most things in life, there are risks and rewards to consider. If you are ready to commit to the process and ask for assistance when you need it – both before and after debt – it may help you get out of debt sooner than you realize.

Author’s Bio:

christineChristine Yaged is a co-founding partner and Chief Product Officer of FinanceBuzz. Christine launches and scales brands. She is passionate about technology, digital marketing, and people.


Female finance executives are breaking all barriers – What you should know about them

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Contributed by Linda.

As per the 2017 World Economic Forum and their Global Gender Gap Report, it has been found out that female talent has been seen to be the most underutilized resources in the business sector. Particularly in industries like finance, this is even clearer. As the career level increases in the financial industry, the numbers of female representatives keep declining. Though it is a fact that 48% of the financial employees are female but sadly at the executive level, the figure is just 15%.

There are several women all over the world who are breaking all barriers while playing the roles of financial executives. Few people interviewed 7 such women who belonged to the Forbes Finance Council and they chose to take a look at their experiences and provided some valuable advice to others. Here are few things you should know about them.

#1: The gender gap is both an opportunity and a challenge

There isn’t any secret that the finance industry is entirely dominated by the male population. The finance industry is an ‘old-boys club’ and majority of the men have entered this industry because their college alumni or their father belonged to this industry. This is why women find it hard to break into this industry because there were never too many women who belonged to this periphery. One of the biggest professional challenges has been to break the mold of having a middle-aged man to earn some credibility but when you have the perfect outlook; all challenges will seem to be an opportunity.

#2: Finance is more than just money

Among the women who were interviewed, making a career in finance is not just paying your bills. The ultimate factor is in making the difference so that you can be differentiated in whatever you do and you’re not compared to a man. The financial leaders usually do whatever they want as their jobs affect the individuals in a positive note. This is the kind of support system which is needed and there are 3 quarters of Americans who find it extremely difficult to save money.

#3: A finance professional always keep learning

Besides altruism, the women also reported stimulation of their intellect as the main motivating factor in their careers. They also claimed that the financial markets are impacted by almost everything from politics to climate change and no two days seem to be alike in this market. The women who are interested in shaping their finance career should have broader understanding of the functions which are available. This way they can move down the path which intrigues them most.



#4: Women are the future of finance

Women these days aren’t happy to live with the status quo. They’re all finding their own business and they’re engaging in supporting brand new initiatives which can develop the business culture which works perfectly for them. With the popularity of fintech, both the fintech companies and financial institutions were all embracing the new narratives.

Therefore, if you’re a woman who is interested in the field of finance, you should learn the above listed things from the women who are involved in the financial industry.

 


Factors that Leave an Impact on the Borrowing Capacity

A few key factors tend to influence your borrowing capacity under all circumstances. It’s actually a single important factor that helps in determining whether you can own a home or not. Gaining a fair idea of how much you can borrow is of great help when you’re considering multiple properties simultaneously.

Once you gain a fair idea of your actually borrowing capacity, you’ll be able to adjust your property search accordingly. You may even achieve a few options that fall within your budget once you do your research. Many of you may simply be wondering about the factors that can prevent you from achieving the desired loan amount and the maximum amount that you can borrow.

Find out ways to enhance your chance of borrowing more:

Financial Commitments:

Prior to issuing a home loan, a lender has to determine the extent of mortgage repayment that you can afford. Apart from your income, the lender is bound to check out the commitments you have towards other outstanding debts.

A greater repayment capacity will enhance your power to borrow, more so, when you co-own a property with a relative. Your financial commitments may include vehicle financing, credit card repayment, repaying loans and other debts.

Loan Repayments:

The amount that you can borrow may be easily determined by the interest rate and the loan term that you sign up for. As the rate of interest falls, your repayment amount also gets lower. By opting for a short-term loan, you’ll end up saving much of the loan interest. You must accept a loan repayment term that matches your financial situation.

Living Costs:

Your loan application only gets approved when your lender does through your living costs. School fees and cost of child care are among charges that increase your living cost. Once the lender is able to identify your borrowing capacity, it becomes much easier for you to sort out these expenses. Even after maintaining a certain living standard, you’ll need to work towards repaying the mortgage.

Credit Rating:

Your credit rating is certainly an important factor that determines your borrowing capacity. By proving your worth as a reliable borrower, you’ll be able to convince the lender for a much higher loan amount. However, you’ll also need to repay the loan amount within the specified time-frame. Your loan application may be rejected after you’ve defaulted on repaying your utility bills and credit card bills in the recent past. Before even visiting a lender, you must check out free copies of your credit report for free from each of the 3 credit reporting agencies. All of the red flags appearing in your credit reports need to be compared and the discrepancies need to be resolved in any.



Asset Evaluation:

In an attempt to identify your actual loan requirement, a lender can run a credit check on the assets owned by you. All of the vehicles that you own as well as your investment options might affect a lender’s decision. These factors hold considerable ground in determining your loan requirement.

Keeping these factors in mind, you’ll need to work on all areas of opportunity just to enhance your borrowing capacity. This way, you’ll have more options of comparing loan and fresh job offers that come your way.


Tips to Earn More Than What You’re Doing Right Now

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Financial crunches may appear all of a sudden. Certain unforeseen circumstances may compel you to land up in a financial crisis. You might need to pay off a utility bill, buy a gift for a loved one or pay off your debt all of a sudden. You may choose to pull out of debt and feel comfortable financially even after putting in a minimum effort from your side. But for this, you’ll need to do an extensive research and gather quality information.

1. Secure a Temporary Job

There are a few temporary agencies that hire and place skilled workers with client organizations that seek short-term assistance. Apart from offering a good pay package, these jobs tend to explore the full potential of an employee who’s prepared to work for full-time.

2. Start Selling All Unused Things

There are a number of channels that enable you to sell off your appliances, electronics, toys, and clothes without any apprehension. You may even consider checking out the local flea market for renting out a hand-picked space and hosting any garage sale if you really wish to remain traditional. You may even check out your opportunities online if you’re going to use your desktop. These days, you’re bound to come across a number of e-commerce sites like Amazon that have categories to get your products listed over the internet.

3. Opt for Babysitting Services

You may opt for babysitting and pet-sitting jobs whenever you’re free. You might be surprised to find some opportunities coming up near your residence. There are a few good websites that will help you catch up with such opportunities from time to time.

4. Work from your Desktop Computer

There are a number of jobs that you may do from home in this digital age. Apart from being a developer, you can work as a professional blogger, tax consultant, online tutor, and virtual assistant. There are also a few survey sites and data entry websites that offer you cash.

5. Choose Any Seasonal Job

A number of swimming pools and amusement parks tend to offer fresh opportunities to summer jobseekers during the warm summer months. A fun-filled environment with flexible working hours is what you get in return. On the contrary, if you’re looking to earn quick cash, you may choose to explore the retail stores during the winter holidays. You may certainly be able to enjoy flexible working hours with a few seasonal positions.



6. Rent out Your Car

This is for those of you that haven’t been using their cars too often. You have this option of renting out your car. You must acquire more knowledge on how much coverage you ought to seek for your vehicle when it’s not going to be used more frequently. You must protect yourself from landing up in situations wherein you need to spend more towards repairs.

7. Participate in Market Surveys

There are a few organizations that pay more to know your opinion. You’ll certainly be able to earn more by participating in their market research programs. Once you start accumulating cash, it will be easier for you to spend more money in a beneficial way. You may check out options like that of the free-rewards account to keep your money. This way, you’ll gain more chances of acquiring extra funds in the future.


Finding A Career That Gives You Financial Stability And Happines

Financial Stability

The trickiest part of career-hunting is finding a job that gives you the perfect balance between financial stability and happiness. Of course, many people think that you have to settle for one or the other, but there are often more options out there for you than you might realize. You might just need to widen your job search a little further. You need to consider your personality, interests, academic abilities, and general skillset. Once you’ve done that, you’ll have an idea of the perfect career for you. If you need some assistance then here are some ideas for careers that will give you both financial stability and happiness (depending on your preferences in terms of industries and types of jobs).

Careers for organized and analytical people.

If you find joy in a structured and organized life then you should search for a job that lets you channel this mindset. After all, you won’t be able to function in a job if you feel like it’s a messy and unstructured role. Luckily, there are plenty of careers out there for organized people that come with a decent salary. If you’re technologically-minded then you might want to look at job opportunities in web development. They’re well-paid careers that offer you the opportunity to analyze information and work in a structured environment. Coding is very analytical, structured, and straightforward (of course, it can be a bit of a headache to learn).

You could also look into career paths as an assistant or a secretary for companies. They often come with fair salaries and decent company perks. You’d have the chance to schedule appointments, make travel arrangements for your employer or their clients, and deal with all manner of people on the phone. It’s the perfect type of job for somebody who thrives on organizing things. You might even want to consider a career as a virtual assistant if you’d want to do the same kind of work from home. Whether you’re an introverted or extroverted individual, there are plenty of job opportunities out there for people with an organized mindset. In all industries, there are businesses that need professional help to keep their information and appointments well-organized and structured.

Careers for sociable and outgoing people.

If you’re an outgoing person then you probably want a career that lets you get out there, meet people, and do things in the real world. You probably don’t want to be cooped up in an office cubicle with very little human interaction. Fortunately, there are many sociable career opportunities out there that come with a stable income. You might want to consider a job as a recruiter for a company. That heavily involves socializing with candidates who might be able to potentially fill a role for a business. It also comes with a very nice wage.

Perhaps you’re an avid traveler, so you might have found yourself looking for jobs that offer a lot of paid leave (that gives you time to travel). But you could simply look for a job that involves traveling. There are plenty of well-paid careers that fit this description. You could work on a cruise ship and have fun sailing around the world and stopping at different destinations. It might not be the biggest salary in the world, but it pays in the fact that you’re visiting different destinations as part of the job (it’s technically “free travel”). Of course, there are other career options in the travel industry. You could work for an airline, as an example. You might even want to look into different aviation colleges if you’d consider working as a pilot. It requires real studying, but it’s worth the hard work. It’s a career that pays very well, and it’ll perfectly suit somebody who wants to see the world.

Careers for ambitious people.

If you’re a business-driven individual then you should be searching for a career that allows you to progress through the ranks of a company, depending on the type of industry that interests you. Of course, there are many career paths for ambitious individuals that apply to all industries. If you like charming clients then you might want to consider pursuing a career as a client success director. Again, you might have to climb the ranks to reach that point, but it’s a job role that provides a decent salary. A career in sales is another option that suits ambitious people. Career progression all depends on your ability to live up to expectations to sell goods and services. If you’re ambitious then you’ll quickly progress, and it can be a very well-paid career when you account for bonuses such as commission.

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Five Personal Finance Habits That Everyone Should Follow

personal finance habits

 

To begin, let’s figure out what a financial habit really means. To put it simply, it’s your attitude towards your own money and how you spend it. Every day we decide whether to spend or save. Not everything we splurge our money on is really necessary. If after a purchase you ask yourself why you need this thing at all, it was probably a bad financial decision. With this being said, a good financial habit is a custom that helps add more money to your bank account every month.

It’s not that difficult to develop good financial habits. The very first thing you need to do is admit that you have bad spending tendencies that will hurt you financially in the long run. These include the inability to control your income and expenses, impulse buying, and delaying payments on bills and credit card until the last minute.

Want to get your finances in order? Here are five useful financial habits that will help save your budget.

1. Keep track of your finances

You need to have a clear idea of how much you earn, taking into account all sources: salary, bonuses, deposit interests, etc. and how much you spend: loans, utilities, food, entertainment, etc. You’re not required any expensive software or special skills to keep such account. All you need is an aspiration to take your life under financial control and a notebook with a pen.

2. Learn new things

As they say, you’re never too old to learn! And what’s really important to your daily life is that you learn about things that help you become financially independent. This can be getting a new profession or developing skills for your current job that will aid in boosting your salary. Be sure to allocate at least 5% of your income for this purpose. Perhaps you will need to take some courses or classes, but in the long run, it will be totally worth it.

3. Don’t make impulsive purchases

Under the influence of flashy advertisement on TV or on the internet, or if we see a sale in a store, sometimes we succumb to the temptation to buy things that we don’t really need. It’s best to wait a few days before parting with your hard-earned money. Sometimes even two days are enough to understand that you can easily do without such a purchase. However, if after a week or two you still crave for this thing, then you may actually need it.

4. Put some money in a saving bank account

It’s a very useful habit to deduct 10-15% from your salary and put it in an interest-bearing deposit. It’s better to do this on a day when you receive your salary, so it’s easier to part with the money. You can also set up an auto transfer from your regular to saving account. If you’re looking for a bank to accommodate your money but don’t have time to visit financial institutions in person, you can easily open bank account online.



5. Pay utility and credit card bills on time.

When you don’t put your financial obligations on the shelf, you will be able to avoid fines and interest. It’s better to pay bills on the payday or set up auto payments on your credit card. If you follow these simple rules, you will easier understand how much money you can spend for the next month.

Financial discipline is a pipe dream for many people. However, there are lots of easy-to-follow financial tips out that that can help you save the big bucks. Try out some of these tips and you’ll see how effortlessly you can boost your bank account.

 


What to Do After Your Trust Deed Ends

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Once your trust deed has come to an end, you’ll receive a formal discharge letter from the trustee and your details will no longer be on the Register of Insolvencies.

Trust deeds usually last for three or four years and once the time period is up, any unsecured debt included in the agreement that remains is written off. Your creditors can’t chase you for these amounts – they also can’t pursue you during the term of the agreement either. There’s lots of information online if you want to find out more about trust deeds.

You’ll feel free, so keep up the good work

You’ll feel like you’ve really achieved something, and you really have. Being in debt is scary and many people despair of getting out of it, so you should be proud of yourself. It takes dedication to pay off large debts and now you’ve freed yourself, you need to look to the future.

You need to check your credit file to make sure it’s been updated

When you enter a trust deed, which is formal insolvency, your credit rating takes a beating. Your trust deed will be on your file for six years after it starts, so you need to ensure that the credit reference agencies know yours is over. This means that when the six years are up, it’s removed from your file.

Usually, this deletion happens automatically, but you need to check with the three main credit check agencies to make sure it’s been marked. If this doesn’t happen within three months of the end of the agreement, you can write to your creditors to request the necessary notifications.

You need to rebuild your rating

You won’t have been able to borrow any money during the term of your trust deed – it’s one of the conditions – and formal insolvency does affect your credit rating badly.

When you apply for credit again, you may see that your interest rate is higher than normal to reflect the perceived risk on the part of the lender. You can rebuild your credit rating, though.

You can apply for a credit-builder credit card. These also have a high rate of interest, but if you pay off your debt each month, on time and in full, you’ll be showing you can be trusted. Eventually, you’ll be able to apply for mainstream cards with lower interest rates.

Prepaid cards are also very useful because you can use them in the same way as credit cards, but it’s your own money you’re topping them up with. The credit reference agencies find out that you’re topping your card up regularly, which works in your favour.



You can save the money you used to make your trust deed payment

This makes great sense because you’ve been managing well without it for a while, so why not invest it in your future? You don’t have to invest or save the whole amount if you want to have a bit more disposable income, but as long as you’re saving something, it’s all good. You’re building up a cushion of savings that will help to protect you from debt in the future.


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