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5 Steps to avoid repossession!

Claims for property repossession in England and Wales increased in June to the highest level since late 2014.

Repossession is an awful situation to find yourself in, it’s when all attempts have failed and the bank steps in to take the family home back.  When you find yourself in this position, it’s too late to save the property using The Money Plan.

The Money Plan is a financial lifestyle, a healthy living plan to follow before an emergency.  If you’re having a heart attack, there’s no benefit in following a healthy eating plan, you need emergency treatment immediately and repossessions is a financial heart attack.

Avoiding a financial heart attack

The Money Plan will help avoid the financial heart attack, so if you’re worried about the rise in repossessions, perhaps it is time to take your finances seriously.

Anyone can be derailed by a financial crisis; unexpected job loss, chronic illness or a family death, but if your finances are in order when this crisis occurs, you’re more likely to weather the storm than if it occurs when you’re financially sick.

There were 6,179 claims in county courts for repossession, a 39% rise compared with a year ago and the biggest annual increase since the financial crisis, it’s time to get your financial house in order.

Although unemployment is very low, there seems uncertainty in the air with tour operator Thomas Cook filing for liquidation and the UK and American politics in a mess, it is uncertain times.

The household savings rate, which measures how much households save out of their disposable income, stands near a record low and the number of people falling into financial distress has increased over the past 18 months.

You can’t control the global economy, but you can control your own, get your House of Wealth in order and remained focused on your own outcome.

My 5 steps to getting your financial house in order

Step 1

Know what you want!  I know it seems silly, but what do you want financially?  When do you want to retire, will you move home, do you want to help your children?  Think about your future.  Most people spend more time planning a two-week summer holiday, than they do their three-decade retirement.

Step 2

Get yourself financially well organised.  Get to know ALIE; your Assets, Liabilities, Income and Expenditure.

There are principally three things you can do to improve your financial position, which are;

  • Increase cash inflows, which means bring more money in!  Ask yourself, what would need to happen for you to earn more money?
  • Know what your state pension entitlement is, request a forecast.
  • Reduce cash outflows; which means spend less day to day, refund your direct debits bills and dare I say it stop unnecessary subscriptions.  But this also include paying less tax if legally possible, reducing interest charges and fees and charges on investments.

If you struggle with your day to day banking, and regularly overspend or miss payments, then learn about The Bank Account System.

Improve your investment returns; this could be your pensions, ISAs, or even the rent you charge on a rental property.

Step 3

Sort your financial planning basics; your emergency cash, your wills, your lasting powers of attorney and your insurances.

If you have unsecured debt i.e. credit cards, loans etc, hold £1000 in Premium Bonds until all unsecured debts are repaid.  Then increase this amount to three-12 months of your expenditure.  Doing this is an achievement in itself.

I believe everyone over the age of 18 should have a will and if you have children, its essential, you have a will.

Lasting Power of Attorney’s are often linked to the elderly, but it’s not only the elderly who need these, it’s everyone over the age of 18, they are essential.

Lasting Powers of Attorney allow someone your trust to make decisions on your behalf, to ensure your life and continue, when you can’t help yourself.

Step 4

Organise your unsecured debts and get to work repaying them as quickly as possible, I share my snowball debt repayment plan on my website.

There are dozen’s of creative ways to improve your additional income, to chip away and snowball your debts to zero.

Step 5

Sort your retirement planning, aim to save at least the first hour of your working day for your future, you’ll thank yourself you did.

Join your company workplace pension, even if you were not automatically enrolled you are still allowed to join, your employer may not have to contribute, see my other article on this, but you can still joint, doing this saves you finding an adviser and a company yourself.

Disasters come into all of our lives, it’s how prepared we are, and how we handle them, which will dictate how they affect us long term.


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