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  • Give yourself time to think, with the Debt Respite Scheme
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    How do high interest rates affect businesses?

    By Mr Bankruptcy

    23rd May 2023

    With the Bank of England announcing that interest rates are rising again, to 4.5%, businesses must be cautious of the potential impact on them.

    Historical interest rates and what they meant

    The 0.25% increase in the base rate that was announced by the Bank of England on the 11th May was the 12th consecutive rate rise since December 2021, making the current interest rate the highest it’s been for almost fifteen years.

    Interest rates are being raised to control inflation, which currently stand at 10.1%, but the last time that interest rates were at a similar level, the UK was on the brink of a recession that saw the number of business bankruptcies increase significantly.

    While the UK continues to avoid recession, there are concerns that increasing interest rates will have a negative impact on many businesses. A report in the Business Leader suggested that when rates rose to 4.25%, 22% of businesses “do not have the tools to deal with another interest rate rise”; we have now entered that territory.

    The impact of increasing interest rates

    It’s important to understand how changing interest rates affect our finances so that appropriate adjustments can be made:

    • More expensive loans. Businesses with existing loans will likely find their repayments increasing. For those looking for a loan, it may become harder to borrow and the cost will be higher. Businesses that may have been planning to pay back loans quickly could struggle to do so, and margins will be reduced as costs increase due to more expensive business loan repayments.
    • Consumers spend less. With the cost of credit increasing and the cost of living rising, people will spend less. They will be more particular about where and how they spend their money, focusing on necessities, so business may see their income reduce.
    • Supply chain costs increase. As costs increase across the commercial world, businesses may see them passed on by others through their supply chain, again decreasing their own margins.
    • Slower growth. Businesses no longer have money to invest, which can stall plans for growth. The Financial times reported that investment is lower by 8% compared to where it would be if interest rates had stayed the same.

    How to combat rate increases

    Businesses need to review costs and budgets and be prepared to adjust their plans accordingly to minimise the impact of increasing interest rates. Where they have serious financial concern, seeking expert help quickly can ensure that they have a plan in place to manage the financial challenges ahead.

    James Rosa Associates

    James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to business owners/directors as well as individuals who face unmanageable debt and need advice and support, or who are involved in civil or commercial disputes. Our services include:

    • Insolvency support
    • Negotiated settlements
    • Personal assisted bankruptcy
    • Mediation

    We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

    Find out if you qualify for a free consultation

    If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates, ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

    Teach Your Kids Great Money Habits from an Early Age

    By Brittany Fisher of financiallywell.info

    11th May 2023

    Image via Pexels

    Raising financially literate kids is an important part of parenting. Children need to understand how money works and how to manage it responsibly to be successful adults. Below, James Rosa Associates outlines some best practices for helping your kids learn more about money management with tips they can utilize all their lives.

    Provide Allowance

    Giving your children an allowance is a great way to teach them about managing money and making decisions about how they want to spend it. MoneyHelper points out that an allowance can also help teach your children the value of saving. When giving an allowance, make sure you set clear expectations and rules so that your children know what they are responsible for when it comes to their finances.

    Involve Them in Purchasing

    Shopping with your children can be a great opportunity to involve them in the decision-making process of making a purchase. Ask them questions about the various options and decisions, helping them become aware of budgeting and being mindful of spending decisions. You can also show them there are different ways to make purchases other than selecting the most costly item.

    Learn the Art of “No”

    Saying “no” to your child when they ask for money or a gift can be difficult, but it’s important to teach them the value of money. Provide explanations and alternate options, like opting for ice cream instead of purchasing a toy item. This will help your child understand that money must be earned and spent wisely to get what they want out of life

    Savings Account

    The Motley Fool notes that opening a savings account for children can help them develop good financial habits. Having them deposit part of their allowance into the account each month can teach them how to save for future goals and needs, while also letting them watch their money grow. It is also a great way to identify financial responsibility, as well as help children set short-term and long-term goals.

    Activities With Numbers

    Playing games and activities related to numbers can make math an enjoyable way to learn important skills such as counting change and calculating discounts. Online resources help kids become more confident with numbers, which can benefit them in the future when making spending decisions. There are many activities available that focus on teaching children financial literacy.

    Openly Discuss Money

    Talking about money helps kids to learn essential skills for the future. This includes understanding how to make decisions regarding spending, saving, and investing. There are different ways to earn money such as salary and commission, as well as other methods for saving or investing in stocks and bonds. Understanding these concepts will enable children to become financially literate adults.

    Explain Property Ownership to Kids 

    Teaching kids about the concept of property ownership and its associated costs helps prepare them for when they purchase a house later on. It’s important to ensure that kids understand what they can afford without overextending themselves, and getting preapproved can help with this.

    Additionally, teaching children why it is important to save money and invest in assets establishes financial security. You can also provide examples of how buying a home can be a great asset if done smartly.

    Help Your Young Entrepreneur Get Started  

    Encourage entrepreneurship by helping young entrepreneurs start their own businesses from scratch. Giving them the chance to make mistakes and learn from them, while also understanding the basics of business, accounting, and money management will help them become more well-rounded and capable people. Setting up your kid with the right attitude and necessary skills for success can set them up for a bright future.

    Find Innovative Ways to Raise Money 

    Once you have come up with creative ways for young entrepreneurs to start their own businesses, crowdfunding sites can be a great way to find capital. These websites allow entrepreneurs to post projects and receive donations from strangers, increasing their chances of success. Additionally, they offer valuable lessons in marketing themselves and their businesses in order to gain attention from potential investors.

    Parents must dedicate themselves to teaching their children financial literacy. Teaching these concepts early on helps to build an understanding of finances before adulthood. Parents can involve their kids in shopping decisions, set spending limits, discuss money openly, explain the value of property ownership, and help young entrepreneurs start businesses to give them a lasting financial education.

    James Rosa Associates provide a host of services ranging from negotiated settlements to personal bankruptcy. Connect with us today for more information! +44 0845 680 7217

    Brittany Fisher has been a Certified Public Accountant for over two decades, with expertise in taxes, personal finance, and financial literacy. She founded Financiallywell.info, her own website dedicated to providing valuable insight and advice about managing money. Through her work, Brittany strives to empower individuals with the skills and understanding needed to make sound financial decisions – from budgeting and saving to retirement planning and beyond.

    Five common ways to get your life back after falling into unmanageable debt

    By Mr Bankruptcy

    3rd May 2023

    If you are in debt, there’s a number of ways that may be available to you to help you manage them and to resolve any dispute you are in with creditors.

    What debt management solutions are available to you?

    The following are some of the most common solutions used to manage personal debt.

    1. Debt Management Plan (DMP)

    An informal agreement between you and your creditors on how you will pay back your debts, such as credit cards, store cards or loans. Once agreed, your debts can be consolidated to a single monthly payment. The provider of the DMP will then distribute the money you’ve paid between your creditors.

    2. Individual voluntary arrangement (IVA)

    This is a legally binding agreement between you and your creditors that needs to be arranged by an insolvency practitioner. Once in place, you will no longer be charged interest on your debts and creditors will stop chasing you for payment. An IVA is more suitable for debts over £10,000 and will usually last for around five years, after which you won’t need to pay the remaining debt.

    3. Bankruptcy

    If you owe more than £5000, creditors can issue a bankruptcy petition. You can also make yourself bankrupt, if you owe more than £750, if you can’t pay your debts and what you owe is more than the value of all your possessions. An official receiver will manage your financial affairs, checking whether you’ve made efforts to try and avoid bankruptcy; this may included selling off assets to raise money to pay creditors. Bankruptcy usually last for 12 months and after that period most debts will be written off.

    4. Debt Relief Orders (DRO)

    A DRO can be used if you owe £30,000 or less, have assets worth £2000 or less, don’t own your own home, have £75 or less each month once you’ve paid your household bills, and you haven’t had a DRO in the previous six years. You will need to complete an application to an Official Receiver and you won’t be required to make payments against debts included in the DRO. After a year your debts will be written off.

    5. Full and final settlement

    This may be agreed with creditors when you have a lump sum you can pay towards your debts. You may not be able to clear the whole amount owed, but a lump sum payment towards the debt may be enough for an agreement by creditors to write off the rest of the sum owed.

    Before moving forward with any form of debt resolution, you must understand the implications of each option and how it would apply to your situation. Its effect on others in your life should also be taken into account.

    However, when you face a debt problem that looks insurmountable, it’s good to know that you could have a solution to hand. To learn more about your options, take a look at our comparison of debt solutions or contact us without delay for unbiased, non-judgemental advice.

    James Rosa Associates

    James Rosa associates is a firm of debt advisors and debt adjustors. With a supportive and friendly approach, we offer a full range of advice and professional services to individuals and business owners/directors who face unmanageable debt or who are involved in civil or commercial disputes. Our services include:

    • Insolvency support
    • Negotiated settlements
    • Personal assisted bankruptcy
    • Mediation

    We are authorised and regulated by the Financial Conduct Authority (FRN665061) to work with clients to produce bespoke solutions to fit their specific circumstances.

    Find out if you qualify for a free consultation

    If you want to deal with an unmanageable debt, or bring a dispute to a swift and cost-effective resolution, contact James Rosa Associates today, or ring 0845 6807217 or email enquiries@jamesrosa.co.uk to find out whether you qualify for a free consultation.

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