Category Archives: Finance

Small Business Finance – Finding the Right Mix of Debt and Equity

With the ever rising cost of living, many people are finding themselves sliding deeper into debt as their finances take a turn for the worse. There are those who are in these situations due to no fault of their own while others have not been able to handle finances and find themselves looking at growing debt. Whatever the reason for your debt you will need to engage the services of a debt management consultant.

Finances are a personal issue which most people prefer not to talk about with others. However if your credit score is going down and your debts are on an upward trend you should consider engaging a professional who will help you reorganize things for the better. A debt management consultant is an expert who has the knowledge and resources to help you deal with money issues. Staying in denial about your financial situation will actually make things worse and make your journey to recovery more difficult and longer.

Most people do not want their financial woes to be known and like all other professional consultants your debt management consultant will not be discussing your issue with others without explicit permission from you. You should therefore provide complete and correct information that will help your consultant understand your case and design a recovery financial planning tips for you. Hiding information will work against you since the plan designed will not factor those bits of information that you have kept to yourself. There is no reason to be embarrassed about financial mistakes, many have made poor financial decisions before and those who decided to work towards recovery are much better for it.

Your debt management consultant will also be instrumental in connecting you to other professionals and resources that will assist you as you work on improving your financial situation. They will help you design a reasonable budget as well as talk to your creditors about renegotiated interest and payment breaks. They will also be able to direct you to institutions that can provide you with refinancing at a reasonable rate. The consultant will also provide you with support and advice as you work on your finances. Most people will be emotionally distraught due to poor finances and having an independent and impartial person walking with them through this tough time is a big plus. It gives you confidence and a determination when you have someone who believes in you.

Finances As It Relates to Depression

You thought the great depression of the 30s was over, didn’t you? And proceeded to live and spend as if there was no tomorrow and as though the coffers would never get depleted. While it is true that the governments and central banks of some countries were carefully monitoring economies, creating new economic policies to prevent similar crises; it still did not stop us from being hit. History does repeat itself, after all.

Now that a second depression is upon us; obviously, the measures taken were not enough. Or, perhaps it is more a question of working within the measures and limits that need to be placed upon us. In any case, we now find ourselves in a crisis situation and are scrambling around to recover from the depression. Our accounting, finance, and the very way of life has been hit and we have to deal with it. All paper investments are becoming lost causes, leaving only the commodities behind. The 1930s depression was largely caused by inflation, gold standard, liquidity etc., whereas today’s depression can be blamed on a decline in productivity, investment, mortgages, outsourcing and unemployment. Underlying all the different c causes is the one factor – – overvaluation. This overvaluation has been on paper assets and mortgages. This is leading to major changes in the way accounting is going to be regulated.

The million dollar question is whether we should depend on economic forecasting. As of now, we are lead to believe that unemployment will see a vast improvement in 2012. It is also believed that the property market will soon stabilize. It is possible the market will never see the kind of phenomenal growth it did in recent years, the housing boom has been a huge factor in this depression. Financial Accounting is critical to withstand this crisis. Rather than depend on forecasts and a blind hope that thing s will change for the better, a serious look at personal and public finances is in order. Recession can be simply a slowdown of economy that seems to be never ending. Cost cutting and saving in every sector may seem like the proverbial drop in the ocean; but, it is a start. Over and above this, managing income is the key. When your capital budget is off-balance; look for the answer in expert accounting and management. You will have to review the costs, assets, inventory, debts, cash flow and work out a structured reorganization of your capital.

In layman’s terms – restructuring involves:
• Get out of debt;
• Tighten your belt;
• Build emergency fund;
• Consult Finance professional

These basic steps ought to hold good for personal finances as well as public, such as financial institutions. It is very easy and most human to adopt an attitude of denial or being selective in what you see and believe. But, it could very well be the cause of your downfall too.

Recession is not selective; but, it does affect most those who are not prepared for that eventuality. In fact, you don’t need to have a recession to re-assess your finances. Even in good economic times, we find ourselves slapped with a sudden outflow of cash. Soon, we forget the shock of that and go back to spending all the spare money. If it is a matter of survival of the fittest, the fittest one would be always prepared; following the Boy Scout’s motto to the letter. The smart one would have a savings buffer that prevents you from seeking a loan each time.

A Financial Consultant would not only manage your current financial state; but, also plan strategically on your future ensuring you remain one of the survivors. Recession can be borne and you can get out of it with your security intact. You may have a leaner portfolio; but, it can be a healthier one.