15 Minutes

I’m at Southport flower show, and it’s raining again. Feels like it hasn’t stopped for days. The noise is magnified by the caravan roof, and inside always sounds much heavier than it is when I venture outside.

This morning like every other day, I spent 15 minutes or so examining our finances. I follow a simple cashflow exercise that marks off payments that have gone out on the previous days, make any payments that are required today and then update the future projections to reflect my view on sales and expenditure over the coming weeks.

It probably sounds more complicated than it is.

To put in more simply, I run the business based on our available funds. This number is a total of cash in the bank, our overdraft facility and our credit card available balances. This calculation gives me a daily figure of how much money we have on hand should we need it.

All the projected sales and expenses are listed until the end of the year, so I can see at a glance if we are going to be short of money in the coming weeks or months.

Updating this information each day gives me a very close connection and feel for how we are doing. It doesn’t show if we are profitable, but it does show we can pay our bills. It made the difference last year when we got into severe financial difficulty and helped me navigate a path back to profitability and financial security.

Personal finances are no different. If you are facing difficulties, then the most important thing is never to bury your head in the sand. Hiding won’t help you fix the problem, and it won’t make you feel any better.

The stress of hiding away from the problem is going to have precisely the opposite effect, leaving you more anxious and more fearful than necessary. Always open the letters, however much you dread their contents!

The only way to tackle a financial crisis is to be brutally honest with yourself. What have you got available to spend, what bills need to be paid, is there anything left? If not, then what are you going to do about it? Remember doing nothing is NOT AN OPTION.

First, cut expenditure, renegotiate loan and credit card repayments, stop paying all luxury items, forget about pride here, this is about survival, stop spending on all non-essential things, conserve cash, think and think again before buying anything. Is this purchase one hundred per cent vital, can you live without it?

Second increase income by working extra hours, getting a second job, selling off your possessions on eBay or Facebook. Turning your assets back into cash buys you time. Most financial problems are caused by temporary changes in your income or large unexpected bills.

Acting early and decisively rather than hoping things will get better is likely to reduce the nightmare and will also provide the route out of the problem if the situation continues or likely gets worse.

It’s sod’s law that whatever can go wrong will go wrong. So, prepare for the worst and then be pleasantly surprised when things are not as bad as you expected!

Debt is a lonely place; financial problems are the most stressful thing you will ever encounter. I have been there and know what you are going through.

Stay strong. Believe in yourself and your ability to work your way out of the problem. There is light at the end of this dark tunnel, and you can overcome the difficulties you face.

Together, we climb the mountain, not in giant leaps but one small step at a time.

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