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Top 6 debt management strategies you cannot miss

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Debt management strategies

Source: Friends of the Earth International

Debt is all right when it fulfills your immediate needs and you have enough resources to pay it back without sweat but if it increases beyond a limit, your financial position crumbles into dust and you can easily go bankrupt as the situation spirals out of your control. Nevertheless, the thing is, debt can be controlled if we have certain financial knowledge and a commitment to get debt free and to control our spending.

The Requirements for Controlling Debt

An individual must possess many qualities if he has to control his debt and payback in an efficient and steady manner. The most needed such quality is self-control. A person in debt must cut back his spending so that he does not incur more debt and can slowly pay back his older debts. In addition, it takes self-control to steadily payoff the debt and interest out of one’s small salary and one has to undergo a lifestyle change at times to pay the money back. The second quality that is needed is a deep commitment to a payback plan. Many offers from various agencies can confuse a person. However, many of these agencies are not working to help their clients, instead they just make money for themselves and client is left to suffer on his own. It is always advisable to get some knowledge regarding various companies and products offered in the market.

Debt Management Strategies

There are many approaches one can follow to manage his debt.  Some of these strategies are listed below:

1. Individual Voluntary Agreement (IVA) – An IVA is a legal agreement between the debtor and the creditors. An agreement is reached on the amount of the debt, which the debtor can pay off in a certain period, by living within reasonable livelihood expenses. It usually lasts for a period of five years and after that amount of time, the remaining debt is written off. It is a formal alternative to avoid bankruptcy. More info www.iva.com

It has many benefits like those that the debt owned is significantly reduced; the individual is also motivated to payback the debt. There is also no hassling of the debtor at the hands of the creditors as the term of agreement is fixed and the creditors cannot force a change in its terms. A financial expert is selected as Insolvency Practitioner who then manages the whole process.

 There are some nominal fees involved in the entire process. The debtor also has a greater hold over his home than in bankruptcy. It is difficult to obtain credit during the period of IVA but an individual can still obtain credit if necessary.

2. Debt Restructuring – Debt restructuring (also known as debt consolidation) is a widely used technique to manage debt. In this technique, many small and distributed debts are exchanged with a larger debt with a lower interest rate. This technique will provide one, the benefit of paying off a single debt with lower payments and lower interests. In addition, the hassle to pay different debts at the same time is greatly reduced.

However, this technique has a catch. One must carefully calculate the interest, which will be paid on this larger debt. This new and larger debt will last for a longer period and thus it is possible that one will end up paying much more. Also as the payments last for a longer period, the satisfaction to see the debt disappearing is not there.

3. Debt Snowball Method – In Debt Snowball method, the smallest debt is paid off first, often starting with credit cards. A small fixed payment is distributed among all debts equally but extra payment is applied towards the smallest debt. As the smallest debt is cleared its share of fixed payment and extra payment is applied towards the next smaller debt until it is cleared too.

This strategy offers the satisfaction of watching your debts reducing in numbers quickly, but the inherent problem of this strategy is that debt with higher interest rates may linger on which in turn puts you in more debt.

4. Debt Management Plan– It is an agreement between a creditor and debtor, which is individually tailored. It specifies how the debtor will pay back his debt. In it the payment frequency, the interest rate is adjusted and an affordable amount is agreed upon as the payback. This helps in a person getting control of his finances especially unsecured debts. To follow this strategy a thorough analysis of an individual’s net worth and monthly expenditure is done.

5. Debt Recycling – In this strategy, the unsecured and inefficient debt is replaced with efficient debt. An inefficient debt is the debt for which we do not get tax deductions while for efficient debt we qualify for tax deductions. In a way, it helps a person as the amount saved on tax, can be utilized for debt repayment. However, there are charges for converting inefficient debt to efficient debt as it is difficult to do on your own and financial expert’s help is usually required.

6. Bankruptcy – A person can declare himself bankrupt in case he is no longer able to payback his debts. In that case, the creditors can get control of his assets and can sell them off to secure their repayment. Bankruptcy stays in the individual’s financial record for a minimum of six years, making it very difficult to obtain credit.

I am a software engineer in a prestigious MNC. I am NSE certified derivatives professional and I like to dabble in money making schemes a lot. I like to read, play subway surfer on my tab and I am always connected to internet.

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How To Make Business Life So Much More Favourable

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If you have a business or you’re heavily considering starting a business, then you’ll know all about the perils and the difficulties that will come with it all. While it seems like such a wonderful idea from the outside looking in, it’s actually something that can really take its toll on you if you’re not prepared enough both mentally and physically. 

You’ll always be looking for ways to make business life an awful lot more convenient. The idea in this game is obviously to work hard as you never get anywhere without a serious commitment. You’ll really want to focus on working smart, however. Hard work for no reason is foolish when you have much better ideas and techniques staring you in the face. Business life can be a real hassle if you get things wrong and have to go through laborious days. Here are just a few ways to make your days, weeks, and months a lot more favorable for you: 

Get The Right People Around You  

Who you share your time with in business matters so much. If you have all of the wrong people, then you could be on a downward slant over the next few years. If you have good people with the right attitude and intentions, then you’ll likely become a lot more successful. In terms of using the right people, we’re talking about networking, hiring staff, bringing in specialists, soliciting advice, and so many other areas. Business is an interpersonal game, so make sure the right groups and individuals work with what you’re trying to achieve. 

Embrace Technology A Lot More Than Perhaps You Are Right Now 

If you’re already someone who wants to milk every platform they have, then this idea won’t worry you too much. There are so many pieces of ai powered software around that will help you with what you’re trying to achieve. Analytics, ads, management, and so many other areas can be bolstered with good programs. 

Set Up Genuine Plans With Achievable Goals 

This sort of goes without saying because you’ll likely have plans for the tasks ahead. This is more the idea of creating more structured plans for areas that are perhaps freer and less structured. Setting goals for everything you do can lead you to understand more about what needs to be done. It also gets everyone even more motivated. 

Take Care Of The People Working With You 

In terms of those you’re with, you’re going to need to treat them properly. It’s amazing what can happen if you neglect how they feel and the work they put in. The best leaders will always hone in on each individual and check in with them. 

Outsource Certain Jobs That Are Tedious

Sometimes, there are particular tasks that – although they need to be done – take up lots of unnecessary time and stress. If you are outsourcing admin, for instance, it makes life a lot easier for you as you all can focus on the productive and progressive side. 

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Current Trends in Business That Every Entrepreneur Should Work Towards Achieving

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The world of business is changing and with it the trends that entrepreneurs should be working towards. Entrepreneurship has become a lifestyle as opposed to just a paycheck. With an entrepreneurial mindset, you can do anything. Check out these current trends in business that every entrepreneur should work on achieving:

E-Commerce

E-commerce has been a significant trend for the past few years, and you can expect it to continue being so. E-commerce has multiple benefits, including increased revenue, high availability of products, and a more significant customer base.

E-commerce allows businesses to be present on all digital platforms, which helps them reach out to more customers quickly. In addition, it makes it easier for companies to reduce overhead expenses as there are no physical stores that have rent costs associated with them or inventory levels that need maintenance constantly. Statistically, e-commerce has grown rapidly in the past few years from 25% – 30% year on year.

Financial Apps and Software

The software aspect comes into play when considering how businesses manage their finances moving forward. Companies must adapt to technology. Otherwise, they will find themselves left behind by competitors who embrace emerging technologies such as cloud computing and mobile apps. It is also easier to make purchases using these apps and communicate with the sellers. Incorporating such software with equipment and partnerships with a payment processing company will diversify the business activities and set you up for expansion.

These apps allow them to move away from traditional forms of financial management such as spreadsheets and accounting software to financial management apps such as Xero. With these new apps comes the ability to monitor business finances from anywhere, which can help businesses grow faster than what they would ordinarily be able to manage with slower conventional processes.

Blockchain Tech

Blockchain tech is the current trend in business that every entrepreneur should work towards achieving. You can apply this technology to many different industries, and entrepreneurs need to find their niche within this growing market. It’s also critically important not to overlook blockchain tech when deciding which cryptocurrency or token you want your company associated with.

Both positive and negative factors are involved in choosing one solution over another, but it all comes down to finding what works best for each situation. For example, today’s most valuable aspect of blockchain tech is its promotion of secure transactions between parties while eliminating third-party transaction fees (or at least significantly reducing them).

It means that businesses operating on a global scale could potentially enjoy significant savings in maintaining financial records. Transparency is also an important selling point for blockchain tech. The decentralized nature of its design makes all transactions public and easily accessible by anyone who has access.

Fraud and Cyber Crime

Another current trend that every entrepreneur should work towards achieving is fraud and cybercrime. In today’s modern world, the internet has brought the business community closer together as it allows you to reach a global market from almost anywhere with an Internet connection. Unfortunately, this means those who want to take advantage of this have access to millions of more potential customers, making it easier for fraudsters to steal money from unsuspecting victims.

Businesses that are not careful can fall victim to several types of cybercrime, including phishing, spoofing, pharming, and identity theft. These crimes are increasing at an alarming rate as more people use the internet for business purposes which means scammers often target them.

Conclusion

Today, business is becoming increasingly challenging. The traditional ways of doing things don’t work anymore, and it’s time for entrepreneurs to adapt to stay relevant within the industry. However, the industry itself is evolving rapidly, and it’s challenging to keep up with the changes that are happening every day. Fortunately for you, this post is here to help you understand the current trends that every entrepreneur should work towards achieving.

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Employee Training and Development Becomes One of the Most Disruptive Megatrends That Is Shaping the Future of Work

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Employee training

There is no question about the effectiveness of employee training and development. It’s incredibly important to help your staff advance their skills and knowledge to help grow a business, but the impact of employee learning has often been understated and even neglected. However, companies are now suggesting that employee training and development is one of the biggest megatrends that have completely transformed the future of work. It has overhauled how businesses should be developing and engaging with employees, and it’s leading to an incredibly diverse and talented workforce that is capable of wonderful new things.

Part of the problem of employee training and development is that it’s difficult to measure its impact on the workplace. Employee performance often isn’t a quantitative measurement that is easy to read and link to their output. This is one of the reasons why the effectiveness of employee training and development has been questioned by management experts.

Thankfully, new strategies have been developed to help measure workplace learning and its impact on companies. Below, we’ve included a helpful infographic that covers some of the most important measurements, such as return on investment and how it is calculated in the context of employee learning and development. It should put the effectiveness of employee training into perspective and will help you better understand when training is needed and how development actually improves your business and its productivity.


Infographic by: Ezra Coaching
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