At one time or the other, we all have been caught up in a financial jam when the numbers do not seem to add up and the bank statements give us sleepless nights and headache. A financial or money problem is an issue that affects most people, organisations, businesses and companies. The good news is that it can be fixed, whether temporarily or permanently depending on the situation at hand. Just as there is no problem without solution, there are certain steps that should be followed in order to fix and solve these problems, these are:
- Discover the root of the problem: As with any difficulty, there must be an origin. This is the point where it all began and to fix the problem, one has to find where the problem originated from and block it. This is the first step to fixing any financial mess, you have to discover the root of the problem and stop it from reoccurring. Only after this can you move one to next step.
- Find all leaks: In any bad financial situation, many loopholes and leaks through which money is being wasted exist. These are the holes that must be found and filled, money that goes into useless endeavours should be blocked and frivolous spending should be stopped. This will ensure that nothing is being wasted and resources are used maximally.
- Debts and loans: The interests that accrue on debts and loans can sometimes rise higher than the debt itself if not paid on time. Money owed should be paid and sort out first before focusing on how to balance out the debit and credit aspect of financial statements.
- Take note of income: Every allowance, wage, bonus and salary coming in must be well taken into account. Every single penny matters and once the net income is known, it becomes easier to monitor expenditure, manage debtors and plan a budget specific to the income.
- Cut coat according to cloth: After finding and estimating all aspects of income and expenditure, the last step is to balance out how much is being spent according to how much is being received. To do this, one needs to plan a budget that is in accordance with income and abide by it with discipline.
No matter how bad a financial mess is, it is always possible to salvage the situation and fix the problem. However, the best way to prevent this ugly situation from coming up is to spend within the means of what is being earned. If you spend more than you make, you would never be able to get out of the mess.