The 5 financial tips for the 4th week of July 2012 are given below.
Tip no 1 - Come to agreement over the debt payments and property with your spouse, before filing for divorce.
If you don't want creditors knocking at your door after getting divorced, then have a discussion about debt payments and martial properties prior to filing for divorce. Decide who will take the responsibility of the debts after divorce. If possible, try to pay off the joint debts before submitting the divorce papers in the court. Close your joint credit accounts. Your spouse may misuse the accounts post divorce and you may end up getting collection calls at various times of the day. Creditors would want to get back their money at any cost. They would not have mercy upon you just because of your divorce.
Tip no 2 - There is an old saying in the financial world: If you fail to plan, you plan to fail.
This is absolutely true. If you fail to plan your financial future, then you're doomed to fail in life. You need to plan your finances at an early age, preferably in your twenties. This is the best time to start building your financial house. You need to get a job and find out ways to meet your financial goals. This is the right time to plan for your retirement years also. Otherwise, you'd have to live on the mercy of your children and creditors during your golden years of life. Consult a financial planner to devise a smart financial plan as soon as possible.
Tip no 3 - Start by developing a road plan that will take you to debt-free zone.
If you're living in a debt zone and want to get out of it, then you'll have to create the right road plan. The right road will help you reach the debt-free zone. You have to consider several factors while making this road plan. For instance: your income, expenses, cash-reserve, debt amount, etc. You have to access your financial affordability before developing the road plan. Thereafter, you have to plan how to reach your creditors. Keep it in mind that creditors and collectors can only help you reach the debt-free zone. So, make sure you give special consideration to them while developing the road plan.
Tip no 4 - Keep your savings rate achievable.
It is good to save. After all, it helps you build a strong financial house. Create a savings plan right after getting a job. It is even better if you can devise a savings plan during your college life. However, do keep your savings rate achievable. Never set a rate which you can't possibly achieve in real life. Set a savings rate which you can achieve after working hard for it. Once you achieve your target, reward yourself with something. This will motivate you to save more in future.
Tip no 5 - It is better for the businesses to opt for equity financing rather than taking on debt from the beginning.
Equity financing is much better than debt financing. In debt financing, businesses have to pay back the loans within a certain time period. However, in equity financing, businesses are not required to pay back the money to the investors. They don't even have to risk their assets for attracting the investors. The money can be used for the growth and development of the business. In case, the business does not flourish, then the entrepreneur will not have to liquidate his/her funds to repay the loans. The same thing can't be said about debt financing though. The entrepreneur may have to drain his/her funds to pay off the debts through bankruptcy.