Tag Archives: loans

2010 Action Plan #2: Control Your Debt

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Your child’s tuition is three weeks overdue and you’re dreading another phone call from the school office. It’s not that you planned to be delinquent, but the front end of your car finally gave way last month, and all your money had to be channelled into emergency repairs. Desperately looking for an answer, you notice a newspaper advertisement for a payroll loan.

Convinced that this may be the answer to your problem, you call the financial company to get more details on the loan. You realise that you can access enough funds to not only pay the outstanding school fee, but to clear off your credit card and repay your cousin the money you borrowed eight months ago. In fact, you decide that you might as well take the opportunity to finally replace your worn living room sofa.

Does this scenario sound painfully familiar? If so, you’re not alone. For many cash-strapped consumers, borrowing money to finance budget shortfalls is standard operating procedure. Continue reading 2010 Action Plan #2: Control Your Debt →

3 Ms of Money- Dealing with Debt

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Writing my first book, The 3 Ms of Money, has allowed me to take a look back in time at all the BIG money mistakes that I have made. One of the worst wrong turns I have made is to think that having access to other people’s money (OPM) would make life easier.

Borrowing money can be a very destructive practice, as it lulls you into a spending lifestyle that isn’t sustainable. When you are dependent on a source of income that doesn’t come from you, you lose sight of the fact that you are living beyond your ability to produce. As your desire for credit grows, eventually the monthly payments become too high to manage, and then your debt mushrooms beyond control. Then you have to keep on borrowing to stay afloat. Very often at this point, you can’t access any more credit and your entire financial well-being is impacted.

The Bible says that the “borrower is servant to the lender” (Proverbs 22:7). I have found this to be true. For years I worked hard to pay off thousands of dollars in loan interest. And for what? Useless trinkets and idle entertainment that were long forgotten!

I teach people that debt is not only about borrowing money. It’s any obligation where someone else has delivered their part of the deal, and you have not. Just recently, I almost got tempted to take a great mobile phone offer where I could get a ‘FREE’ Nokia E71. In return I would have to sign a 3-year contract with the mobile company. After thinking about it some more,I realised that I would only be selling myself into 3 years of slavery to pay for this ‘free’ phone. What if I hated their service? What if they raised the monthly cost? I couldn’t complain because they had supplied their end of the deal.

I decided I would just save up and pay for it in CASH, thank you.

Anyway, you can read more about my misadventures with debt and what I had to do to get myself out of the mess I had created when The 3 Ms of Money is published.

Keep thinking and acting Financially SMART!

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Six Smart Sayings to Help You Manage Debt

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One of the most challenging aspects of managing your personal finances is knowing how to control debt. It’s very tempting to start borrowing – how else can you survive if your salary remains stagnant but the cost of living continues to skyrocket? It’s also hard to maintain a frugal lifestyle when today’s society places a high value on material things.

Many people think that the quickest solution to having insufficient funds to buy what they need or want is to get a loan. While short-term borrowing might temporarily ease the immediate situation, it usually starts a long-term problem that is hard to resolve.

Wouldn’t it be great if there was a simple manual to guide you on the appropriate strategies to manage debt?

This week, I compiled six valuable sayings to help you to remember some important principles about borrowing money. There is a lot of wisdom in these clever adages, and reciting them can be an effective way of memorising the underlying messages about debt. Continue reading Six Smart Sayings to Help You Manage Debt →

New Options for Small Business Financing

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“I need to get a loan to expand my small restaurant. However, many of the micro financing options charge interest rates that would kill my business. Regular banks ask for collateral that I don’t have. No one wants to sign as a guarantor for my loan. I’m getting very frustrated, because I know that if I got financing, my business would really take off. What can I do?”

The universal answer facing small business owners in search of financing is “No Collateral, No Deal.” If you’re an entrepreneur with a viable business idea or an expansion plan, at some point you’ve probably faced the challenges of raising capital without collateral.

There is an increased business-friendly focus in most of the commercial banks. With more people going the route of self-employment, it makes sense for financial institutions to pay closer attention to the development of the Micro, Small and Medium Enterprise (MSME) sector.

Small business can eventually bring big business in the long run.

Continue reading New Options for Small Business Financing →

What Do Bankers Want?

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One of the major complaints that I receive from small business clients is that banks are too rigid in their demands whenever they are seeking financing. A common cry is that many financial institutions are happy to collect their money, but never show the same appreciation when a loan request is made.

Anyone who has made pitch for financial assistance and left the bank rejected and dejected has probably wondered, “What exactly does this bank want from me anyway?”

Recently the Small Business Development Agency in association with Scotia Small Business held a workshop on strategic business planning to assist small organizations to grow their operations.

Peter Mohan, manager of Scotiabank Morant Bay, gave an insightful presentation which revealed some key issues that bankers focus on when considering whether your loan application would be successful or not. Continue reading What Do Bankers Want? →