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Debt Management

Poor Habits that Lead to Debt

There are a number of poor habits that lead to debt. Have you ever wondered why some people are deeply buried in credit card debt and debt in general while others have clean credit records, despite being on the same economic level? Wealthy and poor people exist side by side and sometimes even the same paycheque and personal situations.

Of course, some people have certain advantages over the rest, especially those who have been born with a silver spoon, or those with better opportunities because of their status and connections. There are also individuals who weather financial storms despite their difficult financial situations an emerged successful because of excellent financial habits. But underlying issues that lead you into deep waster start with poor habits that lead to debt.

What are the poor habits that lead to debt?

Here are habits that can be responsible for huge credit card debt, regardless of the amount of your paycheque or personal situations.

Not using your time wisely

Do you realize the time value of money and its impact on your finances? Procrastination, staying idly and not making full use of your 24/7 body clock deprives you of huge opportunities to earn money. You don’t have to work round the clock. In fact, you can make your assets work for you. It’s not just the money-but your skills and creativity can be put to good use.

The Pareto principle states that the thing you do with 20% of your time in a day produces the biggest chunk of your wealth. While it may not apply in all situations, particularly if you are working in a 9 to 5 job, this theory could encourage you to maximize the use of your time.

For example, if you have an online business, it is important to identify your biggest customers and to devote your time in engaging them; and the people with the same demographics. Full-time employees can set a certain period of time in a day to evaluate their productivity and to evaluate their recent knowledge and skills that they can utilize for self-improvement. With less income, you may be tempted to use your credit card to meet your monthly debt repayments and personal needs.

Taking too much that you can handle

While many people thrive with multi-tasking, it can actually lower concentration and the quality of work. Less work done could mean less income. Instead of doing this, you can set a schedule for a specific task; complete it within your allotted period and proceed to the next task.

Let us say you are engaged in small business and you have been doing the books, management and overseeing the productions and marketing. If you don’t have a planner or an app that would remind you every now and then, you may find it difficult to keep up with the demands of your business. You can also hire people to do the work for you. While it may denote additional cost because you have to pay wages, consider it as additional working capital which could yield greater returns in the long run.

The same principle applies to debt; you may think that your income can shoulder the monthly repayments for your credit card debts and other existing loans. But, if your debt takes up more than 30% of your income, and you have no emergency savings fund; it may be difficult to keep up with the payments on time when accidents and other similar situations occur. And more, people who have been handling various types of debt may default on payments simply because there are multiple debts that they need to pay in a month.

Complicated payments may create poor habits that lead to debt

With so many due dates to consider, how can you possibly remember each of them and the interest rates as well as penalty charge they represent?

It is important to choose the right financing opportunity that could help you settle your dilemma on finances. Instead of using your credit cards at the same time, consider other financing options that could help you save more money in the process.

Choosing the safe side

There is nothing wrong with staying in your comfort zone. In fact, most people thrive in a place where they are most comfortable. However, there are times that you need to take a leap of faith to pursue a passion or a new business endeavour that could open windows of opportunities for growth.  It doesn’t have to be a drastic change. Sometimes, a simple adjustment is all it takes to open a new door for improvement, higher pay and a better lifestyle. A sound budgeting plan may be the key to helping you manage your expenses.

Credit card warning signs

Let’s say that you have been using your credit cards to make daily purchases because it is convenient for you and you can keep records of your spending. But, charging your daily expense on your future income may not be a very smart move because in the end, you will be paying interest on an item that you can just pay with cash. This year, it may be time to start bringing your wallet and coin purse. Bring out those loose change and you may be able to save more money shopping.

On another note, those who have been paying their bills on a cash basis can opt for automated payments. There are safety measures that you can discuss with your credit provider to ensure that all your payment transactions are safe.

Automated payments

If your habits put you in financial troubles, it may be time to change them. You are responsible for your financial success. Desire it and set a good plan of action; simply keep moving until your credit card debt and other loans are fully paid and you achieved the income level you desire.

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Business Loans Business Consolidation Loans Self Employed Short Term Loans Tax Debt Loans & Relief

How to Deal With Rapid Business Growth

When your dreams come true, and your business is not only up and running, but thriving and growing, it is truly a joyous feeling. Although you may want to take some time to bask in the light of your successful accomplishments, rapid business growth is actually a time for you to take a step back, to regroup, and to refocus.

As counterintuitive as it may seem, business success and growth is optimal for analysis, because if you don’t address the success and growth, you run the risk of false complacency and mindless routine, both of which can quickly derail expansion and progress.

Therefore, after that well-deserved pat on the back, sit down and try to understand why your business is so successful. It may be a strange directive, but by acknowledging what you do well, you can also understand what needs improvement. Your business strengths can be honed even more or expanded to different areas of the company.

Rapid Business Growth Means Big Changes

By going through receipts, invoices, payslips, bills, product assessment and/or services provided, you will be able to ascertain if you are good at budgeting, finances, predicting trends or even data entry. All of these facets constitute a business, and if you can identify the positive factors, then you can see the negative ones as well. It is possible to turn the negatives into positives.

Another source of feedback is customers:

  • Why are your customers so happy?
  • Why are they coming to your business rather than your competitor down the street?

Talking to customers individually or corresponding by email will help you see their perspective and will encourage customer loyalty. Without customers, there won’t be a business, so treat them well and listen to their comments, no matter how insignificant.

It also helps to have a business mentor. Depending upon how your business is funded, you might have private or angel investors who can bring a great deal of sound advice and experience to the proverbial table. See them not only as a cash resource but also as a font of knowledge.

  • How do they handle rapid business growth?
  • What are their suggestions?
  • How can they be of service to you during these exciting times?

Ask Your Closest Allies

Since we are focusing on the people who surround you, also turn your attention to your team. They can offer unique ideas and different perspectives as to the success of the company. By assessing their skills and their compatibility, you will be able to see if your team is a well-oiled machine that works together. This may be a reason for your success or it could use some more grease.

If you conclude that your team can handle the business growth, and continue to do so in the future, then this is definitely fortunate. However, don’t be afraid to add new talent to the team. Take a risk and hire people with more experience or more education, since they can bring entirely new working methods and ideas to the company.

Rapid business growth may spur you to hire new people, as mentioned above

However, before doing so, you might want to see if your team can do the work or to assign different chores to a range of staff. By shifting and sharing responsibilities among employees (and yourself), you create a different dynamic that might benefit you even more. The team could run more efficiently or people might discover hidden talents.

Adding More Employees May Help

If you still feel the need to hire new people, to keep costs low initially, you might contemplate using a temp service. In this way, you can see what roles need to be filled and how the group environment changes. After a certain amount of time, you will better understand your employment options, and you can always transition a temp to full time.

Freelance workers are an additional source of labor. By outsourcing data entry, accounts, or marketing, you can alleviate some of the work burden on staff, while again, keeping costs low, while you analyze your business.

Adapting to new trends and technology is key. As you well know, everything in the virtual digital world is constantly updating, becoming faster and better. Computers, programs, devices, and even wifi service are forever changing and while some of it may be blatant marketing, some products are worth researching.

Don’t Get Left Behind

Why be left in the dust due to a stubborn attachment to an old program or an antiquated banking system? Don’t be afraid to try new things that might actually make your business run smoother and ease your own stress levels.

Even though you must be doing something correct to achieve rapid business growth, studying emerging trends and adapting to them is an important strategy. Adjusting your business model and testing multiple ideas is a means of keeping your company fresh and innovative.

Businesses are often in constant flux, and flexibility regarding that constant flux is a very significant way to manage your rapid business growth.

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Bad Credit Loans Business Loans

Tackling Bad Credit and Common Financial Problems in Small Business

There are lots of things that can lead to bad credit for small businesses but some things are more likely than most to cause problems for SMEs. All businesses are susceptible to cash flow problems and the trouble can be hiding in a number of places.

Preventing Bad Credit in Small Business

It might sound simple but one of the biggest issues might be payment. Have a look at those customers or clients that owe you money and focus on getting those debts collected. On the other side of the coin, have a look at how you are paying your suppliers back and check that you are maximising your window to pay them. In some cases you might be able to get an extension with no extra cost. Check your stock to make sure that you are not overloaded on merchandise. Turning over stock should be any business’ goal no matter what their size. Managing your business’ cash flow poorly might be one of the biggest causes of bad credit.

Rising costs affect everyone but it can be especially devastating to small businesses. The most obvious solution to rising costs is to shop around for better prices. Have a look at all of your expenses and talk to your suppliers about getting discounts for paying early or rebates for buying in bulk. Do not hesitate to call up your bank and ask for a review on your loans before bad credit builds up. You might be able to negotiate a better rate on your debt since interest rates have been falling lately.

Changes in taxation laws and business regulation can have dramatic impact on your business. Staying up to date through newsletters from your local business networks can keep you on top of the latest changes. The fluctuating Australian dollar can have certain effects on your profits if you export or import a product or service. Determining how a rising or falling Australian dollar would change your bottom line can give you a different perspective for the future. Interest rates have been falling lately but that will not continue forever. If you have bad credit then now might be a great time to negotiate your debt with your lenders or possibly reach out to a lender for a bad credit loan. When interest rates begin to rise you will thank yourself for planning ahead and making good financial management decisions.

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Business Consolidation Loans Business Loans

Business Debt Rising

While there has been signs of business recovery in wake of the GFC, don’t be fooled into thinking that all businesses are out of the woods.

Recent data from the Australian Bankers’ Association, ASIC and the credit brokers show that there’s another wave of bad debts, administrations and insolvencies pending in small business land.

ASIC’s latest data on companies entering external administration for February 2010, was 827 which was higher than 2009 at 796 – with company insolvencies hitting 1159 nationally.

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Business Loans Short Term Business Loans Short Term Loans

Struggling Small Business Can Survive

Struggling small businesses in Australia are continually finding themselves in a questionable position with the current financial standings for Australia. Their optimism and outlook for the current year are looking bleak due to interest rates creeping up and a strong exchange rate. Additionally, the floods and cyclones have created a point of no return for many businesses around Australia.

Struggling Small Business Statistics

In a recent report among some small and medium enterprises, researchers found that optimism had dropped 41% to just 38% from the previous year. This decline in confidence has caused many small businesses to act cautiously and begin reevaluating the year ahead.

Increase in the Exchange Rate Can Help Struggling Small Business

As there has been an increase in the exchange rate for the Australian Dollar, a majority of the exporters are finding large losses in their financial statements, due to international importers finding their goods elsewhere or reducing the quantity they require from Australia to get more bang for their buck. With the forecast on the American Dollar staying low – there seems to be no hope in sight for Australian exporters. In response to these findings, Australian businesses are exploring new markets to enter or new products to provide to the Australian market.

A Struggling Small Business Might Look Into Short Term Loans

A great option to consider for recovering from the economic and environmental issues is a short term business loan. At Australian Lending Centre, we provide short term business loans which can provide the necessary funding to get small businesses through this rough period. Typically, our loan terms cover a period of as little as a couple of weeks, up to a year and we also have options available where you’re not required to make any repayments until the end of the loan term.

Short term business loans are ideal for:

  • Improving cash flow (working capital)
  • Purchasing business supplies, vehicles or office equipment
  • Paying wages
  • Paying off business debts
  • Starting up a neaw business or expanding an existing area of your current business
  • Paying your tax debts – e.g. business GST, staff PAYG obligations or superannuation payments
  • Taking business trips

A short term business loan can support struggling small business providing many benefits apart from the repayment flexibility such as a quick approval and funding turn around. If your business is finding itself in a tight spot, contact Australian Lending Centre and speak with a business loan consultant today on 1300 138 188. Alternatively, fill out the enquiry form to the right and a short term business loan consultant will contact you shortly.