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Will You Add? - How To Be Debt Free In Five Steps
Affiliate product promotion is one of the easiest ways to make money when you do it right, and one of the easiest ways to lose money if you are not careful.You see, you have to think about this: If you fail to make money but still make a few sales, who made a profit? That’s right – the affiliate manager himself.When you first get started online, you read a lot of info about how to make money online. I know I did. But I didn’t feel like what I read had a direct impact on what I was going to be able to do to make money. Either the information was a little vague—find a product, or make a product (what do you make or find when you are just getting started, right?), and then advertise it. Just drive traffic to your site. But it is not that easy, is it?So I did just that. I wrote a book. I sent traffic to my site. All kinds of traffic—most worthless, some good. But I didn’t make much money. I tracked the traffic, I tested it, I tested response rates—and I hung in there far longer than I think that the average person that wants to make money online does. But I won the battle, and you can too. It might take you a little longer than it did me (I had some things in my favor you might not have in yours).Then I discovered affiliate marketing. Affiliate marketing is where you simply promote another person’s product and they pay you a commission. Of course I studied that too, and saw that there are cons to affiliate marketing. Sometimes you don’t get paid your commissions. And you don’t have as much control over yo
Using software If you have a computer and spreadsheet software, you will save a lot of time if you enter your figures on a spreadsheet.
This will also help if you need to adjust the figures or if you want to do 'what if?' calculations to see the effect of making various changes to your budget.
Once you have entered all the figures, add up your total essential spending and your total desirable spending. This has the effect of smoothing your spending over the year to give you an average monthly spending figure for each of the two categories.
Working out your average monthly income
Once you have worked out your average monthly spending, you need to work out your average monthly income. To do this:
- add up all sources of regular monthly income
- If you are paid weekly or you get other weekly income (such as child benefit or state pension), multiply the weekly amount by four.
- calculate a monthly average for any irregular income you receive, together with lump sums you withdraw from savings, by adding up an annual total and dividing this by 12.
The total of all these figures is your average monthly income.
If your total is zero or negative (and you can't cut down on spending) you need to negotiate with your creditors in order to reduce your monthly repayments to a level you can afford to meet.
The ultimate aim of budgeting is to balance your income and expenditure. Failure to do this will lead to increasing indebtedness as you have to borrow more and more to make up for the fact that your spending exceeds your income. There are several ways to accomplish equilibrium
Billionaire Richard Branson, the entrepreneur behind the Virgin brand, is one of the world's most successful and adventurous businessmen. Not being satisfied to run several highly profitable businesses Branson also engages in occasional feats of courage, or stupidity, depending on your stand point!I read his autobiography recently and discovered something that perfectly sums up what it takes to achieve success on the Internet.To set the scene - Branson had called a meeting a few hours before he and his co-pilot were due to embark on an attempt to fly from Japan to America across the Pacific non-stop in a hot air balloon. The attempt would be fraught with countless difficulties, challenges and life-threatening risks. One last pre-take off meeting was held to talk through all eventualities of the flight and to discuss what Branson and his co-pilot needed to do to survive in each case.After an intense 3-hours' briefing, covering everything that could go wrong, on this, one of the most complex and risky aviation record attempts in history, Richard Branson came away having written just eight words into his notepad;"Keep the fire burning - that's all that matters."How incredible is that? He's faced with almost certain death and has just been briefed on the technical details of which levers to pull when, which buttons to press to escape crashing and which actions to take to prevent the capsule from decompressing and yet all he writes down is "Keep the fire burning".Why? Because that's all that matters! As lo
- Are you always overdrawn?
- Do you repay only the minimum amount on your credit card each month?
- Does the amount you owe on your credit card go up every month?
- Do you put off paying bills until the final reminder arrives?
- Have you ever missed a repayment on your mortgage or other loan?
- Can you afford to buy things only by borrowing?
Step 1: Gather information
Collect together every record of everything that you owe, such as unpaid bills, unopened mail, credit card statements, unpaid utility bills, letters from debt collectors, council tax bills, fines, red reminders, final reminders, final final reminders ... the lot.
Step 2: Make a list
Take a fresh notepad and a pen. Write down the name of the creditor or the collection agency on the left hand side of the page, and the total amount that you owe each creditor on the right. Do this until you have gone through all your paperwork and you have a long list of all the money that you owe on the sheet in front of you. You should also make a note of each creditor's contact details (address and telephone number) because you need to get in touch and explain that you are in difficulties.
Step 3: Order your debts
When you come to add up your debts, you should sort them into two groups: priority debts and non priority debts. Priority debts are those which carry particularly serious consequences if they are not dealt with, such as court action or losing your home and essential services. They include:
- mortgages and other secured loans
- rent arrears
- council tax arrears
- gas arrears
- electricity arrears
- other fuel arrears
- telephone arrears (if essential e.g. if you work from home)
- magistrates' court fine arrears
- maintenance payment arrears
- income tax arrears
- National Insurance arrears
- VAT arrears
- hire purchase arrears (for essential items e.g. a car for work).
Non priority debts are those where failure to pay will not result in the loss of your liberty, home or essential goods and services (although creditors may still back their demands for payment with financial and legal sanctions). They include the following:
- bank overdrafts and unsecured loans
- credit card arrears
- store card arrears
- catalogue arrears (including mail order)
- hire purchase arrears (non essential goods)
- benefits overpayments.
Priority debts come first
The reason for sorting your debts into these two groups is because, as their name suggests, priority debts have a more urgent claim on available income than non priority debts. This means that you should deal with these first, and then see how much income, if any, is left over to pay non priority creditors. This is sometimes difficult to remember if creditors are particularly persistent or demanding but it is important to maintain the distinction between priority and other debts.
Step 4: Calculate your income and expenditure
The next stage in tackling your debts is to work out how much money is available to you each month. List all your sources of income and draw up a detailed breakdown of all your monthly spending. You can do this by following the detailed steps on the next few pages. To find out how much money is left over for paying your debts, subtract your monthly spending from your monthly income. If you are left with a minus figure (that is, your spending exceeds your income) you need to find ways of either increasing your income or cutting back on your spending. It can be difficult deciding what to give up in order to save money. If you can't do it yourself, get help in the form of a debt adviser who will be able to take a dispassionate view of what is essential and what is not.
Debt advisers
This article cannot give more than general solutions. For personal advice tailored to your circumstances, and assistance in drawing up a financial statement and initiating negotiations with your creditors, you may want to consider enlisting the help of a debt adviser by contacting the Citizens Advice Bureau (CAB), a Money Advice Centre, the Consumer Credit Counselling Service or the National Debtline. Getting outside help not only shows your creditors that you are serious about solving your problems, but will ensure that you get advice about any state benefits and tax allowances to which you may be entitled. They will also be able to give you information on how to recognise approved consolidation debt loan uk companies.
Your budget
Working out a budget is essential if you are to take control of your money. It will help you identify any changes you need to make to your spending patterns and enable you to draw up a realistic financial statement to show to your creditors.
Making a list
The first step in drawing up a budget is to make a list of everything on which you spend money. Writing this down helps to focus your mind and provides you with a permanent record you won't forget. Rather than drawing up one long list, it can be helpful to break it down into different elements, such as:
- household costs
- living expenses
- travel/car
- personal spending
- leisure
- Christmas and birthdays
- savings
- children
- financial costs (including credit card repayments)
- cash spending
Establishing priorities
You should also divide your spending into two categories:
- essential, which covers the unavoidable and the necessary, such as your rent or mortgage, your bills, season ticket for getting to work, food, life insurance and so on
- desirable, which covers spending that is not strictly necessary (and at a push, you could do without) but which you regard as contributing to your wellbeing, such as non work clothes, CDs and meals out.
Collecting data
The next stage is to collect financial data for your list. In most cases, this will be a combination of actual past spending and educated guesses at future spending.
If you can lay your hands on a year's worth of bank statements, cheque book stubs, credit card and store card statements and other household bills, you already have a lot of the data you need to provide a detailed breakdown of your finances. If your records are less comprehensive, you may still be able to get a reasonable idea of where your money goes from your bank statements and credit card bills.
If you do not have any records or if you are drawing up a budget to see if you can afford something in particular, you will have to estimate the figures, to give their monthly cost.
Entering the figures
Once you have collected all your data together, you can start to enter figures against the items on your list. These should be in the form of monthly totals. For some items, such as your rent or monthly mortgage, this will be straightforward. Irregular spending on items such as clothes, holidays, quarterly bills and so on, requires you to estimate how much you spend each year and then divide this figure by 12. In this way you can arrive at a monthly sum for every item.
Using software If you have a computer and spreadsheet software, you will save a lot of time if you enter your figures on a spreadsheet.
This will also help if you need to adjust the figures or if you want to do 'what if?' calculations to see the effect of making various changes to your budget.
Once you have entered all the figures, add up your total essential spending and your total desirable spending. This has the effect of smoothing your spending over the year to give you an average monthly spending figure for each of the two categories.
Working out your average monthly income
Once you have worked out your average monthly spending, you need to work out your average monthly income. To do this:
- add up all sources of regular monthly income
- If you are paid weekly or you get other weekly income (such as child benefit or state pension), multiply the weekly amount by four.
- calculate a monthly average for any irregular income you receive, together with lump sums you withdraw from savings, by adding up an annual total and dividing this by 12.
The total of all these figures is your average monthly income.
If your total is zero or negative (and you can't cut down on spending) you need to negotiate with your creditors in order to reduce your monthly repayments to a level you can afford to meet.
The ultimate aim of budgeting is to balance your income and expenditure. Failure to do this will lead to increasing indebtedness as you have to borrow more and more to make up for the fact that your spending exceeds your income. There are several ways to accomplish equilibrium
If you're like me, you've had plenty of experience with BAD customer service. Just think about the last time you had a bad experience with a product or a service.Perhaps the product or service did not live up to the sales pitch. Maybe the company was unresponsive to your calls or emails. Maybe they did not do what they said they were going to do. Or they gave you the run-around when you called to report a problem or ask a question.If you think about it, all of these negative experiences boil down to one thing, a lack of customer service. And a lack of customer service usually stems from a lack of customer focus. It seems many businesses have simply lost sight of who they are really in business to serve.Instead of the old saying, "the customer is always right," many businesses seem almost bothered by customers these days. In fact, I'll let you in on a little secret from my early ad agency days. We used to have a saying, "this business would be great, if it wasn't for the clients."How ridiculous is that?! We wouldn't have had a job if it weren't for the clients (I'm older and wiser now!). Yes, sometimes clients can be difficult, but they are the reason we are in business. Our job is to serve them. If they are upset, we should welcome the opportunity to find out why, and use that information to improve our product or service.Yes, sometimes you'll run into some yahoo who is being totally unreasonable and you just have to deal with it. But very often, client complaints uncover a problem or something we can improv
- mortgages and other secured loans
- rent arrears
- council tax arrears
- gas arrears
- electricity arrears
- other fuel arrears
- telephone arrears (if essential e.g. if you work from home)
- magistrates' court fine arrears
- maintenance payment arrears
- income tax arrears
- National Insurance arrears
- VAT arrears
- hire purchase arrears (for essential items e.g. a car for work).
Non priority debts are those where failure to pay will not result in the loss of your liberty, home or essential goods and services (although creditors may still back their demands for payment with financial and legal sanctions). They include the following:
- bank overdrafts and unsecured loans
- credit card arrears
- store card arrears
- catalogue arrears (including mail order)
- hire purchase arrears (non essential goods)
- benefits overpayments.
Priority debts come first
The reason for sorting your debts into these two groups is because, as their name suggests, priority debts have a more urgent claim on available income than non priority debts. This means that you should deal with these first, and then see how much income, if any, is left over to pay non priority creditors. This is sometimes difficult to remember if creditors are particularly persistent or demanding but it is important to maintain the distinction between priority and other debts.
Step 4: Calculate your income and expenditure
The next stage in tackling your debts is to work out how much money is available to you each month. List all your sources of income and draw up a detailed breakdown of all your monthly spending. You can do this by following the detailed steps on the next few pages. To find out how much money is left over for paying your debts, subtract your monthly spending from your monthly income. If you are left with a minus figure (that is, your spending exceeds your income) you need to find ways of either increasing your income or cutting back on your spending. It can be difficult deciding what to give up in order to save money. If you can't do it yourself, get help in the form of a debt adviser who will be able to take a dispassionate view of what is essential and what is not.
Debt advisers
This article cannot give more than general solutions. For personal advice tailored to your circumstances, and assistance in drawing up a financial statement and initiating negotiations with your creditors, you may want to consider enlisting the help of a debt adviser by contacting the Citizens Advice Bureau (CAB), a Money Advice Centre, the Consumer Credit Counselling Service or the National Debtline. Getting outside help not only shows your creditors that you are serious about solving your problems, but will ensure that you get advice about any state benefits and tax allowances to which you may be entitled. They will also be able to give you information on how to recognise approved consolidation debt loan uk companies.
Your budget
Working out a budget is essential if you are to take control of your money. It will help you identify any changes you need to make to your spending patterns and enable you to draw up a realistic financial statement to show to your creditors.
Making a list
The first step in drawing up a budget is to make a list of everything on which you spend money. Writing this down helps to focus your mind and provides you with a permanent record you won't forget. Rather than drawing up one long list, it can be helpful to break it down into different elements, such as:
- household costs
- living expenses
- travel/car
- personal spending
- leisure
- Christmas and birthdays
- savings
- children
- financial costs (including credit card repayments)
- cash spending
Establishing priorities
You should also divide your spending into two categories:
- essential, which covers the unavoidable and the necessary, such as your rent or mortgage, your bills, season ticket for getting to work, food, life insurance and so on
- desirable, which covers spending that is not strictly necessary (and at a push, you could do without) but which you regard as contributing to your wellbeing, such as non work clothes, CDs and meals out.
Collecting data
The next stage is to collect financial data for your list. In most cases, this will be a combination of actual past spending and educated guesses at future spending.
If you can lay your hands on a year's worth of bank statements, cheque book stubs, credit card and store card statements and other household bills, you already have a lot of the data you need to provide a detailed breakdown of your finances. If your records are less comprehensive, you may still be able to get a reasonable idea of where your money goes from your bank statements and credit card bills.
If you do not have any records or if you are drawing up a budget to see if you can afford something in particular, you will have to estimate the figures, to give their monthly cost.
Entering the figures
Once you have collected all your data together, you can start to enter figures against the items on your list. These should be in the form of monthly totals. For some items, such as your rent or monthly mortgage, this will be straightforward. Irregular spending on items such as clothes, holidays, quarterly bills and so on, requires you to estimate how much you spend each year and then divide this figure by 12. In this way you can arrive at a monthly sum for every item.
Using software If you have a computer and spreadsheet software, you will save a lot of time if you enter your figures on a spreadsheet.
This will also help if you need to adjust the figures or if you want to do 'what if?' calculations to see the effect of making various changes to your budget.
Once you have entered all the figures, add up your total essential spending and your total desirable spending. This has the effect of smoothing your spending over the year to give you an average monthly spending figure for each of the two categories.
Working out your average monthly income
Once you have worked out your average monthly spending, you need to work out your average monthly income. To do this:
- add up all sources of regular monthly income
- If you are paid weekly or you get other weekly income (such as child benefit or state pension), multiply the weekly amount by four.
- calculate a monthly average for any irregular income you receive, together with lump sums you withdraw from savings, by adding up an annual total and dividing this by 12.
The total of all these figures is your average monthly income.
If your total is zero or negative (and you can't cut down on spending) you need to negotiate with your creditors in order to reduce your monthly repayments to a level you can afford to meet.
The ultimate aim of budgeting is to balance your income and expenditure. Failure to do this will lead to increasing indebtedness as you have to borrow more and more to make up for the fact that your spending exceeds your income. There are several ways to accomplish equilibrium
Making sales calls is the fundamental building block to making your medical staffing agency a success.This process requires some preparation before you dive into making your telemarketing calls for your medical staffing agency, especially if you are calling a new medical facility or are new to this type of work.Key questions you need to prepare prior to making your calls are?Who are you trying to call? How do I plan on reaching the people on my list? What is my objective for this call? What are some of the objections I will encounter? How do I plan on responding to the objections?Script the call using these questions before you begin your calling campaign. Remember, you generally don't have much more than 20 seconds to make your presentation on the phone.Some basic questions you need to ask as a This process requires some preparation before you dive into making your telemarketing calls for your medical staffing agency, especially if you are calling a new medical facility or are new to this type of work.Key questions you need to prepare prior to making your calls are?Who are you trying to call? How do I plan on reaching the people on my list? What is my objective for this call? What are some of the objections I will encounter? How do I plan on responding to the objections?Script the call using these questions before you begin your calling campaign. Remember, you generally don't have much more than 20 seconds to make your presentation on the phone.
Debt advisers
This article cannot give more than general solutions. For personal advice tailored to your circumstances, and assistance in drawing up a financial statement and initiating negotiations with your creditors, you may want to consider enlisting the help of a debt adviser by contacting the Citizens Advice Bureau (CAB), a Money Advice Centre, the Consumer Credit Counselling Service or the National Debtline. Getting outside help not only shows your creditors that you are serious about solving your problems, but will ensure that you get advice about any state benefits and tax allowances to which you may be entitled. They will also be able to give you information on how to recognise approved consolidation debt loan uk companies.
Your budget
Working out a budget is essential if you are to take control of your money. It will help you identify any changes you need to make to your spending patterns and enable you to draw up a realistic financial statement to show to your creditors.
Making a list
The first step in drawing up a budget is to make a list of everything on which you spend money. Writing this down helps to focus your mind and provides you with a permanent record you won't forget. Rather than drawing up one long list, it can be helpful to break it down into different elements, such as:
- household costs
- living expenses
- travel/car
- personal spending
- leisure
- Christmas and birthdays
- savings
- children
- financial costs (including credit card repayments)
- cash spending
Establishing priorities
You should also divide your spending into two categories:
- essential, which covers the unavoidable and the necessary, such as your rent or mortgage, your bills, season ticket for getting to work, food, life insurance and so on
- desirable, which covers spending that is not strictly necessary (and at a push, you could do without) but which you regard as contributing to your wellbeing, such as non work clothes, CDs and meals out.
Collecting data
The next stage is to collect financial data for your list. In most cases, this will be a combination of actual past spending and educated guesses at future spending.
If you can lay your hands on a year's worth of bank statements, cheque book stubs, credit card and store card statements and other household bills, you already have a lot of the data you need to provide a detailed breakdown of your finances. If your records are less comprehensive, you may still be able to get a reasonable idea of where your money goes from your bank statements and credit card bills.
If you do not have any records or if you are drawing up a budget to see if you can afford something in particular, you will have to estimate the figures, to give their monthly cost.
Entering the figures
Once you have collected all your data together, you can start to enter figures against the items on your list. These should be in the form of monthly totals. For some items, such as your rent or monthly mortgage, this will be straightforward. Irregular spending on items such as clothes, holidays, quarterly bills and so on, requires you to estimate how much you spend each year and then divide this figure by 12. In this way you can arrive at a monthly sum for every item.
Using software If you have a computer and spreadsheet software, you will save a lot of time if you enter your figures on a spreadsheet.
This will also help if you need to adjust the figures or if you want to do 'what if?' calculations to see the effect of making various changes to your budget.
Once you have entered all the figures, add up your total essential spending and your total desirable spending. This has the effect of smoothing your spending over the year to give you an average monthly spending figure for each of the two categories.
Working out your average monthly income
Once you have worked out your average monthly spending, you need to work out your average monthly income. To do this:
- add up all sources of regular monthly income
- If you are paid weekly or you get other weekly income (such as child benefit or state pension), multiply the weekly amount by four.
- calculate a monthly average for any irregular income you receive, together with lump sums you withdraw from savings, by adding up an annual total and dividing this by 12.
The total of all these figures is your average monthly income.
If your total is zero or negative (and you can't cut down on spending) you need to negotiate with your creditors in order to reduce your monthly repayments to a level you can afford to meet.
The ultimate aim of budgeting is to balance your income and expenditure. Failure to do this will lead to increasing indebtedness as you have to borrow more and more to make up for the fact that your spending exceeds your income. There are several ways to accomplish equilibrium
Corporate performance management is applied in banking services, financial services, education, defense, government, hospital, entertainment, small or large businesses and pharmaceuticals. Corporate performance management costs include real time departmental expense, cost involved in data analysis from data warehouse systems, transactional details, planning, budgeting, consolidation and ratio analysis. Different types of software are used for managing corporate performance. The cost of CPM software is based on the size of the company, license cost, data integration, data warehouse, OLAP independence, analytic applications and performance management.Corporate performance management costs also include software license cost, direct cost and indirect cost. There may be additional cost such as hardware costs. The specifications should be thought out before the purchase of software. The implementation cost may be greater than the software license cost. Maintenance costs are usually charged on the list price. The cost of upgrading should also be confirmed. If remote access is used there may be a chance of incurring additional cost. Hiring additional resources will also raise the internal cost.The selection of a CPM vendor depends on certain factors such as software budget, target server platform, the number of users and business requirements. The different kinds of corporate performance management vendors are CPM tools, CPM application and ERP vendors. CPM tools include online analytical processing, report and query. CPM applications include
- household costs
- living expenses
- travel/car
- personal spending
- leisure
- Christmas and birthdays
- savings
- children
- financial costs (including credit card repayments)
- cash spending
Establishing priorities
You should also divide your spending into two categories:
- essential, which covers the unavoidable and the necessary, such as your rent or mortgage, your bills, season ticket for getting to work, food, life insurance and so on
- desirable, which covers spending that is not strictly necessary (and at a push, you could do without) but which you regard as contributing to your wellbeing, such as non work clothes, CDs and meals out.
Collecting data
The next stage is to collect financial data for your list. In most cases, this will be a combination of actual past spending and educated guesses at future spending.
If you can lay your hands on a year's worth of bank statements, cheque book stubs, credit card and store card statements and other household bills, you already have a lot of the data you need to provide a detailed breakdown of your finances. If your records are less comprehensive, you may still be able to get a reasonable idea of where your money goes from your bank statements and credit card bills.
If you do not have any records or if you are drawing up a budget to see if you can afford something in particular, you will have to estimate the figures, to give their monthly cost.
Entering the figures
Once you have collected all your data together, you can start to enter figures against the items on your list. These should be in the form of monthly totals. For some items, such as your rent or monthly mortgage, this will be straightforward. Irregular spending on items such as clothes, holidays, quarterly bills and so on, requires you to estimate how much you spend each year and then divide this figure by 12. In this way you can arrive at a monthly sum for every item.
Using software If you have a computer and spreadsheet software, you will save a lot of time if you enter your figures on a spreadsheet.
This will also help if you need to adjust the figures or if you want to do 'what if?' calculations to see the effect of making various changes to your budget.
Once you have entered all the figures, add up your total essential spending and your total desirable spending. This has the effect of smoothing your spending over the year to give you an average monthly spending figure for each of the two categories.
Working out your average monthly income
Once you have worked out your average monthly spending, you need to work out your average monthly income. To do this:
- add up all sources of regular monthly income
- If you are paid weekly or you get other weekly income (such as child benefit or state pension), multiply the weekly amount by four.
- calculate a monthly average for any irregular income you receive, together with lump sums you withdraw from savings, by adding up an annual total and dividing this by 12.
The total of all these figures is your average monthly income.
If your total is zero or negative (and you can't cut down on spending) you need to negotiate with your creditors in order to reduce your monthly repayments to a level you can afford to meet.
The ultimate aim of budgeting is to balance your income and expenditure. Failure to do this will lead to increasing indebtedness as you have to borrow more and more to make up for the fact that your spending exceeds your income. There are several ways to accomplish equilibrium
Can you put a web page together? Add more, and build them into a website? Even if you are using cutting edge web page building software you have probably had to struggle through learning HTML, CSS, at least some PHP, and probably still more of the "alphabet soup" you have to swim through to become a website developer. On top of that you found you had to be a fairly skilled writer and designer in the course of your website content development.So after all that you managed to build a website, and even climb the next hurdle of getting it published. Thought you were on top of it didn't you? Did you feel pretty proud of yourself? But what happened next? Was your website then ignored by the search engines? Did you wonder where your visitors were? Did you begin to wonder what was the point of all that effort? You are not alone.Being able to build and publish a website is no small accomplishment, but then you are only half way there at best. It's like climbing a mountain: whenever you think you have reached the top of the slope you can see ahead you find the real top is further up, and then when you are on the ridge you find that there is a higher peak yet waiting to be conquered further along.Hidden away from most of us there is a mysterious body of website development and content management knowledge, often referred to as search engine optimization or search engine marketing. Much of it is a dark art, more akin to astrology and alchemy than to astronomy or chemistry. It's all about getting your website to the top of the search engine
Using software If you have a computer and spreadsheet software, you will save a lot of time if you enter your figures on a spreadsheet.
This will also help if you need to adjust the figures or if you want to do 'what if?' calculations to see the effect of making various changes to your budget.
Once you have entered all the figures, add up your total essential spending and your total desirable spending. This has the effect of smoothing your spending over the year to give you an average monthly spending figure for each of the two categories.
Working out your average monthly income
Once you have worked out your average monthly spending, you need to work out your average monthly income. To do this:
- add up all sources of regular monthly income
- If you are paid weekly or you get other weekly income (such as child benefit or state pension), multiply the weekly amount by four.
- calculate a monthly average for any irregular income you receive, together with lump sums you withdraw from savings, by adding up an annual total and dividing this by 12.
The total of all these figures is your average monthly income.
If your total is zero or negative (and you can't cut down on spending) you need to negotiate with your creditors in order to reduce your monthly repayments to a level you can afford to meet.
The ultimate aim of budgeting is to balance your income and expenditure. Failure to do this will lead to increasing indebtedness as you have to borrow more and more to make up for the fact that your spending exceeds your income. There are several ways to accomplish equilibrium mainly by decreasing your expenditure or increasing your income. The following actions can help you improve your position:
- cutting back spending on inessentials
- working out a monthly budget for your essential bills
- checking that your overdraft is authorised and that you are not paying over the odds for it
- transferring all your credit card debts to a lower charging card
- diverting any savings you may have towards paying off your debts finding a cheaper way to borrow for your other loans but be wary of transferring loans which carry a penalty for early repayment ensuring that you keep up repayments on your mortgage and other existing loans paying off the most expensive of the debts that you can clear first.
Re-mortgaging
One way to reduce your outgoings is to cut the cost of your borrowing. If you are a home owner, and have some equity in your property, you might be able to do this by re-mortgaging. By simply switching to a different mortgage provider, you may be able to obtain a lower rate of interest. You might also be able to replace expensive borrowing with a loan secured on your property at a much lower rate of interest. This may bring your monthly repayments down to a manageable level. Although re-mortgaging can be an attractive option, there are several points you need to bear in mind:
- Failing to keep up repayments on your mortgage means that your house could be repossessed. Unsecured borrowing doesn't carry this risk.
- Always check whether you will be charged an early repayment charge (or redemption penalty) if you change to another mortgage, and find out what fees (such as solicitor's and valuation fees) you will be charged, These costs may wipe out any benefit to getting a lower rate.
- You will only make a significant reduction in your outgoings if you change substantial high interest borrowings to a lower rate.
- Only re mortgage with a licensed mortgage provider.
Step 5: Prepare a financial statement
Drawing up a financial statement not only helps you to plan but it will also show your creditors what your financial position is and how much money is available for repaying your debts. If your creditors can see that you do not have money available to repay them in full, they may realise that it is not worth taking you to court to recover the money. A financial statement can also help persuade creditors to freeze interest and to accept token payments while you concentrate on repaying your priority debts.
Negotiating with your creditors
Once you have drawn up a financial statement you will be in a position to negotiate a realistic repayment plan with your creditors, concentrating on your priority debts first. A copy of your financial statement should be sent with any offer of repayment to demonstrate that, given your financial circumstances, it is a reasonable amount, however small it may appear.
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