Understanding the “Debt Cycle”



The “Debt Cycle”

Ever been here I have. There was a time when I was in debt where I owed quite a bit of money to people and the bank. It was so bad that even my Credit Cards were maxed out. There were times when I would see someone I owed money to and I would cross to the other side of the street just so I would not have to stop and talk to them. I was financially, physically, emotionally and spiritually not in a good place.

I am going to share with you, what I believe is, valuable knowledge regarding the “Debt Cycle”. It was given to me during my darkest hour and was to be a major turning point in the way I looked at debt. Read More »

Understanding the Debt Cycle and Business Debt


The Debt Cycle

If you are in business it is important that you understand the Debt Cycle and how it relates to your customers / clients (your Debtors), you and the people you owe money to (your Creditors). I would go as far as to say that not understanding the “Debt Cycle” is the primary reason I am seeing an increase in the length of time it is taking for businesses to pay their creditors.

Business Debt

As a business we extend debt to our customers and our terms are that “Payment is due in 7 days of receipt of the invoice”. As the business owner, unless the client has a query regarding the invoice, I expect our clients to honour that and on the main this happens.

However having said that if I don’t follow up on an overdue account then the seven (7) days does not mean a thing and can actually lead to the client paying their account later and later. So on the odd occasion that this happens I need to “nip it in the bud” so to speak.

Conversely, I expect our clients, not to ignore their debt to us and to come to me if they are unable to for one reason or another to pay by due date. Believe you me there is a lot of expense involved in chasing bad debts. Read More »

How does KiwiSaver work for self-employed

Self-employed and KiwiSaverindex

You don’t have to be an employee to be part of KiwiSaver, but the rules are a bit different.

If you will not receive PAYE income as a contractor – for example, if you are going to invoice for your contract work – your employment status will change to self-employed and you will not be required to make any contributions to your KiwiSaver account.

KiwiSaver is very flexible if you’re self-employed. You’re not required to contribute a set percentage of your pay. Instead you can agree your contribution level with your KiwiSaver provider. Some providers may have minimum contribution requirements. You can either: Read More »