Is declaring bankruptcy an option?

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Christmas is traditionally a season of merriment and relaxation where we normally get to let go of our concerns and just enjoy ourselves. However, this year many people are so focused on their financial challenges that they are finding it difficult to have fun. Some are extremely anxious about expanding debt positions and impending job losses, and wonder how they are going to turn around their finances.

In the United States, it is fairly common for people who have been overwhelmed by debt to file for bankruptcy. According to Businessdictionary.com, bankruptcy is the legal procedure for liquidating a company, or property owned by an individual, which cannot pay its debts out of current assets. In Jamaica, only individuals file for bankruptcy as companies are placed in liquidation or receivership.

Is declaring bankruptcy an option for average Jamaicans who are mired in debt, and have no means to pay it back? I asked the Office of the Trustee in Bankruptcy to enlighten us about the process. Continue reading Is declaring bankruptcy an option? →

Homeownership Challenges

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According to recent news reports, mortgage interest rates are set to rise drastically as a result of the interest rate increases on Bank of Jamaica (BOJ) securities. Financial institutions will have to raise the interest rates paid on deposits in line with market rates, and therefore they will be forced to charge more for loans.

How will these developments affect Jamaica’s housing market? According to real estate industry experts, increases in mortgage costs will have a negative impact on both existing and prospective home owners.

BOJ data revealed that up to June 2008, the amount of mortgage loans in arrears for three months and more had risen by some 71 per cent over the previous year. Delinquency rates are expected to grow even more as the cost of homeownership increases.

In addition, most consumers’ income levels are not moving up to match these increased finance costs, so many hopeful homeowners may not have the cash flow required to qualify for a mortgage. Continue reading Homeownership Challenges →

Are You Afraid Of Your Financial Future?

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“I work in the tourism sector and I’m worried that the current international financial situation will cause me to lose my job. I don’t know how I’ll be able to manage without this income, and I’m feeling really scared right now about my future.”

The global economic crisis is having a negative impact on a wide cross section of the society – large conglomerates and small businesses, company executives and line staff, wealthy people and the poor. Institutions and individuals alike are reeling from the repercussions of a financial world in turmoil.

A reader recently asked me how it was possible for me to advise people in this financially challenging period. The reality is that whether times are good or bad, the principles that govern money remain constant.

If you understand the essentials of how to manage, multiply and maintain your money, you will always be able to keep a sound footing even in the midst of a financial storm.

Continue reading Are You Afraid Of Your Financial Future? →

Why Do You Love to Shop?

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“Despite the current financial uncertainty, I still find myself shopping too much. I earn a great income, but I’m not saving enough, and I realize that I have to be more responsible with my purchases. Whether it’s at the supermarket or online stores, I really enjoy buying something frivolous every week. What can I do?”

One of the first steps in curing yourself of the desire to shop excessively is to figure out the reasons that drive you to overindulge. Let’s look at some common motivations that may cause you to spend too much, along with possible solutions to curb your consumer cravings:

Reason:  You’re bored

The reality is that for many people, shopping is fun. Think of the adrenaline rush that comes from finding that perfect item in the right colour, and on sale to boot! Shopping can become even more entertaining when done with a group of friends. I’m sure most ladies will agree that there’s nothing that bonds us together like a shared passion for shopping.

Solution: Stop browsing online shopping websites to pass the time. Find another hobby that can stimulate you without costing you. How about forming a book club where your friends can meet to discuss the book of the month? Or you could start a group physical activity like jogging, which will not only bring great camaraderie but create health benefits as well. Continue reading Why Do You Love to Shop? →

Profit From Problems

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One of my favourite TV shows is The Big Idea with Donny Deutsch, an entrepreneurial programme broadcast on CNBC. In the light of the severe financial crisis bedeviling American businesses, Deutsch recently explained that he had to temporarily change the format of his show from showcasing entrepreneurship to discussing the economy.

There definitely are tremendous challenges now facing large and small enterprises. However, I wonder if Deutsch was completely correct in his declaration that the entrepreneurial spirit was forced to become dormant due to consumers’ lack of confidence and their consequent refusal to spend as customary.

It has been said that big opportunities are born in times when there are great challenges. The test of a true entrepreneur comes when he or she can ignore the prevailing darkness of despair, and focus on the light of possibility.

This is easier said than done, as it takes tremendous strength of mind to keep a positive outlook in the face of overwhelming negativity. Continue reading Profit From Problems →

Conserve Resources and Save Money

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Consumers today are faced with difficult spending decisions. How can we find money to save towards our goals when the costs of necessities such as food and utilities are constantly increasing? Our only option is to find ways to conserve and become more efficient in our usage of these commodities.

Last week we revealed some clever inventions that can help us to conserve on our electricity usage. This week we will also examine how changing the way we use precious resources such as electricity, water and petrol can help us to cut costs.

Conserve energy

One of the best ways to cut energy consumption is to use our appliances in a more efficient manner. Cranston Ewan, Managing Director of Jamaica Energy Saving Solutions in Kingston, confirms that consumers can see drastic reductions in electricity bills by simply turning off machines when they are not being used. Continue reading Conserve Resources and Save Money →

Saving Money on Your Electricity Bill

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Trying to be frugal in spending money can be a big challenge in these times. Despite our best efforts to conserve on the use of some big-ticket expenses such as our electricity bill, it sometimes seems that these costs have only one way to move – UP.

What can frustrated consumers do to fight back against rising electricity prices? The good news is that there are some companies that have heard our complaints and have seized the opportunity to supply the market with viable energy-saving options. Here are some exciting new products that can help us to conserve on our light bills:

OWL Energy Monitor

This energy monitoring device gives you a reading on the energy consumption in your home or office on a real-time basis. Andrew Jackson, managing director of Jetcon, distributor of this product likens the Owl to the speedometer on your car. Continue reading Saving Money on Your Electricity Bill →

Sudden Wealth Syndrome

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“With the present uncertainty regarding our investments, the viability of our jobs, and our financial future in general, I wonder if it might be a good idea to aggressively focus on winning the lottery as a wealth-building strategy. Even though the odds are against us, this might be the only way some of us will ever achieve financial success.”

As strange as it may sound, an investment plan that involves winning the lottery and other games of chance is probably more widely practiced than we may think. I have seen people consistently purchase lottery tickets, interpret their dreams to ‘catch the cash pot’, or bet on horses using disciplined strategies. Some may not consider this activity as gambling, but would prefer to think that they are working to secure a regular income.

Obviously, gambling is not the best route to secure one’s financial future. However, many people still dream of obtaining a wealth windfall. How many times have we heard people say, “If I had a million dollars, I’d never be broke again,” or “If only I could get my hands on a lump sum of money, I could pay off my debts and start a new life.” Continue reading Sudden Wealth Syndrome →

Steps to surviving a tough economy

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Last week we explored some of the financial challenges being faced by many consumers in this tough economy. It seems that everyone, regardless of financial status, is reeling from the effects of the spiraling cost of living and the shrinking value of money.

There are really only two things to do when there isn’t enough money to meet your needs – cut back on spending or earn more money. Let’s take a look at some practical things you can do right now to ease the pressure of these challenging financial times:

Reduce non-essential spending

With this global financial crisis, it’s definitely not the right time to get involved in extravagant spending sprees. It’s smart to be prudent with your money at this time, so don’t spend too much money on non-essential expenses such as entertainment or clothing.

Become more price-conscious

In the past, shoppers could just pick up their favourite brand name items without concern for price; now you must scrutinize prices to ensure you’re getting the best deals. Recently, I noticed that my regular brand of corned beef cost nearly J$70 more than a perfectly good alternative. What’s worse, the cheaper brand found in this supermarket was over J$20 less at another location! Continue reading Steps to surviving a tough economy →

Financial challenges in a tough economy

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“I am really confused about how to make ends meet in these times. The cost of living is at an all time high, my salary can’t pay all my bills, and the returns on my investments are a joke. I really need some practical advice on how to make some more money to survive.”

If you haven’t already figured it out, we are living in tough economic times. The global financial markets are experiencing a frightening meltdown that’s affecting both multinationals and mom-and-pop stores, small savings accounts and large investment portfolios, consumers and retirees.

Here in Jamaica, the financial heads have admitted the obvious – we’re all going to be impacted by the international monetary woes in one way or the other.

Under normal conditions, making enough money to meet all our needs can be difficult. In this financial landscape it may seem almost impossible. Let’s look at some of the challenges that are currently impacting the standard ways of making money: Continue reading Financial challenges in a tough economy →