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• How To Avoid Bankruptcy: Small Business Guide
• 4 Steps Toward A Secure Retirement
• Earning Your Way to Financial Freedom: Working from Home
• How Long Does it Take to Improve Your Credit Score?

How To Avoid Bankruptcy: Small Business Guide Posted: 12 May 2021 01:35 PM PDT Bankruptcy is when a business or individual cannot pay back their debts, and the courts step in to reclaim assets or create a payment plan. When we start a business, the last thing that we all want is to end up having to file for bankruptcy. Unfortunately, tens of thousands of bankruptcies are filed among businesses every year. In a time of great uncertainty, business bankruptcies hit a 10 year high in 2020. In this guide, we're exploring how to avoid bankruptcy and keep your business afloat even in tough times. Why Small Businesses Go Bankrupt A quick look through bankruptcy records will show you that there are a lot of reasons why small businesses go bankrupt. Every industry is different, but there are certainly some commonalities. Perhaps the main reason for small businesses is that business lending is expensive. It's hard to borrow money affordably so it is easy to spiral out of control. Other common reasons include: Poor management and organization. For instance, if you aren't prepared for a big tax bill or other expense, you may have to borrow money or avoid paying other debts. Overexpansion. Often, expanding a successful business can cause businesses to overstretch themselves and owe more money as a result. Lawsuits. If your business finds itself having to face legal action then it can be incredibly costly. Disasters. From flooding to natural disasters such as the recent Covid pandemic. Common Types of Bankruptcies of Small Businesses A quick overview of the types of business bankruptcies you will see when you search for bankruptcy records. There are three main types of bankruptcy claimed for by small businesses: Chapter 13 This is usually best for sole proprietorships. It gives a plan for you to repay debts over time using your earnings, which can prevent you from losing your own personal belongings. Some people even lose their house in business bankruptcy. Chapter 7 This is when a bankruptcy court appoints a trustee who distributes the assets the business owns to the creditors. A sole proprietor will then be discharged of the debt so they aren't obliged to keep paying after this. It's good for businesses that will cease trading. Chapter 11 Chapter 11 bankruptcy gives businesses a chance to recover. A business files a plan of how they will reorganize and pay creditors, and a court-appointed trustee oversees this. A portion of debts are then repaid, but the business is often allowed to continue to trade. Approved Strategies To Avoid Bankruptcy for Small Businesses Of course, there are so many different ways in which businesses can fall into debt and struggle financially, but there are some ways you can avoid debts and make sure you have a positive plan for financial health in the future: Prioritize expensive debts. If you have credit card debts, for instance, repay these first if they are costing a lot of money. Don't borrow more than you can afford. This is good advice in any area of life. Renegotiate contracts. If you can't afford the prices of an item or a contract you have with a supplier, try to renegotiate it regularly. Don't bury your head and hope it will go away. Financial trouble will catch up with you. Make sure you have a solid business plan. This should come with a financial plan to help you account for the future. Sell things you no longer need. This can be a good way to raise an influx of cash when you need it.  Wrapping Up The rest of 2021 and beyond could be a really tough time for a lot of small and medium-sized enterprises, with risks of some going bankrupt. If you are running a business, it is vital that you stay organized and know where you stand financially, to give yourself the best chance to survive and even thrive in the future. Bankruptcy is a good tool for those who have no other option, but it is best to avoid it if you want to give yourself the brightest possible financial future. Our tips can help you not to become another bankruptcy statistic and to see your business through turbulent times. The post How To Avoid Bankruptcy: Small Business Guide appeared first on MoneyMiniBlog.

4 Steps Toward A Secure Retirement Posted: 12 May 2021 01:29 PM PDT The initial foundation of a successful retirement savings plan is laid by your present age and planned retirement age. The more time you have between now and retirement, the more danger your portfolio can tolerate. In general, when you get older, your portfolio should be more focused on income and capital preservation. This means putting more money into assets like bonds, which won’t give you the same returns as stocks but will be less volatile and provide you with the income you can survive on. Here are some retirement savings plan tips: 1. Calculate Your Retirement Spending Requirements It will be easier to define the required size of a retirement portfolio if you have reasonable expectations for post-retirement spending habits. Retirees sometimes mistakenly believe they would spend 20-30% less after retirement than they did before. Retirees can also spend their first years after retirement splurging on travel or other bucket-list items. Since retirees are no longer required to work for eight hours or more a day, they have more freedom to ride, sightsee, shop, and partake in other costly activities. More investment in the future necessitates an additional retirement savings plan now, so accurate retirement spending goals aid in the planning phase. When preparing for retirement, it’s also important to recognize your longevity so that you don’t outlive your savings. Individuals’ average life spans are rising. Additionally, if you want to buy a house or finance your children’s education after retirement, you will need more money than you think. These expenses must be factored into the overall retirement strategy. Remember to review your schedule at least once a year to ensure that you are on target with your savings. 2. Calculate The Investment Returns After-Tax Rate Investment returns are usually taxed, depending on the type of retirement plan you have. As a result, the real rate of return must be determined after taxes. Determining your tax status as you start withdrawing money, on the other hand, is an integral part of the retirement planning process. 3. Examine Your Risk Tolerance In Relation To Your Investment Objectives A good portfolio selection that combines risk tolerance and returns goals, whether you or a skilled money manager is in charge of investment decisions, is arguably the most important step in retirement planning. You must be comfortable with the risks you are taking in your portfolio and understand what is important and what is a luxury. Not only with your financial advisor but even with your family members, this is something that should be discussed seriously. 4. Keep An Eye On Your Estate Planning Another important phase in a well-rounded retirement savings plan is estate planning, and each part necessitates the expertise of various practitioners in that area, such as lawyers and accountants. Life insurance is also a crucial component of estate planning and retirement planning. You are having a decent estate plan and a life insurance policy that guarantees that your assets are allocated according to your wishes and that your loved ones are not financially disadvantaged after you pass away. A well-thought-out strategy can also help you escape the costly and time-consuming probate process. Final Thoughts Individuals are bearing more of the burden of retirement planning than ever before. Few workers, particularly in the private sector, may rely on an employer-provided defined-benefit pension. Switching to defined-contribution plans, such as 401(k)s, also ensures that you, not your boss, will be in charge of investment management. Striking a balance between reasonable return targets and a desirable standard of life is one of the most challenging aspects of designing a detailed retirement plan. Focus on building a flexible portfolio that can be changed on a regular basis to represent changing market conditions and retirement goal. The post 4 Steps Toward A Secure Retirement appeared first on MoneyMiniBlog.

Earning Your Way to Financial Freedom: Working from Home Posted: 12 May 2021 01:15 PM PDT It is safe to say that almost no one wants to work for the remainder of their lives. Of course, people have passion projects, but honestly, who wants to stress over finances for the entirety of their life? The desire to live financially free has led to an increase in gig work and work from home jobs. Both gig and work-from-home jobs make it easier for one to have multiple streams of income, which is essential to reaching financial freedom. Aside from reaching financial freedom, people are drifting towards work from home gigs because they are able to save money on other financial responsibilities, like car insurance. As someone who works remotely in my home, I have cheaper car insurance on a car I rarely drive. So I am positive others who work from home do the same. Saving money on financial responsibilities also helps one reach financial freedom faster because you get to keep more money in your pocket. What is Financial Freedom? The phrase "financial freedom" is used often but many do not fully understand what it means to truly be financially free. By definition, financial freedom is having a residual income that covers all living expenses. This does not mean that you have to be rich to have freedom. What it does mean is having enough funds to cover your expenses so you can spend your free time enjoying life instead of spending your time working just to make ends' meet. This idea is also alternatively referred to as "financial independence," and the easiest way to remember its definition is to remember it simply means being confident in the fact that there is enough money in your bank account to meet all of your financial needs. Make a Plan to Work Towards Freedom This money can cover your financial needs for a limited period of time or for the rest of your life. Understanding financial freedom is essential before attempting to gain financial independence. Talk with Your Family about Your Plans Now that you have an idea of what being financially free looks like, you are ready to start working towards that goal. To start making strides, though, you have to get your family involved with this goal. If you have a spouse, children, or both, all of you have to have the same mindset when it comes to the finances of the household. The family cannot reach financial freedom if only one out of the five members is practicing healthy financial habits. Sometimes parents can experience a struggle with your children when you decide to tighten your pockets. This can make the environment tense within your home, leading to more conflict. If previously your family had no financial goals and spent money whenever, it may be difficult for your children to accept the changes initially. However, if you clearly communicate with your children about your financial goals and how the new habits and goals will benefit them, it will help to diminish the instances when you feel guilt or pressure for having chosen this new mindset towards financial responsibilities. Figure Out What Amount Will Allow You to Be Financially Free How much money will you need to cover all of your household expenses for X amount of time? The answer to this question is an essential part of reaching financial freedom. To figure out this figure you should ask yourself how much you spend on groceries, utilities, bills, etc., each month. You should also leave room for splurge spending money for each month. Organize Your Finances After you decide and calculate out the amount of money you need in order to reach financial freedom, you should organize your finances in order to begin working towards that dollar figure. There are plenty of methods to stop spending and start saving, but here are some to start you off. Track Your Spending To make this process smoother, you can connect apps to all your bank accounts and it will separate transactions into certain categories. From those categories, you can see what you spend on a monthly basis and make the appropriate adjustments in order to save. If you do not want to connect an app, you can do this process manually by reviewing your monthly bank statements and dividing transactions into categories on your own. Review Your Expenses This method relates closely to the one mentioned above. After seeing what you spend monthly, you can begin reviewing your transaction categories and see what needs to be decreased or even eliminated. You can also see which debt needs to be paid off first if it is taking a huge chunk of your monthly income. One specific thing to consider is when to pay off your auto loan, as it is probably one of your biggest expenses. Reviewing your expenses is a crucial step in paying off debt, and observing your monthly expenses as they gradually decline can make paying off debt a fun process. Make a Budget To create a personal budget, you should use the 50/30/20 method of financial management. This method teaches that you will use 50 percent of funds for necessities, 30 percent for spending money, and 20 percent for savings. Of course, everyone is not able to balance their money like this, but they can adjust this ratio to their personal needs and adapt it to their lifestyle. Find Additional Ways to Make Money Unfortunately, many individuals' yearly salary is barely enough to cover all of the household bills. So without supplemental income, it can be hard to pay off debt faster and save money. This is why having multiple streams of income is a necessity when aiming for financial freedom. Additionally, if you lose one stream of income, you will have other streams to fall back on. To start your hunt for supplemental income, you can make a list of things you are good at. From that list, you should search the internet for gigs in those sectors. To make having multiple streams easier, these gigs you pick up should be remote positions. That way you can work these gigs during times that are best for you and after working hours when you are working your full-time/part-time position. From the income you bring in from remote work and various gig jobs, you can start to save enough money to reach your money goals as well as diminish debt in order to reach financial freedom. About the Author: Imani Francies writes and researches for the car insurance comparison site, CarInsuranceCompanies.net. She earned a Bachelor of Arts in Film and Media and specializes in various forms of media marketing. The post Earning Your Way to Financial Freedom: Working from Home appeared first on MoneyMiniBlog.

How Long Does it Take to Improve Your Credit Score? Posted: 12 May 2021 01:01 PM PDT A low credit score does not only affect borrowing. Insurers, employers, and even landlords also check this indicator. A poor total may prevent you from getting the best conditions on a loan, renting an amazing apartment, or getting the job of your dreams. FICO scores are not always fair, and they may be repaired. But how long does it take? The term "repair" refers to the deletion of inaccuracies from credit reports. Sadly, this is not uncommon. Consumers find duplicates, incorrect details, and even outright false information. An eviction, judgment, or bankruptcy that never happened may tarnish your score for years. If there are just a few errors, you may resolve the issues in just over a month. It is the best-case scenario. Average Repair Duration Most consumers need several months to have their reports cleaned. The process may take half a year in complex cases. It depends on the number and nature of false derogatories. Consumers that use professional repair services may achieve the result faster. Learn about recommended Credit Repair companies and services in your state. Disputing errors by yourself requires painstaking analysis, knowledge of credit laws, and formal communication with different parties. Here is why you will never repair your score overnight. Repair Step by Step Every case includes four mandatory stages. First, the provider will collect your data from three major reporting agencies. Next, the team will analyze the documents thoroughly to find any errors. After evidence is collected, the professionals will send customized dispute letters to the bureaus. 1.   Getting Your Reports Any US citizen can get a free copy of their records from each of the bureaus (Experian, TransUnion, and Equifax) once a year. Until April 20th, 2022, this service is available every week due to the pandemic. The easiest way to obtain the data is by requesting it through www.annualcreditreport.com. Getting all three copies is essential. Every lender may share their data with just one agency. Derogatories on Equifax records are not reflected on a TransUnion report and vice versa. Bureaus do not share information with one another, which complicates the process and makes repair services more convenient than DIY. 2.   Finding Disputable Items Experts scrutinize the information to identify inconsistencies. Note that any company offering to delete correct info is a scam. Only mistakes may be removed. They range from misspelled addresses to false bankruptcies or late payments. Most negative entries stay on the records for 7 years, so the consequences are far-reaching. Professionals will identify the most damaging entries and suggest a plan of action. It will include the following steps. 3.   Collecting Evidence You cannot request removal without any proof. It is necessary to submit bank statements and other information proving that the items are indeed false. If the evidence is incomplete, the bureau will request additional information, which will prolong the process. 4.   Formal Disputes Any communication with reporting agencies must be written, so you have hard evidence of the exchange. Letters should be sent by certified mail. Any organization will respond within 30 days. It will investigate the claims and liaise with the lenders involved. If the outcome is positive, a free copy of your corrected report will be mailed to you. This explains why you need over a month to remove a single item. A repair firm will deal with formal communication on your behalf, which speeds up the process. Alternatively, you can do everything yourself. Use the templates provided by the Consumer Financial Protection Bureau. Sometimes, it is possible to resolve the issues by communicating with lenders only. Companies send debt validation letters that ask them to prove that you owe the specified amount. Additionally, the creditor may agree not to share the disputed data with their bureau anymore. This may also be achieved using goodwill letters. Note that lenders are not obliged to comply. My Report Is Accurate. What Can I Do? If the analysis shows all the derogatories are accurate, there is nothing you can do with them. Either wait for them to age off your records or start rebuilding the borrowing history. Take out new loans and pay them back diligently. Missed or late payments affect 35% of your FICO score, which is why they are so damaging. A few years of perfect payments will push your score upwards. Besides, you could lower your credit utilization ratio or add utility bills through Experian Boost. A well-established repair firm will suggest the best ways to increase the total in your situation. The Bottom Line Repair is not an overnight process. Finding the inaccuracies, proving and disputing them takes months. If your report is tarnished unfairly, be prepared to spend a few months fixing it. Professional services accelerate this process, especially when there are multiple mistakes to expose. The post How Long Does it Take to Improve Your Credit Score? appeared first on MoneyMiniBlog.

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