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Financial Wellness Requires a Plan
A successful business owner may spend months and in some cases, even years on the design of their business plan. Such a business plan will consider critical factors such as risk management, the target audience of the business and startup capital to mention only a few vital factors. That startup capital is not unlimited and when too much is borrowed, the business may simply not be able to generate sufficient profits in order to allow the business owner to repay such debts.
Likewise, any person who possesses basic financial acumen will never borrow more than they can afford to repay. Doing so will always result in tremendous financial problems and such a person will remain a slave to his creditors as long as he lives. So many people have this notion that retirement is something which is an undeniable right and that all they have to do is to stick it out for 30 years and once they reach the age of 60, they will receive their dues and their pension will take care of them till the day they die. The problem is that a very large number of people have suddenly come to the realization that their assumptions were childish and foolish.
Use Common Sense
Just suppose that you have three outstanding debts, one for a $100,000, one for $50,000 and one for $20,000. However, the interest on the $20,000 debt is very high while the others are substantially lower. Which one should therefore be paid first?
The $20,000 debt should be paid first because of the high interest which are charged on that debt, which is costing you a lot of unnecessary money. There are many greedy people who are so desperate to qualify for large loans to allow them to purchase expensive articles which they cannot really afford. Therefore, when they budget for something, they foolishly work on their gross income instead of their net income.
This is not a wise thing to do because there are many deductions which has to be accounted for and this is why many people find themselves in all kinds of problems and they continually have to contend with creditors who are determined to recover their losses.
The Golden Rule of Personal Finance
The ultimate and the most important rule of personal finance is to never spend more than your income. This is the absolute golden rule of personal finance and those people who live by this rule will never run into financial problems.
For those people who do not abide by this simple, yet cardinal rule, they will always find themselves in one kind of financial turmoil or another. They will never achieve true financial well-being.
Never try to solve your own financial problems and especially if you have already tried many options without success. It is much better to obtain professional assistance from people who have experience in financial matters. One option which could be considered is a debt consolidation loan which could be used to repay all of your other outstanding debts so that you are no longer accountable to many creditors but only to one ultimate creditor. Many consumers have found that debt consolidation loans is a certain way to relieve a tremendous amount of financial pressure, allowing the debtor to change the way in which they look at their financial situation.
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