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Debt Management-Getting the Priorities Straight Debt Management and Collecting Your Debts
Most of us who are very good at managing our own personal and business finances are very poor at collecting the monies that are owed to us. We really hate to find ourselves in the position of being a debt collector.
Because we take our own financial obligations seriously, we tend to think that others do the same. They don't...at least not all of them.
Everybody has at one time or another loaned friends 20 bucks and never seen a penny of it repaid yet, and most likely never will. We all know that. We knew when we made the loan that it was really a gift. Those kinds of things you simple chalk up to experience and move on.
Other loans of substantial amounts that are made to family and friends should, however, have legal documents attached to them. Asking for collateral isn't unheard of, and neither is charging interest.
Advice given by very wise people of the past tells us to simply not lend money to family or friends, and it really is excellent advice. You aren't a bank or a lending institution. You are simply very good at managing your own finances.
If lending institutions won't lend your friends and relatives money, it is for a very good reason. The institutions have information that tells them that they aren't very likely to get their money back. You won't have the information about how they have handled debt in the past or how deeply in debt they are at the present. All you are going to know is what they choose to tell you.
The best answer when friends and relatives ask you to loan them a substantial amount of money is, “NO.” But if you do decide to make the loan anyway, at least make it legal and binding with contracts, collateral, and interest.
See Also:
Paying Off $90000 in Debt in Two Years - Debt Freedom
| Debt Management and Interest Rates Debt Management Correcting the Course
Sailing is a wonderful hobby. Those who have ever been sailing know that getting from point A to point B can be a challenge. There are many things to be considered.
Wind speed and wind direction are two of the main concerns. One can begin sailing from point A toward point B and have everything well under control based upon the current wind speed and wind direction. But wind speed and wind direction are not constants...they sometimes change. When that happens, the course must be corrected so that the boat will arrive at the desired destination.
The same thing is true about debt management and financial planning. The financial equivalent of getting from point A to point B isn't based on wind speed and wind direction. It is based upon income and out-go. When either of those two factors changes a course, a correction must be effected so that the destination can be reached.
If you are already sailing the financial sea with a plan (think budget), course adjustments will be much easier. If you have a budget, then you are in control of your financial boat and can see pretty easily what course adjustment will need to be made when unusual circumstances arise and there is some kind of change in either income or out-go. If you budget wisely, then you already have a built-in back-up system that will get you through a rough patch.
If you've been sailing the financial waters without a plan, then you will likely be in deep trouble when there is a change in either income or out-go. You will probably have to get some outside help to get control of your financial boat. But once you do get control, you will have learned some important lessons and you will be better able to weather the next financial storm. |
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Managing debt is very much like driving a car. When you drive a car, you must know where you are going, keep your hands on the steering wheel, your eyes on the road ahead, look behind you, and watch your speed. That is the way that you control a car, and controlling debt is done in the very same way.
Know where you are going: You and your spouse or significant other need to sit down and define your financial goals so that everybody knows what the destination is. With specific goals in mind, the route to achieving them will be easier to define.
Keep your hands on the steering wheel: The steering wheel of debt management is the family budget. A clear allotment of funds will keep your financial life on the road and going in the right direction.
Keep your eyes on the road ahead: To avoid accidents, you need to be prepared to stop or take evasive action when driving a car. The same is true of debt management. You need to save first and spend second.
Look behind you: We always learn more from the mistakes we have made in the past, and we can learn from the things that we did right as well. Remember where you have been so that you can better see where you are going. Gauging progress inspires us all to do better.
Watch your speed: You don't want to try to go too fast when achieving your financial goals. You need to live well today, as well. But you don't want to poke along in the slow lane, either. Set a speed and stay in control of that speed. Save on a regular basis so that your goals may be achieved...but enjoy the trip, too. |
Related Topics: The Debt Management Trap-Credit Cards,
Singing the Debt Management Blues, Easy Credit and Debt Management
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