Avoiding Bankruptcy - How To Avoid a Financial Problem

Bankruptcy may seem like a quick and relatively easy fix to a big problem, but it isn't. First, it can haunt your financial life for a decade or more, keeping you from owning a home, buying a new car, or even living the life you really want.

Maybe you're debt is beginning to weight you down. It's not to late t change some bad habits and reverse your financial woes. How can you avoid bankruptcy? Here's a good place to start:

Get Control of Your Spending:
Less than 43% of Americans today have more than $1,000 saved for a rainy day. Living paycheck to paycheck is a dangerous, considering that emergencies happen every day. Cars break down; people get hurt and miss work; unexpected pregnancies force women out of the workforce, and more. If you're struggling to pay your bills now, imagine the chaos an unexpected layoff would cause.

Sure, not everyone has the ability t save a large chunk of their salary, but almost everyone can put $5, $10 or even $15 a week away in a savings account. The key to living under your means, and avoiding bankruptcy, is creating a workable spending plan (ok, a budget), and stick to eat. First figure out the things that are essential; place to live, food to eat, a way to get to work, etc. Now, this doesn't mean that you need to live in an $1800 a month condo if you make $23,000 a year. It means finding an apartment or home that you can afford; a reasonably priced car (or take the bus), and regular old jeans, not the designer kind.

Remember, the point here is to spend less than you make, and that will mean sacrifice of some type. How much sacrifice depends on how far over your income your spending has become. Once you've figured out your necessity spending, then you can take a good hard look at your non-essential spending habits and limit that to what you can reasonably afford and still be able to have enough left to pay down your current debt and save for an emergency.

So, how much should you be spending? Most experts agree that a sound-spending plan should consist of the following ratio:

-35% of your net pay for housing costs (rent, utilities)
-15% for transportation ( car payments, gas, maintenance, insurance)
-15% for debt (credit card payments, student loans, personal loans, etc)
-10% toward savings
-25% for everything else (clothes, food, fun)

Following this ratio should allow you to live a comfortably debt-free life, freeing you of he worry of bankruptcy in the future.

Debt Consolidation:
Ok, so maybe it's too late to prevent financial trouble - you already have it. How can you stave off bankruptcy in order to get your financial house in order? If you own your home, and you're able to handle the payments, causing your home equity to consolidate your entire debt into one long-term loan may be the answer. Be careful though. Until you break the spending cycle that got you into trouble in the first place, this is only a temporary solution that can ultimately mean the loss of your home if you continue to wrack up debt after the consolidation is complete. If, however, you're prepared to pare back your expenses and attack your debt head on, then this may be a great way to buy a little time and keep creditors in check.

Debt Settlement:
Sometimes, even the equity in your home is gone and the well is simply dry. Creditors hate bankruptcy since they either never reclaim any of what you owe them, or get pennies on the dollar through payment options. So, once bankruptcy has become an option, contact your creditors and see if there's a possibility you can settle some of your debt in order to help you avoid bankruptcy altogether. Many are more than happy to forgive up to 60% of your current debt if they are guaranteed they'll get the last 40% in a timely manner. Be prepared, however, to prove your case. Face it, you haven't been very responsible thus far with your spending, or your bills, so they'll need a little convincing that things have changed and that you are indeed working hard to make things right.

Credit Counseling:
Oftentimes, people get into financial trouble simply because they don't know any better. Credit counseling can be a wonderful resource to help you get your spending under control, learn to live on a budget and handle debt settlement and consolidation for you. Just be sure that you choose a reputable service that has a proven track record.

While bankruptcy may seem like the best solution when creditors are calling every hour of the day or night, but, bankruptcy can often be avoided with a little ingenuity and some hard work.

Bankruptcy may seem like a quick and relatively easy fix to a big problem, but it isn't.

How To Use Brainstorming To Solve Your Money Problems

Advertising executive Alex F. Osborne first coined the word “brainstorming" in the early 1940’s. Since then literally millions of ideas, products and services have been created.

Every institution from Fortune 500 companies to Universities and Government agencies, have used the principle of brainstorming.

Fact: For every product in your home or office, chances are a person or group of people brainstormed about it.

They brainstormed on how best to create, market, sell, manufacture, advertise, or distribute it. This is how powerful brainstorming is.

One of the best things about brainstorming is that it can be used by anyone. You don’t have to be a C.E.O or army general. You can gain from brainstorming if you’re a housewife, janitor, student or unemployed.

Yes, you can use the principles of brainstorming for the largest project or the smallest project.

You can use it to plan a million-dollar ad campaign, or use it to plan what you’ll have for dinner tonight.

Practice the following steps. You'll soon be amazed at the ideas and solutions your fabulous brain will give you.

7 Steps For Effective Brainstorming Sessions

1. The brainstorming session can be done with one person or one hundred people. The rules are the same. The only requirement is the participants should know about the problem, business, product or subject of the brainstorming session.

2. Don’t use critical thinking. Critical or judgmental thinking slows down or kills the creative process at this stage. Because as hard as you may try, you can only think one thought at a time. When your creating you can’t judge and when you judge you can’t create.

3. Keep the session light, loose and free spirited. Humor has been known to help oil the wheels of our creativity. A large portion of our creativity is released through our humor.

4. Make sure you have a pencil and paper to write down any and all ideas, or if you’re in a group, designate someone to write down the ideas.

5. It’s best to set a minimum length of time or amount of ideas you want to get out of each brainstorming session. Setting a goal helps everyone to focus; it also helps everyone avoid wandering minds.

6. Write down the problem, the goal, or the subject at the top of a piece of paper. For example, “Ways To Attract More Customers". Next number each idea you or the group comes up with. Write down every idea, the good, the bad, and even the ugly. Remember, the goal is to get as many ideas listed on paper as possible.

7. Next evaluate the most do-able ideas and take action.

That’s the 7 tips for effective brainstorming sessions. Follow them and watch the ideas flow.

Financial Problems

If the "buy now-pay later" way of life has left you facing a mounting pile of bills each month, you're not alone. Today, millions of Americans are having difficulty paying their debts. Most of those in financial distress are middle income families with jobs who want to pay off what they owe.

If you are having financial problems, it is important for you to act now before those problems get worse. Doing nothing can lead to much larger problems in the future -- even bigger debts, the loss of assets such as your house, and a bad credit record.

The good news is that there are solutions. There are ways to help improve your relationships with creditors, reduce your debts, and help you manage your money. In brief, these solutions can help give you a new, fresh start. First, let's see how bad your problems are.

Financial Fitness Checklist

To find out just what kind of financial shape you're in, answer the questions in the following Financial Fitness Checklist.1 If you're married, print this out and take it home so that you and your spouse can work together to answer the questions. Make a note of how many questions you answer yes to.

1. Are you using more and more of your income to pay your debts?
2. Do you make only the minimum payments due on your loans and credit cards each month?
3. Are you near, at, or over the credit limit on your credit cards?
4. Are you paying your bills with money intended for other things?
5. Are you borrowing money or using credit cards to pay for things you used to buy with cash?
6. Do you often pay your bills late?
7. Are you dipping into your savings to pay current bills?
8. Do you put off visits to the doctor or dentist because you can't afford them?
9. Has a collection agency called recently about overdue bills?
10. Are you working overtime or holding a second job to make ends meet?
11. If you or your spouse lost your job, would you be in financial trouble right away?
12. Do you worry about money a lot?

If you answered "no" to all questions on the Financial Fitness Checklist, you're the picture of financial health.

One or two "yes" answers, while not necessarily a sign of impending doom, can be a warning sign of potential problems. Before things get any worse, take time now to draw up a realistic budget (including a savings plan) or to revise your spending plan. Cut back on your use of credit cards, and watch closely for other signs of financial trouble.

Three to five "yes" answers could mean that you're heading for financial trouble. It's imperative that you get your spending under control right away. If you don't have a monthly budget, draw one up and follow it. Put away your credit cards and cut out all unnecessary spending until you can answer "no" to all the questions on the Financial Fitness Checklist.

If you answered "yes" to more than five of the questions on the Financial Fitness Checklist, you may already be in serious financial trouble. But don't despair. Financial counseling can start you on the road to financial recovery.

Road to Financial Recovery

If the Financial Fitness Checklist indicates you are heading for financial trouble or already in it, immediate action is in order. Eight different organizations concerned with consumer and credit issues worked together to develop the following guidance for people like you.2 Free or low-cost personalized counseling is available through your Employee Assistance Program or a private non-profit organization in your area.

What You Can Do for Yourself

Review your specific obligations that creditors claim you owe to make certain you really owe them. If you dispute a debt, first contact the creditor directly to resolve your questions. If you still have questions about the validity of the debt or the collection practices, contact your state or local consumer protection office or state Attorney General.

Contact your creditors to let them know you're having difficulty making your payments. Ideally, this should be done before a payment is late or missed. Tell them why you're having trouble -- perhaps it's because you or a spouse recently lost a job or have unexpected medical bills. Try to work out an acceptable payment schedule with your creditors. Most are willing to work with you and will appreciate your honesty and forthrightness. Many have "hardship programs" which provide for adjustment of payments for a period of time.

The Fair Debt Collection Practices Law prohibits a debt collector from showing what you owe to anyone but your attorney, harassing or threatening you, using false statements, giving false information about you to anyone, and misrepresenting the legal status of your debts. Remember that under other federal laws to collect debts, creditors cannot seize most government assistance and can only garnish a portion of wages to collect debts.

Budget your expenses. Create a spending plan that allows you to reduce your debts. Itemize your necessary expenses (such as housing and health care) and optional expenses (such as entertainment and vacation travel). Start a savings plan so that funds are available for unforeseen but essential expenditures. Stick to the plan.

Try to reduce your expenses. Cut out any unnecessary spending such as eating out and purchasing expensive entertainment. Consider taking public transportation rather than owning a car. Clip coupons, purchase generic products at the supermarket, and avoid impulse purchases. Above all, stop incurring new debt. Consider substituting a debit card for your credit cards.

Use your savings and other assets to pay down debts. Withdrawing savings from low-interest accounts to settle high-rate loans usually makes sense. Selling off a second car not only provides cash but also reduces insurance and other maintenance expenses.

Look for additional resources from governmental and private sources for which you may be eligible. Government assistance includes unemployment compensation, Aid to Families with Dependent Children (AFDC), food stamps, low-income energy assistance, Medicaid, and Social Security including disability. Other resources may be available from churches and community groups. Often these sources are listed in the Yellow Pages of your phone book.

"Looking closely at our options helped us realize that we still needed to try self-budgeting before taking more extreme measures. We think that perhaps we were giving up too soon." Alicia A.

What Others Can Do for You

Credit Counseling. If you are unable to make satisfactory arrangements with your creditors, there are organizations that can help. An organization that you can call is a Consumer Credit Counseling Service (CCCS) agency. These local, non-profit organizations affiliated with the National Foundation for Consumer Credit (NFCC) provide education and counseling to families and individuals.

For consumers who want individual help, CCCS counselors with professional backgrounds in money management and counseling can provide support. To promote high standards, the NFCC has developed a certification program for these counselors. A counselor will work with you to develop a budget to maintain your basic living expenses and outline options for addressing your total financial situation. If creditors are pressing you, a CCCS counselor can also negotiate with these creditors to repay your debts through a financial management plan. Under this plan, creditors often agree to reduce payments, lower or drop interest and finance charges, and waive late fees and over-the-limit fees.

According to the NFCC, about 35% of those counseled are able to help themselves after budget counseling sessions; 30% require a debt repayment program, 7% are referred to legal assistance, and 28% are referred to other resources (e.g., programs for treating compulsive behavior such as alcohol, drug or gambling problems) or decide not to participate at that time. About 65% to 70% of the individuals who start the debt repayment plan complete it successfully.3

After starting the debt repayment plan, you will deposit money with CCCS each month to cover these new negotiated payment amounts. Then CCCS will distribute this money to your creditors to repay your debts. With more than 1,100 locations nationwide, CCCS agencies are available to nearly all consumers. Supported mainly by contributions from community organizations, financial institutions, and merchants, CCCS provides services free or at a low cost to individuals seeking help. To contact a CCCS office for confidential help, look in your telephone directory white pages, or call 1 (800) 388-2227, 24 hours a day, for an office near you.

"I cannot tell you how happy I am to finally be able to control my finances now that I have followed a budget. So far, so good. I actually have a balance in my savings account!" Rodney O.

Personal Bankruptcy. Bankruptcy is a legal procedure which can give people who cannot pay their bills a fresh start. A decision to file for bankruptcy is a serious step. You should make it only if it is the best way to deal with financial problems.

There are two types of bankruptcy available to most individuals. Chapter 13 or "reorganization" allows debtors to keep property which they might otherwise lose, such as a mortgaged house or car. Reorganizations may allow debtors to pay off or cure a default over a period of three to five years, rather than surrender property.

Chapter 7 or "straight bankruptcy" involves liquidation of all assets that are not exempt in your state. The exempt property may include items such as work-related tools and basic household furnishings, among others. Some of your property may be sold by a court-appointed official or turned over to your creditors. You can file for Chapter 7 only once every six years.

Both types of bankruptcy may get rid of unsecured debts (those where creditors have no rights to specific property), and stop foreclosures, repossessions, garnishments, utility shutoffs, and debt collection activities. Both types also provide exemptions that permit most individual debtors to keep most of their assets, though these "exemption" amounts vary greatly from state to state.

Bankruptcy cannot clean up a bad credit record and will be part of this record for up to ten years. It can, for example, make it more difficult to get a mortgage to buy a house. It usually does not wipe out child support, alimony, fines, taxes, and some student loan obligations. Also, unless under Chapter 13 you have an acceptable plan to catch up on your debt, bankruptcy usually does not permit you to keep property when the creditor has an unpaid mortgage or lien on it.

Bankruptcy cases must be filed in federal court. The filing fee is $160, which sometimes may be paid in installments. This fee does not include the fees of your bankruptcy lawyer.

Choosing a bankruptcy lawyer may be difficult. Some of the least reputable lawyers make easy money by handling hundreds of bankruptcy cases without adequately considering individual needs. Recommendations from those you know and trust, and from employee assistance programs, are most useful.

Some publicly funded legal services programs handle bankruptcy cases without charging attorney fees. Or these programs may provide referrals to private bankruptcy lawyers. Keep in mind that the fees of these attorneys may vary widely.

"Our bills have been a source of worry to us. After bringing our problem to credit counselors, we have begun to feel there is a way to cope with it. We are feeling more confident now." Nelson M.

Possible Pitfalls

You may encounter credit counselors who aren't helpful. For-profit or non-credentialed counseling organizations often make promises that they cannot or do not keep. Be especially careful when asked for a large sum of money in advance. To check the organization's reputation, contact your state Attorney General, consumer protection agency, or Better Business Bureau.

"Credit repair" clinics and "credit doctors" have been frequently criticized for promising that they can remove negative information from your credit report. Accurate information cannot be changed. If information is old or inaccurate, you can contact a credit bureau yourself and ask that it be removed.

Risky refinancing options. When already in financial trouble, second mortgages greatly increase the risk that you may lose your home. Be wary of any loan consolidations or other refinancing that actually increase interest owed or require payments of points or large fees.

A Final Word: Don't lose hope, even if you despair of ever recovering financially. You can regain financial health if you act. Pursuing the options presented in this pamphlet can put you on the road to financial recovery.

"It feels great to be getting my life (and credit) in order!" Robyn H.

Security Concerns

An individual who is financially overextended is at risk of engaging in illegal acts to generate funds.

Amount of debt determines, in part, how stressed and desperate a person is as a result of financial problems. However, what caused the debts and how one deals with these financial obligations tells more than amount of debt about a person’s reliability, trustworthiness, and judgment.

If a person is not at fault for the financial problems and is dealing with them in a reasonable manner, security concern is substantially alleviated. On the other hand, debts caused by irresponsible or impulsive behavior or by gambling, alcohol abuse or drug abuse are a serious concern. A person who is irresponsible in fulfilling financial obligations may be irresponsible in fulfilling other obligations, such as following the rules for protecting classified information.

Financial stress is common among a large segment of the population. Many immature young persons go through a period of difficulty adjusting to the temptations of easy credit. Most people with financial difficulties do not view crime as an appropriate means of solving their problems, but the few who do are a serious concern. Of recent spies who betrayed their country for money, about half were motivated by some real or perceived urgent financial need, and about half by personal greed.4 Greedy individuals often have a compulsive need for money or goods as a measure of success or as a source of self-esteem, influence, power, or control.

Cash Advances Helping You Meet Your Current Financial Needs

It can be hard to see any way out of a financial situation, which is why we as modern people are thankful for the concept of cash advances. Although it is a short-term loan, it can help in remedying a situation. This method of getting money has indeed helped a lot of people get their financial situations in order.

Cash advances are short-term loans meant to help us in our current need of money. They are the difference between losing your car to the car pound, and getting it out of the car pound on time.

To different people with different and unique situations cash advances can mean a lot. They are the money safety nets to which many people turn

The other notable thing about cash advances is they are relatively easy to get and the money is in your checking account within a few days. Some companies even send the money to your account within 24 hours after your application form has been approved. This is helpful in the way that you do not have to wait around for the money to come when you want to get the bills paid up as soon as humanly possible. So if you do need the money urgently, then you will receive the money more quickly than you might expect.

It’s always nice to get a surprise every now and then, and to receive a cash advance surprise, well that is even better because when you need it cash advances are there to help you out of any financial problem that you may have. They can resolve your financial problems and lay them to rest for at least a while. This will also help you get the peace of mind and to see to other things that are happening in your life. You get the added advantage of getting back the control that we sometimes lose when we are in a financial crisis that erodes our emotions.

FINANCIAL STRESS MANAGEMENT

Most of marriages show that financial problem is the primary cause of stress in a marriage. So, you should deal with them. In such case, you can obtain the effective reference by using lots of books and through both television programs and web sites.

As the basic premise, make a table all your debts and the interest rate you owe on each of them. Start with paying the debts off by making more than minimum monthly payment. It should be started from the highest interest account. And then, you should examine about how you can shift the high interest debt into lower interest debt.

Stress management for financial case will be little bit difficult. Therefore, have a plan to gain extra money to refund your debts. You need to make a record of your each expense as a beginning. After a week, you will recognize how you are expending your discretionary income. It will be a sacrifice at first of forgetting some of those discretionary items. However, the capability for repaying high interest debt is worth it.

So, are you now willing to know more about stress management? I hope these guidelines will make you think and get smart about it!

Watch Your Finances A Relationship Problem Advice

The best thing that you can do is first make sure that you are committed to the concept of your marriage is a good relationship problem advice. Of course, when money and finances are the reason why your marriage is having a problem, you need to get organized and work something out.

So many marriages fail because of fights that start over money issues, and these failures only increase every year. Big financial decisions are often made without the spouse’s knowledge; gambling, debts, and income issues all play a big part in a couple’s marriage. This gets even more complicated when one of the spouses is not working. Financial problems become even bigger.

When it comes to finances in a marriage, the best things that can be done is for your marriage is to make sure that both people are equally involved no matter who makes the best money or if one spouse is not making any at all to make sure finance is not a cause of your relationship problem.

Money matters need not cause a marriage to end. However if you and your spouse find that you are constantly arguing about money matters, all that really needs to be done is for a good accountant and therapist to take over.

Marriage counseling helps many couples learn to deal more effectively with relationship problem advice, and they can help prevent small problems from becoming serious.

Marriages have a better chance of success when the couple goes to marriage counseling. In fact, research shows that marriage counseling tends to improve a person’s overall health and makes the family unit function better as a whole. A good marriage counselor can really make a difference in the worst situations in giving relationship problem advice.
If you want to find a good marriage counselor you can search through your yellow pages, but I would recommend that you search online. When you conduct your search this way, you can also get reviews of the counselor and what their specialties are.

Most counselors do have a specialty of their own. This makes finding the right one that much easier. Just look around and you and
your spouse will soon get your money woes to be gone for good.

Credit Card Debt Problem Solutions

People all around the world are facing this credit card debt problem every second of the day.

Keep in mind that out there somebody might have even harder financial problems and you’re a happy person compared to him.

Eliminating the credit card debt is an important issue for all of us.

What can we do about it ?

How can we handle the situation ?

Actually it’s quite easy. Face the problem and deal with it before it will take over your entire life. You can use whatever method you want to solve this problem just be sure you’ve chosen the right one for your situation.

If you’re confused you can follow these 9 simple steps that will help you getting rid of that unpleasant credit card debt :-

1. Take a pen and a piece of paper and write down some important things as it follows: your credit card name, the balance, the day when you have to pay the bills, APR, your reward points along with their current offers and last but not least the remarks.

2. Put in the table the above mentioned information for all your credit cards.

3. Try to see which credit card causes most of your problems. In other words see which one has a harmful balance and APR.

4. Analyze the reward points because sometimes they can be used to pay some bills or fees. If is possible use them to cover some expenses.

5. Compare you consolidating credit card debt offers and choose the one that suits you best.

6. Get rid of the credit card that’s causing all the damage as fast as you can. (This doesn’t involves throwing anything out on the window)

7. Control your spending behavior because otherwise you might never be able to solve this problem.

8. Think about every financial alternative that will help you earn more money.

9. Enjoy the reduction of your credit card debt and breathe freely when the nightmare is over and you no longer have a financial problem.

These nine guidelines will help you deal with this situation but won’t solve it for you.

You’ll have to keep the final objective in mind and act accordingly.

Just remember a person with no credit card debts is a happy person.

How Do I Know I Need Help In Managing My Finances?

There may be times when things don’t go as well as we’ve planned. It’s important that we look out for warning signs if we need help in managing our finances, particularly our debts. Below are some indicators that should trigger us to seek help in managing our finances:


1. Frequent Arguments over Money

They say that during courtship, the guy would do most of the talking while the girl listens. In the first year of marriage, the wife would do the talking while the husband listens. After a year, both the husband and wife would do the “talking” while the neighbours listen! If you are arguing with your spouse frequently over money, then it’s a sure sign that you are facing some financial difficulties. If this financial problem is not addressed promptly, it may lead to other marital problems and ultimately resulting in a divorce.


2. High Debt-to-Income Ratio

As a rule of thumb, we should limit all our debt obligations to about one third of our take-home income (generally defined as gross income less EPF, tax and SOCSO deductions). What it means here is, if our take-home pay is RM3,000 per month, then our housing plus car loan repayments (including other loans, if any) should not exceed RM1,000 per month. It’s not surprising to find many families having a Debt-to-Income Ratio of more than 50%! This would mean that they’d have less than half of their income left for basic living and child expenses. What about those occasional holidays, gifts, outside dining and entertainment expenditures? Most likely, they’d be forced into taking on more debt through credit card or personal loans. This will result in a vicious cycle and will only get us deeper and deeper into the debt-trap!


3. Maxing-out on Credit Limits

As a result of the above, i.e. when an increasing percentage of our income is used to pay-off debts, we would rely on credit cards. If you notice that your credit balance is increasing each month, this would be another warning signal. If left unchecked, you’d most likely hit the limit very soon and then start maxing-out on the second and third card. Before you know it, you find yourself drowning in a pool of debt. That’s when your “good friend”, Ah Long, will throw you a “float” to “save” you, not realizing that this “float” of theirs is filled with rocks that will weigh you deeper down into the drowning pool of debt! Beware!!!


4. Pay the Minimum Only

Another tell-tale sign is when you start paying only the minimum of 5% on your credit card balances. The balance would normally attract a finance charge of 1.5% per month or 18% p.a. For example, if you have an outstanding balance of RM1,000 and decided to only pay the minimum of 5% or RM50 whichever is greater, the amount of interest charged to you in the first month is about RM14.25 only. You might not think of this as a lot but do you realize that if you continue this payment pattern, it’ll take 2 years for you to fully settle your initial balance of RM1,000? The total interest incurred would amount to about RM173.00. Imagine if the amount is RM10,000 – it will take you more than 7 years to repay and your total interest incurred would come up to RM3,740! Of course, these numbers assume that you do not add-on to your present balance, but how can you be sure it will not happen? Yes… only if you CUT your cards immediately!


5. Always Late in Settling Bills

We are so used to the saying, “Better Late than Never!” However, when it comes to paying our bills, this is not a good sign! Of course we do not need to settle our bills immediately when we receive them but they should be settled by their due dates. If we are chronically late in paying our bills up to a point where late payment penalties are imposed, we need to re-examine our finances. We don’t want to end up in a situation where our electricity and water supply, telephone lines are cut or our cars are being repossessed. So, if we are a little behind most of the time, it’s time to get behind the numbers!


6. Lots of I.O.U.

If we realize that more and more of our relatives and friends are avoiding us, most likely it’s not because we’ve not bathed for a week! Very likely, we have been borrowing money from them and have stacks of “I Owe yoUs” in our drawer! Another early warning sign is when we tend to borrow to purchase things that we used to pay for in cash. This is an unhealthy sign and we not only loose control over our money but also our dear friends and relatives.

We may even owe it to ourselves that long overdue medical or dental visit or even our car service. These are certain necessary expenditures that take a back seat because budget is tight every month and they are deemed not “urgent” yet. Things like these are important and when they become urgent, most often it’ll be too late!


7. Sleepless Nights

This is also known as the “Sleep Test”. Can you sleep well at night or are you having sleepless nights thinking about your money problems? In fact, the more we think about our money problems, the more money problems we would encounter. Your mind attracts the things you think about most and we should focus on the solutions rather than the problems. And one way is to seek financial counseling and get started on a well-designed debt management programme. This is not something that we can “sleep over” and hope that everything will be fine tomorrow. We have to take ACTION now!

If you do encounter any one or more of these warning signs, you should seek immediate help in getting your financial fitness back in shape. Next week, we’d be journeying through “The Road to Managing Your Debt Wisely” and you might want to join us for the ride. Together, let’s “Make Prudent Financial Management A Way of Life!”

Money Can't Solve Poverty!!!

The story of Bonnie and Clyde

If a person is poor in mind and financial education, no matter how much money he has now, he will become poor after all. Bonnie earns as little as Clyde, below the average earning of a typical adult. Bonnie thinks that striking a big lottery will solve her financial problem. As her dream comes true one day, she made a few million dollars out of a lottery ticket. She became rich in cash for several months before she ended up being even poorer than before. Meanwhile, Clyde hasn’t bought any lottery ticket but he is much richer then Bonnie, even though he save money the stupid way. This is the story of Bonnie and Clyde.

The big difference between Bonnie and Clyde is financial IQ.

Why Money Can’t Solve Poverty

If money can really solve poverty, the simple solution is to distribute wealth equally amongst every person on earth. Do you think this will solve poverty? I certainly don’t think so.

The rich people donate a lot. Think of Bill Gates and Warren Buffett. A very big chunk of their wealth is donated to help the world. The money is not simply distributed to the people who are “poor”. It is because they know that giving money to the poor will only accelerate poverty, not solving it.

In fact, money is the root of all evils. And these evils are limited only to the poor. The poor face financial problem because they don’t know how to manage their money. They don’t really need more money (although that’s what they think – more money will solve their problem). What they really need is financial education.

The ultimate solution is financial education

Think of the scenarios discussed below. I bet you will realize why financial education is the best solution to end poverty.

Financial gurus such as Donald Trump and Warren Buffett write books on making money by doing business and smart investment. They want to educate us to increase our financial IQ.

Why isn’t there any curriculum on financial education in our school system? I heard that it is a conspiracy. That’s why Robert T. Kiyosaki is writing a book about it and giving you total access for free.

Ask around the poor people you know, “Do you read personal finance books, magazine, blog or …..?” 99% will say NO. They are too busy (actually it is an excuse). But I do believe them. You stay rich in order to be free. So the poor must be busier than the rich in this sense!

Some of the richest people are born in the poorest family. And some of the poorest people are born in the richest family. Of course, it is also through the other way round. Some people are already born rich, and then become even richer later in their life. This shows that it is not the money you have that dictate your financial status. It is the difference of financial IQ, which is totally linked with the amount of financial education we learn throughout our life.

During a recession, it is harder to find a job, especially for fresh graduates. Rising unemployment rate worsen the situation and most of them will go back to school to get more education. Most of them borrows more money to get educated and hope that when they are going to graduate years later, the economy has already recovered. Do you think they will be better off compared to those who didn’t go back to school?

Again, money can’t solve poverty, financial education does!