There are many consequences of financial mismanagement, including legal and social consequences, know some problems generated by poor financial control.
Poor financial management can easily lead to excessive spending. Preparing in advance for large expenses is critical.
It is much more rewarding to save for your next big purchase and then run your credit cards. If you are not careful, you can generate more debts, which can easily get out of control.
When you lack financial education and are badly managing your assets, budget or even salary, you have to keep in mind that serious consequences can come to your person; we present you some below:
- Legal consequences
When you owe money, it is considered as debt. Keep in mind that a debtor is a person who owes money and a creditor is the person to whom the money is owed.
When you are in debt to someone, you have obligations to the person to whom you owe money (creditor). If you do not comply with these obligations, there will be certain consequences for your poor financial control . These consequences include the creditor taking legal action against you to recover the money owed to you.
If you can not pay your debits, you can have the possibility of filing an application in court to declare bankruptcy, talking to a lawyer in the first instance is very important.
When you are in bankruptcy it means that a business or a person can not pay your debts. Once you are bankrupt, it means that some of your items can be sold to recover the debt. The court takes control of the handling of the situation and all your future expenses.
The above is a consequence of poor financial control.
- Social consequences
The social consequences related to financial debt can be overwhelming and, in turn, cause a series of problems
In society, men are considered the breadwinners of the family, which means that the main job is to provide income to meet family requirements. If they do not, it can cause a pressure that can cause mental illness.
- One result of this is low self-esteem that causes negative thoughts and feelings of indignity and failure. These thoughts can lead to a nervous breakdown or breakdown of relationships. Sometimes both men and women feel that they are consumed with debit and trapped in an endless cycle with no way out. This cycle affects the individual and can cause events that can lead to domestic violence and suicide.
- What happens if I can not pay my loan?
If you can not repay the loan before the due date, according to the monthly agreement between the creditor and yourself, you must immediately contact the lender. When you have “poor cash flow” and you have difficulty paying the loan, you may receive a predetermined notice.
If legal proceedings have begun, you need legal advice. There are many sources where you can receive legal advice, such as a lawyer, financial advisor or any organization regarding legal matters.
Other options that you can consider are listed below:
1. Pay the amount owed.
2. Negotiate a change in your refunds.
3. Request a variation of difficulty.
4. Negotiate a deferral of repossession.
5. Refinance the loan.
6. Sell your products and pay the loan.
7. Voluntary delivery.
The ability to generate positive cash flow year after year is essential for a lifestyle to be viable in the long term. For example, it is impossible to develop a business successfully unless it is profitable and generates a surplus cash flow in a sustainable manner.
Without a strong and positive cash flow, a company will never prosper or grow.
An inadequate cash flow is a symptom of management problems in a business, it is NOT the cause.
When you have a late payment or no payment of supplier invoices, direct debit not satisfied, late payment of taxes and retirement of employees, even worse, late payment of salaries to staff, is more extreme evidence of flow problems of box; It is a legal action against you by the suppliers or the tax office.
Knowing these dangers will help you develop effective cash flow management and maintain healthy cash flow
It is not about being a millionaire in the first instance, but about knowing the risk that represents not fulfilling our obligations to any consequence. Therefore you are recommended to have a good financial control, advise with a lawyer.
In the first instance, since no one likes the consequences of those that can suffer from having this bad management, I recommend the following:
- Be honest with yourself and do not aspire to have loans that you know you can not pay with your income.
- Remember to keep a balance.
- Make the respective alerts for when you should make payments to your obligations.
- Try to overcome the consequences of your bad actions almost immediately.
- Get expert support before making decisions whose consequences are outside your driving range.
Prudent financial planning is vital to success and to guarantee a better and more relaxed future
My advice would be to seek professional financial help from experienced advisors and ensure your future, so you can expand your capabilities and achieve a better life. Remember that financial control is key to optimizing all your income. Who knows where he is going, always finds the way.
However, remember that you can not always leave in the hands of others everything that determines or predicts an excellent future for you. Financial education is paramount and as we have already said repeatedly you can not lack it, since the cost is sacrificing your lifestyle and therefore your well-being.
The only way to guarantee a financially secure future is through adequate financial planning. If the planning is inadequate, it could mean a disaster. While setbacks are inevitable, it can be devastating if you do not have proper planning. It is important to seek expert guidance to ensure a better future.