Bankruptcy will have a big impact on your finances. Although once you’ve been discharged from bankruptcy (usually after 12 months), you’ll be out of debt and able to look forward to a new start, getting back on your feet financially probably won’t happen overnight.
Because bankruptcy remains on your credit file for six years, you may have difficulty when applying for certain financial services. For example, getting a bank account after bankruptcy could be difficult, as banks could decide to turn down your application once they find you’ve been bankrupt in the recent past.
However, there are ways you could improve your ‘financial health’ as a discharged bankrupt - and get into good money habits for the future.
One of the most successful ways of staying financially secure is by working out how your money is spent every month. Planning a careful budget can be the ideal way of keeping on top of the money you earn and where it all goes, and sticking to it could make all the difference between staying in control of your money and facing more financial trouble further down the line.
1. Work out your monthly income. This should include all the money you receive in your account, such as your salary, any benefits or grants you may receive, and things such as child maintenance payments.
2. List your total monthly outgoings. This should include all your priority expenses - so everything you have to spend money on from month to month: rent/mortgage, food, utility bills, and any other necessary expenses.
3. If you take your total monthly outgoings away from your total monthly income, you’ll be left with your disposable income. As long as you never spend more than this amount on other things, your living costs should be covered every month - and you won’t have to worry that you’re getting into debt.
Managing your money
There are many ways you could help yourself to stay in the clear with your finances. You may find it helpful to:
• Check your bank account on a daily basis so you always know how much money you have in your account at any time
• Set up Direct Debits for your monthly utility bills, so the money will leave your account exactly when it’s due
• Get a bankruptcy bank account - which could help you get back in control of your finances again, even if you have a bad credit history
• Register for internet banking so you can keep an eye on your bank account whenever you need to.
There is a wealth of debt advice available to people who are worried about their debts.
The good news is that in almost all cases, debt advice is free - so if you’re having problems with your debts, you should not hesitate to contact an expert debt adviser to establish the best way of tackling your debts.
When should I get debt advice?
In short, you should get debt advice at the first sign you’re having problems repaying your debts. The sooner you speak to someone who can help, the sooner your debt problems can be addressed.
Even if you’re not struggling now, there could be signs of trouble to come. A few examples might include:
• you have overdraft debts that aren’t going down
• you are only able to make the minimum payments to your credit card debts
• you frequently find yourself spending some of next month’s salary in advance.
If any of these apply to you, you should speak with a debt adviser about ways of tackling your debts before they become unmanageable.
On the ‘other end of the scale’, there are people with severe debt problems. If you simply can’t afford to stay on top of your debts - even if you don’t think you’ll ever be able to repay them in full - a debt adviser could still help you find a solution that will help you clear your debts and improve your financial situation.
Are you currently considering whether or not you are making the most money you can at the moment and whether or not you are utilizing your resources in the wisest way you can to ensure the best possible financial reward for your efforts? Are there occasionally moments when you find yourself watching television even when there is nothing of any real interest on, but just because you simply have nothing better to do? Do you possibly consider money to be something that only primarily comes from a company to an employee and perhaps tend to only operate in that kind of mindset? You may wonder how it is that some people seem to have so many projects going on outside of work and how some of your colleagues at a similar income level as your own in your company seem to be very lucrative while others seem to be less lucrative and also less industrious outside of your company workplace. While this is occasionally because their family is wealthy or possibly due to a past financial windfall, it is often simply due to the fact that people actually have some other monetarily rewarding projects or investments going outside of the company workplace!
In the same way that multiple streams of water can come together to make a river, so also multiple streams of income can make a financially abundant river of monetary success. This is how many of the wealthy people around you that did not come from wealthy families, and even some of those that did come from a wealthy background, are actually making money in addition to the money that is being made doing their simple vocational tasks at a company workplace. Let’s take a look at some of the ways you may be able to make some additional money so you can get some additional streams of income flowing.
One important thing to do as a first step to your personal enterprise is to incorporate as a company rather than just operating as an individual person. This has many benefits which are beyond the scope of this article. Just know that there is a very good reason the corporate structure exists for businesses as it is a great way to make and protect money.
Invest In A Company
There are many types of business investment strategies. One is simply to invest in a company you believe in and help them to launch their visionary goals. Another much safer way is to invest in stocks on an exchange such as the NYSE. Either way there are risks involved, so you should absolutely do plenty of research and be informed.
Start A Small Home Business
You can start a small home business doing just about anything these days. The internet makes it relatively easy. Whether you want to knit some doilies in your free time and sell them on a website, or sell someone else’s collector doilies on an auction site like Ebay, there are many possibilities and it is really up to you to choose a good one that is appropriate to your interests and strengths.
Another way many people make money without a lot of continual daily maintenance beyond the initial purchase is to invest in real estate. If you purchase a place and then renovate and resell it or even rent it out, it can truly be financially rewarding. This is one way that many people have made a lot of money with relatively little daily work.
These are some of the primary ways you can make additional money outside of your workplace, and there are obviously many more. Have fun making more money!
When it comes to your money being vigilant is a must, especially now. With the economy in less than perfect condition, the act of saving can be the difference between affording life’s costs and falling just short of the obligations you hold. Savings can equal a lot of differing scenarios; being able to finance a home renovation for the baby, affording to put your child through college, enjoying semi-yearly vacations, having the ability to retire on schedule, or having none of these things and being up to your eyeballs in debt.
Too many American families are below the average wage requirements to be considered wealthy. With this being said, the average person holds less than five hundred dollars in savings, and many have none. The only way for most people to save is to do it slowly and to plan far ahead of time. This includes retirement.
In most cases timeframes are necessary. With a timeframe in place for your savings you can plan ahead for future events such as college, possible hospital expenses, and lastly, retirement. There are many life events that come long before retirement creeps up. To input a financial timeframe you must do math. You have to make relevant decisions about the future and what you expect to do with your life as it goes along. If you already have children then the planning is easier to develop. Even if you are planning to have children you can determine a hypothetical timeframe by consulting friends and family about what they went through, and speaking with financial planners about average costs.
Your timeframe will be accurate if you subtract your average life expectancy from your current age and plan for those years. Be sure to add a few years for flexibility. You have to consider the monthly bills you will encounter, the healthcare you will need, the normal utilities and costs, ect., and multiply this by the number of months/years you estimate to remain. At first glance this number can seem overwhelming but you have to realize the timeframe that you have to work with. The younger you begin the savings process the better off you will be.
Do you really want to spend another cent on interest being paid to a credit card company that is basically a legal mafia designed and constructed like a spider web to lure the unsuspecting public masses into its insidious feeding tactics? Do you want to contribute another dime to a faceless and loveless organization whose very survival and illusory existence depends on your continued unhappiness? No. Of course you don’t. That is why the credit card should never be your first choice, but should instead always only be used as a last resort.
The check card is a wonderful alternative to the credit card that has been implemented by most western banks today. It provides the same convenience as a credit card and yet it doesn’t carry any of the implications of interest which incur in a conventional credit card situation. The money is drawn directly from your bank account, and usually only the money you currently have in your account is the credit limit assigned to your card. This way you are protected from spending into a debt situation similar to the kind a traditional credit card company would otherwise be enticing you into.
You can usually use a check card just about anywhere that you can use a credit card and, as an added bonus, you can also use it as a debit card at some stores which allow pin code entry and this will generally ensure that no additional hidden fees will be incurred. Using it as a debit card in this way also ensures that the funds will be immediately transferred, which is a good way to protect from spending beyond your account’s currently capability in case you don’t keep good track of your spending. If used as a credit card, the funds may clear in a few days rather than immediately, so it would be possible to be overdrawn on your account if you aren’t watching your balance and spending accordingly.
You can also usually use a check card as an ATM card which means that you can easily make deposits and withdrawals and so forth from any convenient location. This makes it really easy to spend cash when you prefer to and also makes it easier to avoid overspending, and is obviously important if a shop only accepts cash. ATM’s seem to be just about everywhere now, so it is very convenient to shop in most areas.
There may be some occasions where a conventional credit card still comes in handy. It is certainly a great backup to have in any situation. There are certain businesses which sometimes prefer a credit card for renting items such as vehicles, yet they will usually still rent to check card users. They may, however, request a cash deposit to be held on the account to ensure the safe return of the vehicle and it is a rather easy process. Be sure to plan ahead and have sufficient funds available for a deposit if planning to rent a car on a trip or similar. It is wise to contact the rental agency in advance and ask about their policies on the subject.
Say you have some extra savings now that you have cut back on your expenses and you are trying to cut down on your credit card debt. Which credit card should you pay off first? There is a lot of chatter around the Internet about this. Here are my tips:
First, make sure you don’t miss any monthly payments. The penalty for missing a payment is always the worst so this should be the first thing to do.
Second, in general, pay off the card with the highest APR since this is the card you are paying interest on. This is what you should default to. There may be reasons why you shouldn’t necessarily do this. If you can, it may be best to pay off a card fully that has a small balance on it. This make sense especially if the APR on this card is similar, just slightly less than your card with the highest APR. Also, by having a $0 balance on that card, it may increase your credit score, which would then decrease the APR you would pay on other credit cards. It has been reported that it is beneficial to not have too many cards with balances on them, so if you have a balance on one less card, all the better.’
Another reason for paying off a card with a small balance is the emotional satisfaction of getting rid of one more debt. Keep in mind this is just an emotional feeling though and doesn’t necessarily translate into any more fiscal health!
One thing to keep in mind is to see if a card is about to balloon APR on you. If, for example, you did a 0% interest balance transfer on a card, and in a month, that card’s APR is going to 20%, it’s time to start paying off that card (assuming that card’s soon-to-be APR is higher than your highest APR card). In this case, you are basically paying off your highest APR before it has a chance to bite you!
If you’re someone just fresh out of a job or having trouble making you rent, you might be surprised to hear that making money is not nearly as hard as it seems. Don’t get me wrong, it’s certainly not easy and requires a lot of hard work, but becoming a millionaire is not this impossible dream that is out of reach of anyone. All you have to do is believe that you can make a million dollars.
Here’s a general outline for how you can make a million dollars pretty easily (by which I mean a few years of working every day, but hey, you thought it was impossible so this is pretty damn easy):
1) Believe you can. You can’t make a mill;ion dollars until you get it through your head that you can do it. If you don’t believe it, even if someone gives you a million dollars, your head will think up reasons why it shouldn’t be yours. Stop that!
Your head is only so big, so if you’re thinking about ways why you can’t make a million dollars, you’re not going to be thinking of ways to make a million dollars, which is what you want. You need to think about stuff in order for it to happen.
2) Look for a need to fill Money doesn’t just come to you straight up, you actually do have to do something to get it. The good news is money comes in an often disguised form - that of other people’s problems. If you can solve someone’s problem and fill their need, then money will pretty much fall into your hands.
This is where part 1) becomes pretty relevant. If you’re the guy complaining about problems and not thinking about ways to fix other people’s, you’re gonna owe people for fixing your crap. Don’t be the whiny guy who can’t get things done. Remember, the person who does it gets paid.
3) Fill the need Once you’ve discovered a need, just shut up and start figuring out how to fix it. It’s easy to be all picky and say why you can’t do it or why it’s not your responsibility. Don’t even think or say that. Just do it. Fix the problem. Once it’s fixed, ask the person the amount they feel that was worth and that they should give you. And take the money with the assurance that you have created value for someone and the world is the better for it.
4) Repeat steps #1-3 until you have a million dollars Not that hard really
Throughout most of your upbringing, your parents have probably stressed how important it is to save money and to have a budget, so that the money you save can last for the rest of your life. While the logic does make sense, it doesn’t seem to acknowledge that the world is full of abundance. Why would you save money when it’s lying around everywhere? Just spend it and make more! Let’s examine a few irrefutable facts:
Saving money sucks
If you have $1000, the maximum you can save is $1000. Of course, you can’t actually even save all of that, because that $1000 was doing something (otherwise you wouldn’t have been spending it in the first place). Maybe you’ll have to sit in economy class instead of first class when you fly. Or maybe you’ll have to eat $1 grapes instead of $2 grapes Or maybe you can find the $1 grapes that are the same as $2 grapes but you’ll have to spend an extra hour doing it.
Whatever the cut you make, for that money you are saving, you are giving up something of value, be it time, happiness, or something yummy. You spent it for a reason - cause you wanted whatever it can buy. If you’re going to save, that means you have to give something up.
I don’t know about you, but I don’t really like to give things up.
You can make more than you can save
So let’s get back to the $1000 thing. If you got $1000, that’s the absolute maximum you can save - if you chose to give up the activity/thing that you spent it on. Even after all that loss, all you can save is $1000.
Now if we take a look on the making money side, there’s no limit to the amount of money you can make. You make a website and sell it, boom, you’re $1000 richer. You promote your website that has good content, boom, another few thousand. You see someone with good food and not selling it well, another chance to make a ton of money. It’s pretty unlimited and is only bound by your imagination.
So do you want to save that $1000, or figure out how to make whatever amount you want?
It’s not like people haven’t already done it before!
As of 2009, getting a loan from a bank to start a business is almost an impossible task. Even at nearly 0% federal rate, banks are still not making any loans. So if you’re strapped for cash, you might want to turn to preapproved sources such as your credit cards.
A Source Of Cash
The great thing about credit cards is that banks tend not to decrease your credit line, but only increase your interest rates. So whenever possible, you should attempt to increase the available credit on your credit card, just in case you might need it some day. It’s a great way to get a source of cash when you need to with very low monthly minimum payments.
A Low Interest Loan
Oftentimes, credit card companies send you offers for balance transfers at extremely low interest rates. For example, about a year or two ago, I got a balance transfer offer from Capital One for just 3% for the life of the balance.
If you’re borrowing at only 3%, you can invest in almost anything and get a higher return than that! Hey - it’s just free money lying around, when not take it?
Furthermore, the minimum payment is just around $40/month, so it’ll take me years to pay that off, gaining interest on the loan this whole time!
Make sure to watch out for these opportunities whenever they arise, as credit cards give you a cheap source of cash that is cheap to finance and great for the long term!
When most people think of risk in terms of their investments, they think of cash vs. stocks. They view their ‘low risk’ holdings as cash, blue chip stocks, bonds and their risky assets as stocks in general, especially small cap stocks. While there is an element of truth in this, a key point in understanding risk is time frame.
It is definitely true that cash is far less risky than stocks in the short term. After all, cash is cash. A dollar today is worth a dollar tomorrow. Whereas with stocks, any one company’s stock can go to zero. While holding a diversified portfolio reduces risk from any one stock, your portfolio can drop by 50% in a year, as happened to most investors in 2008.
The key element of this though is that cash is much safer in the short term. It is very risky though to have strictly cash in the long run. Let’s say you are a 25 year-old saving for retirement. You allocate $500 a month towards savings, putting $500 a month for the next 20 years for retirement. Your choice is stocks, cash, or bonds. You may think you are playing it safe if you just put that $500 in cash every month and conservative if you do a mix, though mainly cash and bonds. In fact, you are doing something that is quite risky. You are making a huge bet that cash will outperform the stock market over multiple decades, which has never been the case. It is true that the daily, monthly, and even yearly swings of the stock market are painful. But if you truly do buy and just hold for decades, you will come out a winner in the long-term. Since your time frame as a 20 something and 30 something saving for retirment is well over 20-30 years, putting your money in anything but stocks is a very poor bet. If you are putting your money entirely into cash, then you are in fact taking a large risk with your money.
If you put your retirement savings in cash instead of stocks for 20-30 years, then you will slowly see your retirement savings dwindle in comparison to what you put in, since inflation will eat away at it. Whereas your colleague who put his money in stocks will see capital appreciation. Your colleageue will have a much earlier and better retirement than you, since you scared yourself out of ever making a decent return on your money.