Author: Courtney Reynolds

How to Know Whether Borrowing is the Right Decision for you

There are often times when we want more money than we have and therefore we contemplate whether we should be taking out a loan. This can be a tricky decision though. Sometimes a loan can be well worth it but sometimes it is not. Deciding whether we are in a position where the loan is worthwhile is not always easy, but there are things that you should consider which might make the decisions easier.

Can you afford the repayments?

One of the main things that you should be considering is the repayments. Many loans will have a repayment schedule and that means that you will be expected to repay a certain amount of money each month. This also goes for payday loans.This means that you will know exactly when the loan will be repaid. However, it does mean that you will need to make sure that you will be able to come up with that amount of money each month. It is not always easy to be able to do this. Therefore, you need to check and make sure that you are confident if you can. If you miss a repayment there will be charges and it means that the loan will cost you more money, if you miss a lot then you may have to go to court or have things repossessed. You do not want this to happen. Therefore, take a look at your current finances and make sure that you are happy with whether you will be able to cope with these repayments. It is also worth thinking about whether you will be able to cope if the repayments go up. If the interest is a variable rate then there is always a risk that the lender will increase the repayment amount and you will need to find extra money, so you will need to think about where this will come from.

You should always learn the costs of borrowing.

Are you happy with the cost?

It is a good idea to also find out how much the loan costs. All loans cost money, but the costs vary. It is a good idea to work out the cost of the loan and think about whether you are happy with that cost. Think about the item that you are buying with the loan and whether you are happy to pay that extra money for it on top of the purchase price. Obviously, lenders will differ in their costs and so you might be able to find a cheaper one and then you might be happier with the cost. Of course, even if you are happy with the cost, you should not pay more than necessary so do check if there is a cheaper one.

Is what you are buying worth it?

It is a good idea to make sure that you are happy with the item you are buying with the loan. Think about whether you really feel that it is worth it. As well as thinking about the cost of it and whether you think that it is worth it. Consider how it will benefit you and whether it is worth getting a loan for it. Also think about whether you could save up for the item instead as although you will have to wait for it, it will be cheaper that way. If you are buying a house, for example, you will probably have no choice but to borrow money to pay for it. However, if you are buying a new sofa, you might be able to manage with the one you have and save up until you have the money to pay for it. So consider the consequences of borrowing the money or waiting and saving up and you will be able to decide whether it is the best thing for you to do.

Easy Tips on How to Spend Less Money

Many of us would like to spend less money so that we have more to spend on fun things, save up or pay off our loans. There are lots of things that we would probably like to do with our money but it can feel like we are always having to spend our money on boring things like bills, tax and rent and therefore we do not have so much left for all of the fun things that we would like to have. There are things that we might be able to do that will enable us to spend less on this sort of thing though.

Switch providers

There are lots of different companies that we can buy things from and they charge different amounts of money. We will all know that, but when it comes to things like loans, utilities, contracts etc we may not think about switching providers. This means that you will be missing out on the opportunity to pay less money for things. It is these more significant amounts that we pay out which can make more of a difference if we reduce them. So if we end up paying less for insurance, electric, gas, loans etc we could reduce our outgoings quite significantly and it does not take that much time to search and switch.

Compare prices when shopping

When we are out shopping it can be easy to shop at the places we always go to and buy the items we always get without thinking about the prices of them. If we take a bit of time to compare prices across different shops and look at different items in those shops we can potentially save money. It will take a bit of time and we will have to break some habits in order to do this. However, it could be worthwhile as it will mean that we will be able to save money on more of the things that we buy. It is important to think about value for money as well. If we pay less for some items we will get less or it will not last as long. This is something worth bearing in mind, so look at the quality of the item as well to make sure that you are getting something that is worth the money that you have paid for it.

Cut down on usage

It can be a good idea to see whether we can use things less in order to save money. This can include things like gas and electricity where we can hopefully think of ways where we will not be able to spend so much money. Unplugging things we are not using, turning off lights, turning down heating and things like this can all add up to make quite a saving. If we are metered for water, then cutting down what we use can make a difference as well. This is something that we might find tricky, but there are often tips on our providers websites on things that we might like to try.

These things might seem difficult to change, but once you get into good habits it becomes easy. It is also easier to pay less for what you are buying and just save money this way than cut down on the amount of things that you are buying. If you start to buy less it can feel like you are depriving yourself buy buying the same amount but paying less can actually feel great as you are getting the same amount of things but saving money too. You will not feel like you are missing out.

How to Pick the Best Savings Account

There are many different savings accounts available and it can be difficult to know which one to choose. It is therefore worth thinking about what is important to you in a savings account and then you can decide between them more easily.

Interest

The interest on your account is something that is pretty important to most people. They would like to get the highest interest possible. Unfortunately, most savings accounts have a very low rate of interest compared with the amount of interest that you pay on a loan, for example or compared even to inflation. Therefore, it is worth looking around to see what rates there are and how they compare. There will be some differences between them and these differences will also change, which means that you may need to swap the place you save from time to time so that you can move to one with better rates.

Amount you can pay in

Some accounts will have a limit on how much you can pay in. This tends to be things like bonds, ISA’s and other specific savings accounts. It is a good idea to find out whether there are any limits as you may have a significant amount to pay in, perhaps a certain amount a month or a lump sum and you want to make sure you will be able to pay it in. Some accounts will pay different levels of interest depending on how much money you have paid into them so watch out for this as well.

Accessibility

It is important to think about whether you want to be able to have instant access to your money. If you want to be able to draw it out with no notice, then you will need to make sure that you pick an account that allows this. You will find that there are some accounts where you need to give notice to get the money. This could be weeks or months and you might feel that this is okay but you need to think about what you would do if you did need the money right away. There are also some accounts where you cannot withdraw the money until a certain date. This tends to be the case with bonds where you will have the money in them for a year or several years and then you will be able to have it back when they mature. You might want to have some money that you can get to right away and some that you can leave in for longer. The advantage with using accounts which are not instant access is that they tend to pay a higher rate of interest.

Local Branch

Some people like to save with a bank or building society that has a local branch. They like to be able to go to their local high street and pay in or take out money there. This is something that is getting harder to find though as more people are happy with online banking and high street branches close down. It is likely that if you want this, you will need to go for an account that pays less interest so you will need to decide whether you think that it is worth it.

Reputation

It is good to also think about the reputation of the company that you are saving with. We often like to go with a bank or building society that we have heard of. Although this is not necessary it can give us peace of mind. However, we may find that we can get a better rate form one that we have not heard of. Therefore, it can be worth investigating others. As long as they are covered by the FCA rules that means that you will get your money back should anything happen to them, then you are safe in using them.

How to Budget to Help to Make Ends Meet

If you struggle to make ends meet a lot of the time, you may want some help. It can be stressful if you have to worry about money every month and wonder whether you will have enough to keep you going. However, if you set a budget it might help you to manage better.

What is a budget

A budget is where we allocate money for different spending purposes. The idea is that if we know how much we can spend on different things, then we will not overspend and be in the situation where we do not have enough money available. Obviously, we need to be flexible as sometimes we have more expensive months than others but setting a budget is a good start. It also helps us become more aware of what money we spend on what so we can see where most of our money is going.

Start with essentials

It is a good idea to start with looking at your essentials which means thing that you need. This would be things like your rent or mortgage, loan repayments, utilities, food etc. Anything that you need to either survive or have a basic lifestyle. These are the items that you need to prioritise and therefore you need to start by identifying what these things are and how much you pay for them. Once you have done this, then you can look at all of the other things that you buy and think about whether these are necessary or not. Consider whether you really need them and how much money you have left to spend on them. It might be that you will need to cut down.

See if you can spend less

It can be a good idea to also see whether you can spend less money on the things that you buy. For example, you need to think about whether you could switch retailer, providers or suppliers and pay less. We can often do this with utilities, contracts, insurers and even lenders so we do not pay as much. Investigate every item you buy and think about whether you might be able to save a significant amount of money if you bought it elsewhere.

See what is left

Once you have done this you will be able to properly see how much money is left to spend on luxury items. It can really help if you set up a direct debit to pay your bills off when you first get paid. Then, when you check your bank balance, you will know that everything that you have left will be there to spend on luxury items. There will be some exceptions, things like groceries tend to be bought more often than monthly so you will need to make sure you have enough for this as well as transport, perhaps petrol for the car or public transport costs.

However, once you are sure that all of the necessities are paid for, you will be in a position to be able to decide what else you want to buy. Hopefully there will be some money left over to get some luxuries. Of course, you may find that you will not have enough to buy all of the things that you want and therefore you may need to save up or go without some items. However, by doing this, you will be more in control of your money and be able to make sure that you can make ends meet each month. You will be in the position where you are able to make decisions about what to spend and what not to so that you make sure that you always have enough money for the things that you need.

Tips to Help if you go Self Employed

If you are thinking about going self-employed there is a lot that you should think about. It can be easy to think that it will be really great to be your own boss and you can work the hours you choose and fit it around your home life with great pay and lots of freedom. The reality is not like this and it is worth making sure that you are aware of what it could be like before you start.

Law

It is necessary to be aware of any laws that will apply to you in your field of work. Anyone that is self-employed will be required to declare their income for tax purposes and therefore fill in a self-assessment tax return. This needs to be done yearly and you will need to pay the tax that is required. This is something which you will be responsible for saving up for because you will not pay as you earn, like you do if you are employed but you will have to pay it once or twice a year. This means that you should make sure that you are aware of how much you are earning and put aside money that you need to pay in tax so that you have it there when you need to pay it.

You will also need to be aware of any specific laws in the area you are working and make sure that you have any insurance in place that is necessary.

Pay

You may find that you will not have regular pay like you would in employment. When you are self-employed you need to find the sources of income and sometimes this can be difficult. You may not be able to find enough work to give yourself the level of pay that you are used to. You also may find that the work is hard and therefore you get paid a low hourly rate. It is worth bearing in mind that there is no minimum wage when you are self-employed and depending on what you do, you may need to charge below minimum wage to compete for work.

It is also worth noting that you cannot get universal credit if you are self-employed. This means that if you have a low income and you hope to get some benefits to help you out you will not be able to get it. The government expects people to look for a job if they are not being paid enough so unless you are unemployed you cannot claim and in this case you would have to prove that you are looking for employment.

Hours worked

When you are self-employed there is often a lot to do as well as the actual job. You will need to keep your accounts, look for customers, send out invoices, order stock and things like this which you will not be being paid for. Obviously, it can be good if you can incorporate the cost of your time doing this into what you charge for your jobs, but this will depend on what the going rate is and whether you can stay competitively priced and do this. You may also find that you will need to work a lot of hours, particularly at the start, to get yourself established.

Stability

There is also no job stability when you are self-employed. You have no idea whether you will have work in the future and this could be stressful for some people. Of course, employment could end through redundancy but it is less likely than not being able to find work when you are self-employed.