Financial Management

The service of providing funds or capital for commercial or private reasons comes under the umbrella term – Finance. It is also a branch of economics that studies the management of money and other assets. It can be also defined as the management of funds and capital required by a business and private activities. Management of finance has also developed into a specialized branch within the financial sector and is carried out by finance managers.

Simply put these managers arrange money to be lent to businesses or private individuals using either money already available from company accounts or from external lenders. The simple process of optimization is used to receive the most from these funds by reducing the cost of arranging the finance whilst at the same time ensuring returns are high. The fact is that it governs most of the worlds activities and poor finance management will immediately show up as conditions deteriorate in procurement, production and sales as it affects every sphere of business activities. The finance manager’s job is to maximize profits whilst keeping the risk to a minimum so you can understand why there is a high level of stress associated with this work.

One of the most famous management gurus Lee Iacocca referred to finance managers as Bean-Counters who almost look at the expense part with a rather pessimistic view. Finance managers are people who always like to see where they have been and do not look towards the future in the same way that a sales manager does. For most small business owners there is not a clear distinction between personal and business which often leads to the funds being used in areas that are not part of the arrangement. When money is lent under these circumstances, lenders feel quite aggrieved as they have lost control of where the money is being invested.

Although resisting the tendency to use funds this way may dampen someone’s enthusiasm in the short term, it will focus the attention of the borrower and perhaps instill more discipline in the future. Fortunately, small businesses can always use the more approved methods of friends or relations to help provide finance. However, finance managers are in the position of making money for their company so out sourcing their lending can help increase their profits. The famous comedian Bob Hope best summed up the subject when he once said; a bank is a place that will lend you money but only if you can prove that you don’t need it.

My research into what type of writing help people are seeking online recently revealed that there has been a big upsurge in recent years of people looking for help and info for something called “financial hardship letters”. Prior to that, these types of letters were hardly on the radar screen. I believe that the increase in demand for these types of letters is directly attributable to the mortgage insolvency crisis in the USA and some of the spin-off effects as they affect the financial situation of many individuals.

A financial hardship letter is one that is written to a creditor for the purpose of explaining the financial trouble that you are in, and requesting that the addressee provide you with some sort of specific remedy, depending on the exact situation involved.

There are many different situations that can warrant a financial hardship letter. The two most common situations these days are: 1.) to request that your mortgage holder let you “short sale” your house, or 2.) request to your bank or credit card company to consolidate or restructure your debt.

Other typical financial hardship letters include: requests to a college or university to reduce their admission fees due to special circumstances, appeals to a hospital or medical care provider to reduce their billings for compassionate reasons, or, a request to an insurance company to cover the costs of an unusual medical procedure or treatment, and many others.

6 Tips For Writing Financial Hardship Letters

Regardless of the specific situation, ther are a few important guidelines that you should follow if you want to draft a financial hardship letter that will be taken seriously:

1. Keep It Short

Keep your letter short and to the point. Try not to exceed one page. A long, wandering letter will water down the essence of your case and will lose the reader.

2. Make It Personal

Make sure that you personalize your letter as much as possible by including details about you and your family that will get the reader to identify with your situation as a fellow human being.

3. Clearly State Problem

Early in your letter, summarize the specific situation that has prompted you to write the letter. Provide more details in the later paragraphs.

4. Give Enough Information

Your letter should provide enough detailed financial and related information so that the reader can easily understand your situation. Attach clarifying documents as necessary including: cash flow statements, bank statements, income tax statements, invoices, letters, etc.

5. Make Your Request

In the subject-line and the first paragraph of your hardship letter, state exactly what you are requesting. Reiterate this request in slightly different words at the conclusion of the letter.

6. Be Humble and Thankful

To reach the point where you have to write a financial hardship letter means that you are in deep financial trouble and this is basically your last resort. Don’t get into any blame games or side issues. Be respectful and thank the addressee in advance for considering your situation.

To see two sample hardship letters; one mortgage-related and the other credit card related, click on the following link:

http://www.writinghelp-central.com/write-hardship-letter.html

When I first started planning for my retirement I was extremely ambitious. Life was too short and I made a commitment to myself that I would like to retire by 45 instead of 55.

My goal is to enjoy life to the fullest and travel beyond my wildest dreams.

So I did what we all do. I stocked away extra into my 410 k, saved a little extra every now and then and even listened to a financial advisor who told me to put my money in mutual funds.

You know what, I was making some progress, but even saving extra and doing all the right things I could only retire by the age of 60.

I even remember an advisor sitting in front of me with all the charts, numbers, and software and painted a rosy picture of retiring at age 60 and enjoying the rest of my life.

But wait a minute.

What good is retiring at 60 when I wanted to retire at 45.

Even if I took a part time job and worked whenever I wanted, I would still consider that retirement.

I did not want to accept this.

So one day as I was looking through my expenses and trying to balance my check book, my attention was drawn to my biggest bill…my mortgage.

I did what I always do when paying my mortgage.

I cursed like a drunken sailor and blamed my mortgage payment from standing in my way of not retiring when I wanted to.

I spent some time analyzing my bills and income, not wanting to give up on my dream.

And for me, it turned out that my mortgage was my biggest payment each month.

Instead of actually making a mortgage payment, what if I saved that mortgage payment each month. Surely this would get me closer to retirement.

But that would mean that I would either have no house or would have to pay rent.

But it does not have to be that way.

I soon discovered that there is a way to pay off my mortgage early without spending a cent more. I could pay off my mortgage 13 years faster and while saving at the same time…
…and guess what with no mortgage, I could use my mortgage payment to save for my retirement.

We all know about two ways of paying off our mortgage early, Pay extra towards your mortgage or use the bi-weekly program.

But there is a third fascinating method.

Use a mortgage accelerator program and pay off your mortgage without spending a cent extra

And then you know what, you can get to retire by the age of 55 and in retirement you get to keep all the money for yourself.