Some of the articles that have been posted to the site effectively preach ‘DRAMA’. It’s not like we don’t already know what is going on! Drama is ok in a newspaper but it doesn’t get the job done for the everyday Joe!

The way to overcome financial dome & gloom is to have a goal, and a plan to achieve it. Most importantly make a habit of it!

There is an opportunity coming over the next 6-10 weeks for some- TAX REFUNDS! – Yeah!  With the new financial year upon us perhaps there are a few New Financial Year resolutions we could put into our physcie?

A key component to all this is to understand your cash flow. What comes in & what to go out, more importantly when it has to go out. Budgeting becomes an important part of this.

Budgeting needs to be thorough. It has to include annual needs like House insurance, cars through to white good replacements and alike. There are several software packages available which can assist in this area. And if you would like to be pointed in a direction I can suggest you contact me & I would be more than happy to assist. However budgeting is only the start of the process.

Once you have an idea on how and what monies are available you can start to build on a strategy to get yourself in order or ahead. It might be to make sure you have got Xmas & school holidays covered.

Then you need to make sure you have automatic payments organized where practical. So that you can’t forget to make payments. Have them set up around you pay cycle.

However if the numbers don’t add up and there is more going out than coming in, (not just now but perhaps in the next month or two) then there are a few different strategies that can be opted for. Some involve insolvency processes, not all do & there are approaches which help re-engineer debt and reduce repayments for the longer term.

In a lot of instances, it will not be just one approach that will help you through these tougher times but a combination.

Step 1 – Know your credit rating

Before most organizations will lend you money they will look at your credit rating to assess whether you have a good conduct in paying debts.

A bad credit rating can increase the cost of lending and or hinder you in gaining further credit. The sort of things that are noted could be having your power cut off; your car repossessed or perhaps have missed payments on credit cards or mortgage. Can also include clear outs. (This is where a lender has tried to make contact by phone & writing without success. As a result they have listed you as a missing borrower)

Obtaining a copy of your credit file can be free if you are prepared to wait 10 days, however for a fee you can have it a whole lot quicker.

Step 2 – Clear up any disputed credit records

If you believe that a company has unfairly listed an overdue notice on your credit file, you should contact them as soon as possible to seek clarification for any incorrect information. This should be amended immediately.

If this is not rectified appropriately you can contact Banking & Financial Services Ombudsman (http://www.bfso.org.au) or the Telecommunications Industry Ombudsman (www.tio.com.au)

Step 3 – Improve your credit rating

Ensure that you are meeting all credit payments on time, so you can demonstrate that you able to make good on your commitments to another prospective lender.

This may be done with the assistance of your bank. They will be able to establish automatic payments to your respective loans.

Step 4 – Get help from Family and friends & locate budgeting tools

See if you can get a partner/friend to check that you are paying your bills on time. There is several good budgeting software options that are available to assist with managing your cash. Financial counselors may also be a reference point (www.afccra.org) for you.

However if you are unable to make it work there are several options which may be available to you through debt mediation or debt agreements. Debt agreements in effect is a form of insolvency. Care needs to be taken when dealing in these areas as fees are payable for the process. It is a good idea to get a few quotes for comparison.