The most important factor when choosing to manage your personal finances effectively is time. A greater time investment will almost always result in a greater financial return.

Therefore the sooner you start to manage your finances, the greater return and financial ease you will feel in the future. Many people fail to plan ahead, which results in struggling to juggle finances at a later point in life.

Money management should focus on four primary questions:

1.       What financial goals would you like to achieve?

2.       When can you expect to achieve them?

3.       What finances do you currently have?

4.       What level of risk would you make to achieve these targets?

Choosing somewhere to live is an essential in everybody’s lives, and therefore, buying a house will be the biggest financial purchase that people will make. The financial investment into a home will affect all your other finances.

Making big decisions on your lifestyle will affect your financial goals. If you consider a luxury holiday to be one of life’s essentials, you will have less money left over for savings and investments.

When do you want to retire? What expenses do you currently have? Deciding what your priorities are will help to determine what money you will have left.

It is worth assessing your current liabilities, as these expenditures and assets could be reduced or sold and free up money for the future.

Calculate how much spare money you have so that you can form an investment plan. Investments can vary dramatically. Some are high risk for higher reward or loss, and some are low risk for a steady growth on investment. It’s up to the individual to decide what level of risk you are prepared to make.

Once these considerations have been made and your plan is in places, it’s important to assess the decisions you’ve made and how they affect you on a day to day basis. You plan may be too restrictive, leaving you with not enough money to live on, or perhaps you could make greater short term sacrifices to benefit you in the long term.

A small amount of time spent on your current finances can be highly rewarding for your future.

As we steer the good ship “UK Economy” through a bout out fiscal turbulence many experts are expecting to see a major increase in the number of people looking at bankruptcy as an option to escape their financial troubles. But is it really the answer or is there an alternative?

While IVA (individual voluntary arrangements) and Bankruptcy are never the easy choice there are times when it can be difficult to avoid them. Bankruptcy is the one which many people try their best to avoid, the one which still carries something of a stigma. But is it really as bad as they say? Does it impact upon your credit rating forever?

The bankruptcy laws have changed over the last decade and the major problems with bankruptcy many years ago have been reduced. It is not the end of your credit history, it is not the end of the road and it will not see you out on the road with nothing to show for yourself. While it depends how much money you actually owe and whether you can ever see yourself being able to pay it back, a ball part figure from which bankruptcy could be considered would depend on your situation. It could be as little as a few hundred pounds or it could be something well into the thousands of pounds.

Upon taking the bankruptcy route you will be assessed by a Trustee who will be in charge of your case. They will review you situation, what your debts are, lifestyle costs, how much you could afford to pay (if any) and the size of your debt. If you are not in a position to pay they will not push you for payment, although if you have ready assets they have the option of selling some of them off to raise cash. However, there are allowances which will ensure that they will not consider items under a predetermined cut off point. It is not in their best interest to hold you back for years to come – they would much rather draw a line under what you can afford to pay back and advise the courts of this.

Your creditors will be contacted and asked to comment on your case and whether they have any concerns with you pursuing bankruptcy. Unless it was something special they would be highly unlikely to block the bankruptcy hearing if the trustees believed this was the best way forward.

The average bankrupt will be discharged in under 5 years, and while there will still be restrictions to what finance and bank accounts you can open even after you are discharged, these will slowly disappear so long as you get your finances back in order. Bankruptcy is not the easy option, but for more and more people in this day and age it can be the only real option.