Category Archives: News

Citizens Advice Calls For a Cost Cap on Doorstep Loans

Citizens Advice Calls For a Cost Cap on Doorstep Loans

Consumer charity, Citizens Advice, has called for a cost cap to be set on doorstep loans stating that the loans are responsible for increasing levels of unmanageable debt in the UK.

According to a Citizens Advice report on doorstep lending, the charity claims to have evidence indicating that doorstep lenders use high-pressure sales tactics coupled with poor affordability checks and aggressive debt collection practices. The charity states that it has helped approximately 23,600 borrowers with unmanageable doorstep loans in 2016. Citizens Advice estimates that more than 1.3 million UK citizens use doorstep loans.

The charity has called out UK’s financial services watchdog; the Financial Conduct Authority (FCA) to introduce a cost cap on the interest and fees charged on doorstep loans in the same way the watchdog put a cost cap on payday loans.
According to Citizens Advice, the new limit should ensure borrowers don’t pay more than (double) the amount borrowed in total charges. Currently, doorstep loans aren’t included in the FCA’s definition of high-cost credit which means they aren’t covered by the payday loan cost cap introduced recently.

Citizen Advice argues that an extension of the cost cap to cover doorstep loans will safeguard borrowers in financial distress even though there is no doorstep loans lender charging more than double the amount borrowed.

The charity has also gone ahead to state it would prefer to see the end of traditional doorstep loans marketed door-to-door as well as the current Financial Conduct Authority guidelines on responsible lending transformed into rules. The Charity also wishes for more stringent supervision on collection practices.

The three largest doorstep loan providers in the UK include; Morses Club PLC, Non-Standard Finance PLC, and Provident Financial PLC.

In response to Citizens Advice, Morses Club PLC C.E.O. Paul Smith stated that Morses Club customers value the lender’s service as is evident from the independent customer satisfaction surveys the company conducts. The survey scores over the past two years indicate that over 95% of Morses Club customers are happy. According to Smith, Morses Club prides itself in treating customers fairly in business processes as well as how the company’s agents/teams conduct themselves.

Morses Club also goes ahead and assesses the affordability of all its loans using high-tech technology ensuring that loans are issued only to those customers that are able to pay back. According to Smith, Morses Club has invested in costly software to ensure doorstep loan lending practices are above board. Smith also went ahead and stated that the affordability of Morses Club doorstep loans has decreased over the years dispelling the need for a cost cap as suggested by Citizens Advice.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Payday Loan Fraudster Used Tinder to Lure and Fleece Women of Thousands

Payday Loan Fraudster Used Tinder to Lure and Fleece Women of Thousands

30-year-old fraudster Jonathan Frame used Tinder, a popular dating application, to lure and fleece lonely women. The Swinton conman would meet lonely women, steal their identity and then run up debt in their names. He would use the stolen personal information to take out payday loans as well as apply for credit cards and overdrafts according to a Manchester Crown Court hearing.

Frame would go as far as rifle through the mail of his unsuspecting victims,  set up fake email accounts and even call up lenders on behalf of his victims to get credit cards activated. In such instances, he would lie that his girlfriend at the time was deaf.
Frame spent part of his proceeds on designer clothes and restaurant meals with his unsuspecting victims. He was also ”kind” enough to buy his victims expensive gifts with part of the money.

During his 1st February 2017 Crown Court sentencing, Frame pleaded for a suspended jail
sentence claiming he had an honest job at a high-end street store. His plea, however, fell on deaf ears as presiding Judge Michael Leeming ruled that community punishment wasn’t an option since fraud was what Frame did for a living.

Frame has been jailed for one and a half years. He admitted to fraudulent offences amounting to £6,990 against two women he met in 2014 on Tinder. During his sentencing, one of the women he fleeced told the Crown Court she had contemplated suicide because of Frame’s actions. The other woman confessed to being scared of dating in the future.
Frame fleeced his first victim £6,221 in a record seven weeks. The woman is liable for the debts accumulated under her name despite being unaware of what was going on. This is because she shared personal details with Frame. The woman fell for Frame’s charm as well as his persuasive nature. She confessed to thinking Frame loved her genuinely, so she trusted him and gave him access to her house and car. Frame used this access to intercept her post and facilitate the fraud.

According to the woman, Frame has ruined her life. She also feels betrayed and doesn’t expect to live debt-free until she turns 31 in 2022. She also expects to struggle securing
a mortgage given the debts she has accumulated. She was just 23 years old when she met Frame. Frame targeted his second victim shortly after fleecing his first victim. His second victim discovered Frame was a fraudster when he left one day for good. She was fleeced of £569 in 13 days.

This is not the first time Frame is finding himself on the wrong side of the law. Frame has been convicted for 21 offences previously mainly for fraud, theft, and far-dodging. The offences date back ten years. In his latest case, Frame’s barrister Paul Hodgkinson defended his client claiming he was genuinely interested in the relationships with his victims despite the impression that he was out to con lonely women. Hodgkinson went ahead and stated that Frame was apologetic for his actions and was only keen on impressing his partners. Judge Michael Leeming wasn’t convinced of Frame’s innocence resulting in an 18-month jail term for the payday loan fraudster.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Cash Converters Reverses Losses with Payday Loans

Cash Converters Reverses Losses with Payday Loans

Australia’s leading retail Pawn Broking Company, Cash Converters has returned to profitability thanks to
payday loans after suffering multimillion-dollar losses in 2015. The fortunes of the company have been
turned around by the current online payday lending boom in Australia.
Cash Converters is popular for its bright-yellow pawnshops. The company shifted its business strategy
from traditional pawnbroking to profit from the millions of Australians looking for fast loans online. Cash
Converters plans to retreat from Britain and expand its network in Australia’s fast-growing online lending industry.

The company decided to change strategy after its share price plummeted 50% in 2015 following legal
amendments made in the UK payday loans sector.
According to Cash Converters MD Peter Cumins, the company will focus on Australia’s payday loan
industry where it is already a dominant market player. Cumins is convinced that Cash Converters has the
greatest chance of enjoying sustainable profitability in Australia. He plans on making payday loans an
integral part of the Australian financial sector by delivering high-quality financial products and services
while observing the highest standards of compliance.

According to Cumins, Australian government statistics show that Australia’s short-term lending market is
growing and the range of Australians accessing short-term loans is also broadening driving demand for online loans sophisticated lending products.

In the six months ending December 2016, the total value of Cash Converters’ payday loans increased by
62% to $8.2 million. The company’s online personal loans book grew by 42% to $44.6 million. Cash
Converters isn’t the only payday lender doing well. Money3 is also set to announce impressive results
and enjoy tremendous growth in 2017. The company has already bought online lender, Cash Train
which has already boosted the company’s online loans book by $7 million.

Besides selling its British stores, Cash Converters is also planning to sell its personal loan book worth
$16.9 million (£8.7 million) to boost investment in Australia. According to Cumins, the British network
has been struggling due to tough trading conditions. The company plans to sell its stores in Britain and
assume the role of a master franchisor. Cash Converters is also abandoning Carboodle, its auto financing
business because of weak growth. The company is planning to venture into secured motor-lending
business instead.

Cash Converters will offer a wide variety of loans amounting to $5,000. It is estimated that 1 million+
Australians take out payday loans among other types of short-term loans every year. Back in 2012,
Australia’s short-term loans market was estimated to be worth $800 million to $1 billion. The industry
has grown tremendously since.

Cash Converters made a $15.9 million half-year profit in 2015 up from a loss of $5.3 million the previous
year. Dividend payment stood at 2¢ a share.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
New Year Resolutions: Do People Actually Stick To Them?

New Year Resolutions: Do People Actually Stick To Them?

According to statistics, only 10% of people who make New Year resolutions stick to them. This is a shocking statistic given most people make New Year resolutions. So, why is it so hard to stick to New Year resolutions?

1. Unrealistic resolutions: This has to be the most common reason why most people are unable to stick to their New Year resolutions. One of the best ways of achieving any goal is making sure it is realistic. Realistic goals are small and progressive which makes them more manageable. One great way of ensuring you set realistic resolutions is considering your current situation. If you are currently overweight, focus on losing weight gradually first. If you are already fit, it’s OK to push yourself further i.e. focus on building muscle. Focusing on build muscle when you are overweight is unrealistic.

The same applies to making resolutions to become a millionaire when you haven’t even started saving or you don’t have a business plan. There’s nothing fundamentally wrong with having faith in yourself as well as pushing yourself to the limit. However, unrealistic resolutions make your journey extremely hard.This, in turn, leaves you with no option but to quit if you don’t have the willpower. Unfortunately, most people lack the willpower to consistently pursue their goals no matter what.

2. Lack of a plan or poor planning: It’s also impossible to do anything meaningful in life including sticking to New Year resolutions if you don’t have a plan and a solid one for that matter. Resolutions must be backed up by serious action plans that highlight the precise actions you plan on taking to achieve your goals.

Unfortunately, many people make blunt new year resolutions without preparing serious plans aimed at making sure those resolutions see the light of day. For instance, it’s not enough to say you want to save £10,000 this year. You have to sit down and plan how you will actually do it. For instance, do you intend on cutting down your expenditure on entertainment, clothes, shoes, etc.? What’s your plan for saving every month? What adjustments do you intend to make in your lifestyle?

Your plan has to be as detailed as possible for you to increase your chances of success.

3. Wrong perspective: Sometimes it’s just a matter of perspective. Ideally, you shouldn’t wait for the end of every year to make a resolution. Every single day presents an opportunity to learn and make new changes that drive you closer to being the person you have always wanted to be. Waiting for one day every year so that you can make resolutions makes it harder to progress. This is simply because you have to wait another year to make drastic changes when things don’t work out. This shouldn’t be the case. Although we don’t plan to procrastinate, New Year resolutions encourage procrastination which is one of the most common causes of failure. Life changes should be made every day when the need arises and not once a year.

4. Poor time management: Many people also have a hard time sticking to their new year resolutions because of poor time management. In most cases, making realistic resolutions, having a solid plan and the right perspective isn’t enough. You need to set some time apart to implementing those resolutions. Most resolutions require a bigger time commitment than most people anticipate. As a result, it’s extremely hard to stick to your resolutions if you don’t factor in the time aspect. You must create time if you don’t have any and make the necessary adjustments to your daily/weekly/monthly schedule to make sure you don’t interfere with other important commitments while implementing your resolutions.

5. Lack of accountability: Most people also have problems sticking to their new year resolutions because they lack accountability. You must be accountable to someone other than yourself i.e. your family members, friends, etc. if you want to pursue your goals to the end. It may take some courage to share your personal goals. However, your chances of reaching your goals increase when you are accountable to someone other than yourself. Many people lack the self-discipline to check on themselves and make the necessary adjustments to their schedules so, find someone you will be accountable to.

Summary

New year resolutions are great. However, they must be backed by serious action plans. New year resolutions also need to be realistic. You must also become a better time manager and hold yourself accountable if you want to stick to your new year resolutions to the end. Lastly, you need to have the right perspective about life. Every day presents an opportunity for learning so don’t wait for a date to make the necessary changes to your life.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Even After Brexit the UK is Still Among the Strongest Economies in the World

Even After Brexit the UK is Still Among the Strongest Economies in the World

The Office for National Statistics (ONS), the Organisation for Economic Co-operation & Development (OECD) and the Bank of England (BOE), say the UK economy is booming despite earlier post-referendum fears and warnings that the UK would face severe economic shocks for passing the Brexit vote.
The media also seems to have joined the pro-Brexit bandwagon mocking dire warnings from British Conservative Party politicians like George Osborne.

Numerous reports show the British economy is sound and prospering after the UK decided to withdraw from the European Union on 23rd June 2016.

ONS statistics

According to the latest ONS statistics, the UK hasn’t experienced any post-Brexit economic shocks as earlier anticipated. ONS statistics show that consumer spending is strong. The statistics also show that the housing market is stable and unemployment is low. These findings by the UK’s official statistics body mock George Osborne’s pre-Brexit warning of immediate and profound economic shocks on the UK economy if UK citizens didn’t vote against Brexit.

Bank of England sentiments

The BOE has also affirmed ONS statistical findings by admitting that the business sentiment in the UK has improved drastically post-Brexit. The BOE also stated recently that the fall in the value of the pound has boosted tourism. The Bank of England has also changed its tone on economic growth. Before the referendum, the BOE warned that UK economy would slow down and companies would be less willing to invest or hire. The bank has however changed its earlier sentiments.

OECD

The OECD hasn’t been left behind. The body has raised its UK growth forecasts despite being among the many international forecasters that predicted an economic catastrophe post-Brexit. The body now expects the UK economy to grow at a faster rate than the same period last year. A 1.8% growth forecast puts Britain alongside other major economies like Germany.

The sudden change in tone by three notable bodies clearly shows that post-Brexit forecasts were wrong. This has led some legislators such as Tory MP, John Redwood to demand an apology from the people who threatened Pro-Brexit UK citizens with dire consequences.

Banking sector sentiments

The banking sector hasn’t been left behind either. Banking heavyweights such as Bank of America, UBS, Merrill Lynch, JP Morgan and Morgan Stanley have also raised their forecasts for the UK economy.
There is also a separate ONS report showing that the UK’s deficit fell because of an increase in corporate as well as income tax. Car production statistics also show that there is a booming demand for UK-made cars overseas. Statistics indicate that car production is at a 14 year high.

Housing prices are also increasing steadily while the construction and manufacturing sectors have remained on the same growth path as before. The consumer confidence is also stable, and fears of a sharp decline as earlier feared have decreased.

The ONS chief economist, Joe Grice has also attested to the fact that the Brexit referendum results haven’t had a significant effect on Britain’s economy as earlier anticipated. However, Grice is quick to point out that the there may be long-term effects of Brexit that are yet to been seen or felt.

Before Brexit, major banks had downgraded UK forecasts. Morgan Stanley now expects the UK economy to grow by 1.9% up from its 1.2% forecast in August. UBS has also raised its forecast to 1.9% up from 1.3% stating that the UK economy is more resilient now than earlier anticipated.

Treasury forecasts

Independent forecasts by the Treasury also show the UK economy in a positive light. The Treasury is far more optimistic now than before the Brexit vote.

Brexit voter sentiments

A new study has revealed that pro-Brexit voters were interested in cutting funding to the EU as well as migration and Brexit supporters still stand by their vote. Almost 80% of all UK citizens want the government to stop sending money to the EU since UK has no say in how the money is spent. There is equal support for controls to be put in place to determine who enters the UK. Furthermore, most UK citizens are optimistic about the future of their economy and country going forward regardless of the hurdles that remain before Britain makes a full exit.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Payday Lender The Money Shop On Sale Due to ''Tough Times''

Payday Lender The Money Shop On Sale Due to ”Tough Times”

DFC Global, the American owner of payday loan lender Money Shop, has put the company up for sale as the company shifts focus from the increasingly regulated payday loan business in the UK.

Although DFC Global says it received a bid approach offer from an unnamed suitor, the company also admits that the Money Shop has been facing difficulties over the past few years now.

The recent crackdown on rogue UK payday loan lenders and tightening regulation has pushed DFC Global to reconsider participating in the UK payday loan industry. Since buying the Money Shop back in 1999, DFC Global has closed down more than 50% of its stores in the UK in the past couple of years as the company looks for ways of coping in an increasingly difficult business environment.

About DFC Global

DFC Global is an American-based financial services company with operations in 1000+ locations in 7 countries. DFC Global focuses on low income or bad credit consumers offering short term loans such as payday loans. The company also provides pawnbroking as well as gold buying services. DFC brands include; The Money Shop in the UK and Ireland, Insta-Cheques, We The People and Loan Mart. The company owns high-end pawnbroker, Suttons & Robertsons and also operates online short term loan lenders such as Payday Express and Payday UK.

In 2009, DFC Global was UK’s largest payday loan provider with a market share of approximately 25%. The company which was previously known as Monetary Management Corporation changed its name in 1990. DFC Global is owned by U.S. private equity firm Lone Star Funds.

The sale

DFC Global is believed to have hired KBW (Keefe, Bruyette & Woods) investment bankers to sell Dollar UK which owns; the Money Shop, online payday loan companies Payday UK and Payday Express as well as several pawnbroking businesses owned by DFC.

According to a DFC spokesman, DFC is aware of the ongoing media speculation on the sale of the Money Shop. However, the company insists that the details remain confidential between all the parties involved. DFC, however, reveals that an approach bid has been made and the company plans on assessing the offer in the ”normal” manner.

UK payday loan lender struggles

Most UK payday loan lenders have struggled to stay in business since the Financial Conduct Authority (FCA) began tightening regulation and cracking down on lenders using unfair lending practices.

In January 2015, the FCA capped the interest rate to 0.8% per day ensuring payday loan borrowers never pay over £24 in interest charges for £100 loans granted for a month. The FCA also capped the total fees and charges applicable ensuring borrowers never have to pay more than they borrow in fees and charges.

Since then, many payday loan lenders in the UK have closed shop. The Money Shop has closed more than 300 branches in the UK alone. Currently, the lender has reduced its branches from over 600 to 230 in an effort to remain profitable in an increasingly difficult business environment.

The Money Shop has faced other struggles besides having to close down most of its branches. For instance, the lender has also been forced to pay fines for unfair lending practices. Just recently, the Money Shop was ordered to pay some of its customers (147,000 customers) £15.3m as compensation for unfair lending practices ranging from system errors to bad affordability checks and debt collection practices.

According to DFC, the lender has since changed its operations by choosing to focus on pre-paid credit cards as well as longer term loans. Although this move among many other moves taken have been deemed viable, the Money Shop is still posting losses. According to the lender’s recent accounts, the UK business suffered a full year loss amounting to £104m in 2015.

Speculators have no choice but to make the worst assumptions regarding the sale of the Money Shop. Although it is clear that the Money Shop is struggling to adjust to the FCA’s new rules and guidelines on payday loan lending like most payday loan lenders in the UK who had been used to lenient rules and guidelines, a sale, that will hopefully reverse the fortunes of the lender is underway.

DFC is also banking on the fact that the Money Shop has changed operations to focus on more profitable/less risky lending.

The Money Shop is a major sponsor of football club, Wolverhampton Wanderers.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Brexit: Everything You Need to Know

Brexit: Everything You Need to Know

Overview

The word Brexit has dominated news headlines in the UK for months now. If you still don’t understand what Brexit is all about from the meaning to the process, economic impact, etc., look no further. Let’s begin by defining the term.

What does Brexit mean?

Brexit is a shorthand term defining Britain’s exit from the European Union. On 23rd June 2016, a referendum was held to decide if the UK should remain or exit the European Union. 52% of the UK citizens who voted (30 million people or 71.8% of the population) were in favour of Brexit (the UK leaving the European Union). To understand the impact of Brexit in-depth, it’s important to define the European Union (EU).

The EU is simply a political and economic partnership between 28 European countries. The EU was formed after WW2 to boost economic co-operation among member countries as well as avoid war between member countries. Since then, the European Union has become a single market allowing free movement of goods and people to/from member states as if they were one state/country. The EU has its own parliament and currency used by 19 member states. The EU Parliament sets the rules on a wide range of areas/issues affecting member states from transport and environment issues to consumer rights and mobile phone charges.

Reasons for the UK wanting to leave the EU

Britain wanted to leave the EU because of a number of reasons relating to economic, immigration and identity issues. In regards to economics, some UK citizens were concerned about the money Britain and every member state sends to Brussels (EU headquarters) to fund programs some UK citizens don’t necessarily support.

In regards to immigration, some UK citizens felt that non-UK citizens were immigrating into the UK and using the country’s already scarce resources like welfare.
In regards to identity, some UK citizens felt that they were losing their British identity by continuing to be part of the EU.

Final vote

England and Wales voted strongly for Brexit by 53.4% and 52.5% respectively while Scotland and Northern Ireland voted to stay by 62% and 55.8% respectively. The final vote was in favour of Brexit i.e. 52% of UK citizens voted to leave the European Union.

Impact of Brexit

Britain exit from the European Union impacts a variety of areas. For instance, it affects how Britain will be conducting business with European Union member states going forward. Before, when Britain was an EU member, Britain could trade freely with EU member states. Brexit introduces some new trade challenges which have an impact on the economy. The British pound has also fallen to record lows (near the 30-year low) increasing the costs of doing business for UK companies operating outside the UK.

Britain has also lost its AAA credit rating making it more expensive for the UK government to borrow money. The Bank of England has however responded swiftly with an interest rate cut (current rate 0.25%) down from 0.5% the lowest levels since 2009 in an effort to stimulate the economy.

Brexit also affects the free movement of UK citizens within the European Union. Before, UK citizens could move freely and work in the EU without the need for visas. This changes immediately.

The Brexit process

The UK will leave the EU fully in 2019. The exit process is supposed to last for two years. It may, however, vary depending on the precise exit agreements made. The UK has to invoke Article 50 (of the Lisbon Treaty) to exit the EU. The article gives the UK two years to leave the EU. It may, however, take longer or shorter depending on final agreements on immigration and trade.
The UK also needs to decide which parts of EU legislation to keep or change via a bill known as the Great Repeal Bill. The UK is in the process of finalising the bill.

A government department has been set up to negotiate Britain’s exit. The department is headed by David Davis, a Veteran Conservative MP and vocal pro Brexit campaigner.
Although the entire exit process is expected to last for two years according to Article 50, it is expected to last longer since Britain is expected to engage all EU member states first.
Meanwhile, Britain is still bound by EU laws and treaties until it finally ceases being an EU member. Britain can’t, however, take part in any EU decision-making processes.
Was Brexit a good decision? Well, it depends on who you ask. Only time will tell.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Preparing For a Financial Crisis: Important Facts/Information/Steps

Preparing For a Financial Crisis: Important Facts/Information/Steps

Overview

The risks of a recession have increased since the UK decided to leave the European Union (EU) in the recent referendum dubbed Brexit. When the UK finally leaves the EU, Britain will not enjoy the same trade and immigration benefits the country used to enjoy as an EU member. Furthermore, the UK has already started experiencing economic downturn which prompted the Bank of England to reduce interest rates for the 1st time since 2009 to stimulate the economy. Although the UK economy is still stable according to many economic experts, the risks of an economic downturn are high given the uncertainty resulting from Brexit.

So, how do you prepare for the worst?

To be able to prepare for a financial crisis, you need to understand what happens during an economic recession. All recessions have some characteristics in common. For instance, there is a rise in unemployment fueled by a decrease in overall output. Unemployment results in other problems such as reduced spending since people have less money to spend. Businesses also grow slower or experience stunted growth because of poor demand for goods and services. Many businesses fail during a recession.

Besides increased unemployment, stock markets also plummet since people barely have money to sustain themselves, so they start selling off their stocks. Real estate markets also suffer due to low demand. Most people don’t buy property during a recession because income levels have dropped. Those with property to sell either hoard the property because they don’t want to sell at low prices or sell at very low prices. This is precisely why it’s a great time to buy property during a recession.

In a nutshell, a recession may result in a job loss, debt defaults as well as a significant shrink in your net worth when your investment portfolio shrinks in value. So how should you prepare?

Step 1: Start by creating a worst-case scenario

One of the best ways of preparing for a financial crisis is predicting the effects of a financial crisis on your finances/lifestyle in the worst case scenario. This step is important for determining the amount of money you need to survive should you lose your job or business. Can you survive for 6 months, 1 year, 2 years, etc. without a job? How much money do you need to get by?

Step 2: Set up an emergency fund

Based on the information you collect in step one, you should start setting up an emergency fund. Your emergency fund should be able to cater for your basic expenses for at least 6 months. It is advisable to set up a fund that lasts you longer, however, 6 months is a good place to start.

Step 3: Balance your investment portfolio

If you have an investment portfolio, you should consider balancing it at this stage. Rebalancing your investment portfolio consistently is important for locking any capital gains you had made in certain asset classes when the economy was booming.

Step 4: Invest in your career/profession/expertise

As mentioned above, recessions result in a high unemployment rate. It is, therefore, important to invest as much as you can in your line of work to ensure you don’t become redundant. As employers look for ways of cutting expenses, redundant employees have a hard time staying employed during a recession. You must, therefore, go the extra mile to prove your worth. For instance, you should be willing to work harder for the same pay otherwise, you will have a hard time keeping your job.

Step 5: Find multiple sources of income

It’s also advisable to find more work to boost your income. As mentioned above, wages plummet during a recession. You may, therefore, be forced to work more to make the same amount of money you used to make before the recession. If you’re an employee, find alternative sources of income. For instance, you can find places to render your skills after work. You can also turn online for some great money making opportunities within or outside your field of work.

Step 6: Make adjustments to your lifestyle

You also need to make sure you live on less than you used to. Recessions are periods characterized by a lot of scarcity so you can’t afford to live in abundance. You should spend only when you have to. You can start by cutting unnecessary expenses i.e. using public transport instead of your car, eating home cooked meals instead of restaurant meals, shopping in discount stores, etc. You can also sell an extra car among other luxuries you can’t afford to keep.

Step 7: Renegotiate your debt

If you have major debt obligations i.e. small term loans like payday loans as well as long term loans like car loans, a mortgage that are increasingly hard to meet in the event of a financial crisis, you need to visit your creditors and negotiate for better terms. Most lenders are willing to help out their customers during hard economic times especially if you have maintained a good repayment record all along. Instead of waiting for a looming default, you are better off negotiating for better terms.

Summary

Preparing for a financial crisis isn’t a daunting task when you have clear steps to follow. The above information highlights the basics. To avoid leaving in fear, it is important to start an emergency fund as soon as possible. You also need to assess your living expenses, balance out your investments, make lifestyle adjustments and renegotiate your debt. You should also think of getting additional sources of income as well as working harder in your career or business. You shouldn’t rest until you have an emergency fund in place.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.