How to Set Financial Goals

Money ManagementFirst thing first you got to know about what does credit and debt really means? Credit means to own money someone else that you will have to pay in coming future. Debit means your asset that you will recover in future due to previously provided services or giving loans to someone. The most important thing in managing money is to manage your debt and credit. If you don’t have idea about your credits and debts that how you will manage your credits and recover your debts than you are going to find yourself in difficult situation in the coming future.

Credit handling

You got to be aware of the fact that the loan you are taking or have already taken will have to be returned in time. So you got to prepare proper plan for the using of credit money. You should consider following:

  • Money should be invested in profitable business.
  • No need to go for huge profits which are not sure to be raised on regular basis.
  • A little profit but on regular basis is more desirable.
  • You should know the process of returning credit out of your profit.
  • First think than borrow.
  • Don’t make hasty decisions.
  • No need to invest all money as you should prepare yourself for loss.
  • In case of loss you should have alternative plan.

Debit handling

One needs to be more careful in giving loans than acquiring it. As to recover loan or debt is not so easy and one really has to put all his efforts to get his money back. You should think about the use of money that how it will be more profitable for you. You should take into account the following things before approving loans:

  • Proper documentation should be made.
  • Should have security in case of default.
  • Asset should be obtained as mortgage.
  • Interest rate should not be too high or too low.
  • Assessment of return on investment should be determined carefully.
  • You should have knowledge that how debtor is going to return your money back if he suffers loss.
  • Alternative plans should be demanded.

Debt should be secured legally so that in case of default or dissolution you should be able to recover as much of the amount as possible. You should manage your credit and debt in such a way that your profit remains in your use and you pay off your loans from your advances. The best way to do is to set same installment and rate of interest both loans and advances so you can freely utilize your money to earn profit and your credits & debts are maintained systematically.

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