Everything begins in your head. Do away with the idea that being rich has something to do with money. It is a mistake to determine wealth or poverty by figures and comparisons with other people. Any poor person will know someone who is even poorer than he is. Every rich person knows someone who has more assets. And nobody is poor just because he or she doesn’t have much money.

With the following tips, you can simplify your finances and have it under control and you will experience a new dimension of wealth:

1 – Write down your expenses. You don’t need to turn this into a form of private bookkeeping. It’s really not imperative what you do with the lists you make. The important thing is that the written form makes you aware of the money you’re spending. A good many silly, spontaneous purchases are prevented because your unconscious mind thinks, “Oh dear, tomorrow I’ll glance at my spending list and I’ll regret this nonsense!” Bottom line is awareness of your finances must not lure you to be crazily extravagant.

Moreover, people who buy things they can’t afford and then can’t pay the bills for them are complicating their finances. They insult their creditors by not giving them what is due.

2 – Avoid being tempted. Pay by cash whenever and wherever possible. The temptation to pay with a credit card is great; hence, you lose your feeling for the amounts you are spending. Take your credit card only when you need to pay a huge amount that you don’t want to carry around with you in cash. And when you pay, imagine the card in your hand turning into a bundle of dollar bills and then, in your imagination, you pay out the amount in cash in the checkout counter.

3 – Always be fair in your financial transactions. It’s better for you to pay more attention to your relationship with people than to the numbers alone. Make friends by treating other people fairly in financial matters. A small generosity in the right place will do wonders for your relationship with a supplier, a trades-person, supplier, or service provider.

4 – Think positively about money. Even if you still have debts or you have no idea how you are going to earn a living soon, don’t fall into condemning money. Keep in mind that what you think will become a reality for you – if you hate money and wealth, then these things won’t come your way. A person who hates money will tend to think negatively about his capacity to work.

Your work is what you think of it. In like manner, your economic situation is what you think of it. Aim to simplify your finances, and it will be.

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The possibility of bankruptcy is very real. If you think this could never happen to you, think again. In fact millions of Americans have already filed bankruptcy at one point in their lives and most of them never expected that possibility either.

The truth is, everyone can be at risk of bankruptcy even those who have lots of money in the bank. Take a look at the following most common reasons why people end up filing for bankruptcy:

Unfortunate Circumstances
Even rich people are affected by unexpected events that are beyond control. There may suddenly be an illness in one of the member’s of the family and their finances can slowly decline in just a matter of months or even weeks.

Natural disasters like hurricane, earthquake, and other accidents can happen at the most unexpected times. The change in the economy or the loss of job are all major events in life that can have a huge impact on a family’s financial status.

Shortsightedness
Knowing that the unexpected events can strike at any time, it is only fitting to do the necessary preparations. Do you set aside some of your money in preparation for such emergencies? Or do you spend every penny of your monthly income, confident that you’ll have enough salary the next month?

Do you have a savings fund you can rely on in case you got laid off from work or in case you got sick and unable to work for some months? Financial experts recommend having fund in your savings account which is enough to last your whole family for at least six months. This buys you some time if drastic changes in your lifestyle needs to be done.

Wrong Decisions
The looming possibility of divorce, gambling, reckless spending, self-destructive behavior, the lack of attention with the debts owed – all of these actions, sooner or later can lead to bankruptcy.

Investing in a business without doing extensive research or ensuring the legality of the business can also lead to sudden bankruptcy. These can all have been prevented if we only choose to make the right decisions. We have control over these things and if these actions are avoided, the risk of bankruptcy is greatly lessened.

Clearly, there is something people can do to avoid filing for bankruptcy. The first thing would be the awareness that bankruptcy is real and that nobody is exempted from this possibility. The government has introduced the New Bankruptcy Law in October of 2005 and according to this law, any one who wishes to file for bankruptcy must first seek credit counseling from a government approved agency at least six months before filing his bankruptcy application.

Latest statistics show that there has been a drop in bankruptcy cases from 100,000 each month in the past years, to only 30,000 cases per month in 2006. This dramatic drop can be due to the new rules and restrictions that have been included since the Bankruptcy Abuse Prevention and Consumer Protection Act took effect.

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Business

Applying for a small business loan can be exciting and yet stressful at the same time. For the best results and to heighten your level of confidence, be prepared when you visit the lender you’ve chosen for your business loan interview. After you have your business plan prepared, start preparing for the loan by writing a loan proposal to present to the lender.

The loan proposal should state some crucial information, and many details, about both yourself and your business or business idea. It should state who you are, how much money you need and where the money will be spent, how you intend to repay the loan, and what you plan on doing in the even that you cannot repay the loan.

The following are key elements to include in your loan proposal.

1. Summary.

This should be listed first in your proposal, but will be written last. It should contain clear, concise, accurate, inviting information about your business or your business ideas. It should summarize how the proposed loan will be used, how it will be repaid, and how it will benefit your business. Remember your competition in the summary of your loan proposal, and point out features of your business that are different from your competitors.

2. Management Profiles.

The management profile section of the loan proposal should explain, most importantly, who you are. Be prepared to reveal everything about yourself and your experience. Have a current resumŽ included as part of the loan proposal, as well as a summary of your skills, qualifications, and other credentials for yourself, as well as for all other owners and key members of your management team.

3. Business Description.

It’s not necessary to state the same information mentioned in your business plan as in your loan proposal. However, you do need to present a solid description of the business. Include a brief history of the business in your loan proposal, and detail the current activities. If it’s a new business, explain the details of the business that will be developed. Your goal will to be to clearly demonstrate that you fully understand your markets, your competitors, and the industry, including current trends or risks and how you plan to overcome those potential dilemmas. If the loan is for an existing business, include literature that details your products or services, such as current sales sheets, brochures, or catalogs. Include attachments to your loan proposal for this section, such as letters from suppliers, customers, or other business references. Demonstrate through these letters that you provide excellent customer service, and that you pay back your creditors.

4. Business Projections.

Create at least two years’ worth of projected income statements and cash flow statements. Your projections should be clearly stated and, most importantly, realistic in nature. Generally, you probably won’t need to present the “worst case” or “best case” scenario unless the lender asks for you to write the projections that way. You should, however, be prepared to answer questions pertaining to what you’ll do if some of your projections don’t work out as planned. For example, if you anticipate obtaining a large, new contract or customer based on improvements made with the business loan, and that contract never goes through, it could change your loan proposal projections drastically.

5. Financial Statements.

Your loan proposal should include both business and personal financial statements. Be aware that the lender will fully analyze the history of your financial statements, calculating all ratios. Be prepared to point out any significant trends you’ve shown in an introductory paragraph.

6. Loan Purpose.

One of the most important parts of your loan proposal is a detailed description of how you will use the loan proceeds. Have a good understanding of the type of loan that you need, and remember to include the proceeds of the loan in your cash flow projections, as well as the interest in your projected income statement.

7. Repayment Plans.

Repayment plans should also be stated in your financial projections section of the loan proposal, but details of repayment plans should be detailed separately. Propose the terms you want, and prepare for negotiations with the financial institution. The lender will consider a number of factors as they review the overall risk of lending you the money. Understandably, this will impact the repayment terms that they are willing to offer for your business.

Especially if your credit is good, and even if your credit is not so good, remember that in your loan proposal, you are offering the bank a deal that will make them money. Don’t go in asking the lender for an “allowance.” Instead, enter the interview with your loan proposal objective in mind; namely, focusing on how much money you’ll need, and remove the idea of going into the meeting wondering how much they’re willing to lend. Never go into a meeting asking for a loan, wondering whether or not they’ll lend to you. If this first lender won’t approve your loan proposal, have confidence that a different will.

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