From Dead Broke to Cash Rich (Part 2)

These are the steps to gain your financial holdings:

1                     Recognise That The Root Is the Problem

2                     Show Me the Money

3                     Open Up

4                     Seek Professional Help

5                     Make Tough Decisions

6                     Keep Daily Financial Records

7                     Avoid Monthly-Instalment Payment Options Like The Plague

8                     Change Your Shopping Habits

9                     Create Multiple Sources of Income

1                     Show Me the Money

a)      Getting organised

a.       People who are organised are less likely to have bad debts. So if you one of those who gets overwhelmed by mounting debt, you probably have all your bills and late payments reminders unopened or even purposely misplaced them.

b.      In the end, you find yourself sinking deeper into debt.

c.       So get those letters out of their envelopes and start organising the bills, and file them into different files.

d.      Keep yourself updated of your debts

b)      Lay it out on paper

a.       This is to write out everything on Paper

b.      Yes, making it on computer on spreadsheets are good, but, provided you are not distracted by anything else on the computer.

c.       What to put down is, your income, Gross and net, and your liabilities, Debts, and expenses.

2                     Open Up

a.       Once you have a clear idea on your finances, it is to share with your family, be it your spouse and children if you are married. If not your parents and siblings.

b.      This is an emotional issue especially for breadwinners, as they are usually are unwillingly to share their situation so they can keep the family of being worry free. However, this can lead to much depression and internal stress as they couldn’t voice out their problems.

c.       With this laid out, at least the family is clear that they should not overspend, and do unnecessary expenditure.

d.      However, there are cases that the sharing got back-fired. If this happens, you know it is not a partner you should keep.

3                     Seek Professional Help

a.       Be it whether with the support of family, there’s another group of people who might be able to help you.

b.      However, do not get trick by designations like “Financial Planner”, who will end up selling only insurance plans to you, or saving plans to you, which ended up you into further debts. As you can see, you are already in financial trouble, why would want to buy more things that you may not be able to pay continuous for the next few decades?

                                                               i.      There are fee-based advisors who charge you for their time and expertise. With a monthly fees, these people look into your finances and determine what needs yur attention. They should NOT be earning commission on the product they recommend.

                                                             ii.      In public social service, there are counsellors from Family service centres (if in Singapore) and debt management facilities, who delivers financial advice. These counsellors are trained to advice you on how to manage debt problems and not how to increase your income or diversify your investments.

                                                            iii.      Your own friends whom you trust and who are better versed in financial matters. Do not forget to offer to pay for their services.

c.       It is true that it may be embarrassing to reveal your financial difficulties, however, things to be done, have to be done.

d.      Many will advise you to block your credit cards to prevent further unnecessary spending. This way you can keep up with your payments without further expenditures, and not damaging your credit report. If need be, you may have to talk to the bank to arrange a better repayment methods.

e.      Remember on top of reducing the expenses on debt and interest repayment, you still have a goal to increase your cash flow.

f.        That’s why the best way to pay your debts is to use CASH. If does not have saving, have to get an extra income or work longer hours for more overtime pay. Of course, sometimes your employer may not allow you to work overtime at all, in that case, it is time to get another form of income than to rely on one employer.

g.       Other than restructuring loans, keep a close record of your daily purchases to the smallest cent. This way, you will find out what spent is unnecessary and be able to cut back on that.

h.      With advice in hand and determination to get and stay out of debt, tough decisions are to be made.

That's a lot of absorb, and a lot to do. START NOW!