Most people who are living from paycheck to paycheck are unprepared for any unexpected expense, and when it comes they can dig themselves into a financial abyss in no time. They always have money to make purchases, pay their bills, and afford credit cards but one skipped the salary cheque and they start struggling with their finances. The key to deal with financial trouble is to identify the factors leading to it and strategize to slow it down or deal with the crisis in advance.
When your financial priorities are misplaced
Your financial planning adelaide is misplaced when you spend more on overpriced restaurants, long vacations, ideal home furnishing, or other luxuries. For a salaried person, it is vital to have some savings after covering up for shelter, food, medical care, and transportation. If you are still left with money after all fulfilling all the previous commitments, you can spend a bit on entertainment. But if you are tight-budgeted, make your spendings carefully and savings are crucial to making in case of any emergencies or you will end up borrowing from friends.
Employ the 65/35 rule on your income
That means that alteast 35% of your income must go into monthly savings. With 50% to cover up the monthly expense of your household, transportation, etc, and 15% for entertainment. If you apply this rule to your income, you will come out clean in case of any financial distress.
Refrain yourself from bank loans
Borrowing from banks in the form of credit cards brings you timely relief with dissatisfied and extended financial issues in the long run. The late payment charges add to the nuisance. The monthly installment too. It’s better to control yourself while spending otherwise bank loans can damage your credit history in the long run and add to your financial misery.
Financial struggles are real both on personal and professional levels. Although it’s easy to come out of financial crises when it involves a person, it’s much more difficult to cope up when a business deals with financial distress. But like any disease, it always has some warning symptoms and if you identify it on time and take careful measures to cure the symptoms, there is a good chance that you avoid any financial issues even before it becomes an issue for you. Let’s have a look at how you can save your business before it faces a downward spiral.
Stagnant Sales & rate of growth
The key to a successful business is market and customer acceptance. Your revenue and customer satisfaction are directly proportional to each other. When you observe a decline or stagnation in your revenue, you know where things are going wrong. You may need to re-evaluate the products and services of your business or the supply and demand of the same. Research the market and see if customers need what you are selling. Stagnation in sales is a clear sign of your business experiencing financial distress in the future. There is another aspect which needs your attention and that is the growth rate of your sales. If it is increasing year after year, you are in safe waters. If not, prepare yourself to deal with it.