Financial Guides

My Personal Finance Blog

Making Money in the Recession

April 1st, 2014

While a country is in recession it can be difficult to imagine that it is possible to make more money than you are. You may think that there is just not the opportunity out there. It is true, that it will be tough to do so, but it is possible still. There are a series of things you can try, listed below.

-        Ask for a pay rise – it is possible to ask for a pay rise but you may be worried that this is just not possible. However, as long as you have not asked too recently, it is worth checking. Your manager can only say ‘no’ in the worst instance. You will not be punished for it and there is always the chance that they may say yes.

Recession

-        Work more hours – It is possible that you may be able to get more work at your current job in order to bring in more money. It is worth asking whether this is possible, perhaps to get some overtime or to increase your part-time hours. This may not be available immediately, but showing an interest could help you if the opportunity does arise and so it is always worth making your manager aware that you are happy to do this.

-        Get a second job – working extra hours may be something that some people cannot do. This might be because of child care issues, for example. However, it is worth considering whether you do have the time to fit in some extra time for work. You will need to let your current employer know that you are working two jobs and get in touch with the tax office so that they put you on the right tax code as a second job may be taxed too highly otherwise. Even a few evenings a week or a weekend day, could really help to bring in more money.

-        Work for yourself – this is something that you are wise to do in your spare time if you already have a job, but could be something you could full-time if you do not have a job. There are a lot of opportunities out there for self-employment. You will need to tell your employer and the tax office though. You could deliver catalogues and get commission on sales, you could do freelance work from home or buy and sell things to make money. With the Internet, there are many opportunities to work for yourself and they do not have to cost very much money.

-        Sell things  - you could sell unwanted items to raise some extra cash. You could do this online through an auction website, for example or use classifieds, or a car boot sale. There are many ways that you can sell and you do not have to declare this income to the tax office, if the things that you are selling were yours originally.

-        Voluntary Work – obviously voluntary work does not pay, but sometime sit can lead to paid work. It is also useful because it will give you something to put on your CV so that future employers can not only see that you have been learning new skills, but that you have not just been wasting time while not in paid employment.

Some Myths About Personal Finance

January 5th, 2014

Since everyone is involved in personal finance, it is inevitable that the world is full of myths and mistruths about personal finance. So many people are looking for an easy angle and a way to avoid the responsibility of dealing with their finances. Let’s take a look at some common myths and see how true they really are (hint – not very true at all).

1. I’m not 18 yet, so they can’t make me be responsible for my debts

Wrong. Very wrong, in fact. You can’t sign a legal contract before you are 18, so you can’t sign up for a credit card of your own or get a loan. That doesn’t mean that you can run up your bill if you do have a credit card, though. In order for a teen to get a card they need an adult to co-sign. That adult will be responsible for the debt which is racked up by the teen. For most people it would be worse to hang your parents with a debt than it would be to run one up for yourself.

myths

2. It is safer if I don’t sign my credit card

Also wrong. Someone must have thought that not signing your card would protect you from identity theft because the bad guys who got their hands on your card wouldn’t know what your signature looked like. Unfortunately, whoever came up with that theory wasn’t very bright. They won’t know what your signature looks like, but they can just sign it themselves instead. That way, when they go on a spending spree their signature on the bill will perfectly match the one on the card and they will have a whole bunch of new stuff. You will only be left with the bill for all of it.

3. Easy money can be made helping foreigners with their banking problems

Really, really wrong. You may have seen the offer and it probably sounded pretty good. Someone in another country (often Nigeria) is having trouble getting a whole bunch of money out of the country because their government won’t let them remove it. If you will help them by putting the money into your bank account and then letting them transfer it to another account then they will leave behind a big sum of money as a reward for your troubles. So what’s the problem? Well, they want you to give them all of your banking information so that they can put the money in your account and take it out afterwards. The thing is, they just use the information you give them to empty out your account of all of your money and then they disappear so you can’t track them down.

Should You Save Your Money Or Pay Off Your Debt?

December 10th, 2013

If you’re lucky enough to have money left over at the end of the month or if you get a bonus through from work, what should you do with the extra money?  Of course, many people will be tempted to spend it on nice things like clothes or gadgets, but realistically the two best options for that money would be to either use it to pay off some of your debt or put it away as savings.

What would be the best option?

Saving Money

One of the biggest arguments for saving your money is that you are covered should a financial emergency pop up. Also, by doing this, you could try to prevent getting into debt in the future. However, the difficulty with doing this and not paying off your debt, is that the interest on things like credit cards will increase, leaving you paying off more money that you might have done before.

Paying Off Your Debt

Paying off your debts is important as the longer you leave it, the more interest you will pay, so it’s a good idea to get rid of the debts as quickly as possible.

However, if you decide to use the money to pay off your debt, you could leave yourself at risk if a financial emergency appears. If an unexpected expense does pop up, then you might find yourself relying on credit cards to cover the costs, which could make the debt worse.

Pay Off Your Debt

Why Not Try Both?

I think realistically, it’s important to do both. It’s a good idea to be able to find a good balance between paying off your debts, but trying to set some aside in case of emergencies. So, maybe if for example, you were lucky enough to be given a £500 bonus at work, then it might be worth putting £250 into a savings account

Obviously, this does depend on your circumstances, as most people aren’t lucky enough to have money left over at the end of the month. If your debts are more urgent, like a utility bill and you don’t have any spare case and don’t want to use credit cards, what are your options?

If you have no emergency fund and an unexpected finance does come up, then you might consider a short term loan like a payday loan. It’s possible to apply for anything from as little as £50 to as much as £1250, which you borrow until your next payday.

Are You Ignoring the Power of an ISA – Here’s Why You Should Get in the Action Now

November 22nd, 2013

An ISA account isn’t very glamorous, but it is reliable. In an era where people are trying out a lot of different alternatives to make a little more profit on their money, there is a growing movement that is desperate to get people to go back to the basics.

What is an ISA account? If you’re just looking into this, here’s the quick rundown that you need. Basically, this is a savings account that has tax benefits if you use it. It allows you to save money in a way that is advantageous to you tax wise. The money that you make on the ISA isn’t taxed, and the money that you put in is spared from taxes. Given that the government is basically giving you encouragement to save, you might as well do what you can right?

You can open an ISA account from age 16 and over, which gives you plenty of time to let your money grow. The Government is really serious about people doing more with the ISA, because it’s such a great way to build the future while still saving money on their taxes. Nationwide UK did some research and discovered that the Government receives an extra 500 million pounds in terms of tax revenue just because people don’t put enough into their ISA accounts. That’s definitely something that needs to change, and it has to change in a big way. It’s only going to start moving in a positive direction once people start seeing it as something that they need to do.

Power of an ISA

There is a limit that you need to respect, and it includes both parts of the allowance for the ISA. There’s a cash ISA side, and a stocks and shares ISA side. Both sides come up to 11,620 GBP for the current tax year. You should always check year to year, because the allowance changes and you want to make sure that you maximize the tax benefits.

If you want to maximize your ISA, some experts say that you should focus more on the stocks and shares (S&S) side than the cash ISA side. However, you should keep in mind that you can lose your money on the stocks and shares side. You’re not guaranteed to get an increase on your money. However, you can also get a lot more than you might expect, versus the cash ISA side. Either way, you don’t have to report your ISA savings to the Government for tax purposes, as long as you follow the rules.

Let Yourself Find Financial Peace!

November 6th, 2013

One of the resolutions we had this year was to write more about the mental side of personal finance, something that doesn’t get talked about as much. It’s true — unless you have your mind in the right place, you can get all of the advice in the world can still be in the same place financially. It’s sad, but its’ really true. You just need to make sure that you’re thinking about the bigger picture as much as possible. You can’t just sit there and think that there’s no way that you are ever going to be able to afford to fix your finances. That’s negative thinking, and in this arena…negative thinking can actually cost you big time. You start thinking that there’s no hope for you, and then you literally start living like there’s no hope for you ever. You can’t find yourself making that type of mistake. It just doesn’t allow you to get the type of happiness that you set out to receive in life.

Nobody wakes up as a child and thinks that they’re going to grow into a world filled with struggle. But the world isn’t fair, and that’s what happens sometimes. Sometimes we don’t get to go off to University, and we have to take a job to take care of our family. Or maybe our parents die before we even become an adult, and we have to live with grandparents that we don’t like, or aunts and uncles that have never visited us. They want to do the right thing, but they were busy living the high life found when you don’t have children. They never realized that they would have to take in their sister or brother’s children. Resentment often sets in, making life very hard.

Financial Peace

But what about when love turns sour? You start thinking about this big, brave world where you and your spouse are going to take over everything. There will be love and happiness, right? The reality is that you’re going to find that you will have to think carefully about what you will accept and what you will refuse. If you’re someone that isn’t going to take something laying down, then you have a lot of trouble waiting for you. Marriage is about compromise. When the wedding cake has been eaten and all of the fanfare has gone away, you’ll find that you’re going to be in for a big shock over time. There’s nothing like making sure that you have things laid out in a certain way.

Of course, this brings us to the financial blueprint, but not yet. You have to stop and realize that you’re worth it. It can be hard to hear that. When I was growing up, I didn’t get told that I was really worth it. Believe it or not, that soaked its way into our finances. I started thinking that there wasn’t any point for me to really do anything in life, because nobody would take me seriously. I wasn’t worth it. So instead of fighting for promotions at work — I just let other people step in. By the time I realized that I was a pretty good person, there weren’t any posts available for me to take on! That was a pretty miserable experience, and one that I never, ever want to repeat if I can help it.

Loans For Bad Credit: There’s Hope For Everyone

October 25th, 2013

Do you have a poor credit rating? Is your credit rating affecting your ability to get a loan?

Countless numbers of people are now unable to borrow from banks because their credit score says they can’t be trusted to make repayments and this has created a major problem for many borrowers in the UK.

For a huge period of time, the concept of borrowing money was based on your reputation; bank managers were a part of the community and personal relationships mattered. Common sense appears to have deserted the financial community, or has it?

a-bag-of-money

Turning To an Overdraft?

One of the first places people used to turn when they struggled to keep their financial head above water was their overdraft but banks will only tolerate people being stuck in an overdraft for so long.

Most banks will run reports that monitor bank accounts and will look for signs that people are struggling.

For more information regarding overdrafts please the dedicated Wikipedia page by clicking here.

Overdrafts Withdrawn

If a bank thinks you’re relying on your overdraft too much they have the ability and have been known to take the whole overdraft facility from the account.

They’ll usually time the removal of an overdraft with your payday, so the money coming in repays the overdraft but leaves you with very little to cover any additional costs.

This has led to the quest for alternative methods of obtaining new credit.

A Second Chance

It hardly seems fair for people to be penalised for a mistake for ever. Yet for anyone who has finds themselves answering yes to any of these questions below, it became crucial that something new became available offering an achievable alternative:

  • Do you have a poor credit record/history?
  • Do you have no credit history at all?
  • Have you moved address regularly?
  • Have you fallen into arrears on loans or mortgage?
  • Do you have any CCJs (County Court Judgements)?
  • Have you defaulted on previous credit cards, accounts or loans?
  • Even, are you self-employed?

Bad credit loans are designed to give people that alternative.

Banknotes

Don’t Fit The Mould?

Many people no longer fit the perfect mould that is expected by nearly all High Street lenders in order to be eligible for a standard personal loan but this is no longer the problem that it once was.

All bad credit loans obviously have their own advantages and disadvantages but they all offer options where there recently were none.

Turning To a Guarantor Loan

One of the most popular alternatives is a guarantor loan which work by offering loans specifically created for anyone with a poor credit rating.

This may sound a little unusual because lenders don’t usually seek our borrowers with poor credit ratings but the risk to the lender is balanced by using family members or friends with better ratings to act as guarantors who will pay the debt off if customer defaults.

For an explanation regarding guarantor loans and their benefits please view the video below.

What are the Pros?

The process surrounding many bad credit loans is designed to offer a swift resolution. Decisions are often made within minutes, with the balance appearing in your account shortly after the application is granted.

Depending on the lender, amounts ranging from £500 all the way to £10000 are generally available at a significantly reduced rate when compared to payday loans.

Having a guarantor makes it more likely you will be accepted for a loan where High Street lenders would reject you. Some allow you to repay early without charging you early repayment fees.

Any Cons?

Interest rates are still comparatively high when compared to standard unsecured person loans but because the majority of these are unattainable to borrowers with a bad credit rating, they are still an attractive and realistic proposition.

The main area of worry for people applying is that having a guarantor means that they can be chased for the money in the event you don’t pay your debts. This can of course be avoided by making the repayments as and when they are required.

Payday Loans

Demand for payday loans soared during the recession with consumers becoming increasingly strapped for cash. But people facing cash-flow problems must look into this type of loan for bad credit before deciding this is the right option.

Payday loans have been specifically designed to bridge the gap until payday if you find yourself short and are as such are generally short-term loans typically of up to £400 provided generally for a maximum of 30 days.

Neon-Loan-Sign

Don’t Be Reliant on Payday Loans

The high cost means such loans should only be a one-off and you should be confident you can pay it back on time. They should not be something on which you’re reliant on a monthly basis, and definitely not to service other debts.

Warning: You shouldn’t take out payday loans if you know you can’t pay them back within a month, nor use them to service other debts as this can lead to significant problems.

Borrowing For Need

Due to the interest rates associated with some bad credit loans, and in particular payday loans, they should only ever be used for emergencies rather than luxuries.

Credit Scoring Problems

It is very difficult for a consumer to know in advance whether they have a high enough credit score to be accepted for credit with a particular lender. This is due to the complexity and structure of credit scoring, which differs from one lender to another.

Lenders do not have to reveal their credit score, nor reveal the minimum credit score required for the applicant to be accepted. It is impossible for the consumer to know in advance if they will pass a lender’s credit scoring requirements.

Improving Your Credit Score

Along side actually getting hold of some extra money, the most important aspect for many people is receiving the opportunity to do something about it.

Many borrowers find themselves stuck between the proverbial rock and hard place when faced with a poor credit rating because the best way to turn things around is to demonstrate an ability to repay debt on time. Until fairly recently, this has often proven to be very difficult though due to the unwillingness of lenders to take on the risk of a borrower with a poor credit rating.

How To Do It?

If you are in a position where your credit report can’t be given the quick-fix treatment such as deleting an entry that doesn’t belong there, bad credit loans can help to turn things around.

If you continue to make the scheduled repayments, not only will successful applications for bad credit loans prove to be immediately beneficial, they will also help in the future when you make any applications you need to make for credit in the future, be they a mortgage, credit card, or loan.

Any Alternatives?

Otherwise there are various other ways to improve your rating over time but the best thing to do is to show you can handle the credit you do already have by using it carefully and making the required payments on time.

Don’t Give Up

Even when things may seem bleak, it is important to remember that there are a number of loans for bad credit out there ensuring there is hope for everyone.

If you would like a little more information regarding the ability to bring debts under control and turn your credit rating around, the UK government offers a range of hints and tips which can be accessed here.

Author Bio

Emma Farmer has been a freelance finance writer since 2005. She now works as blog writer for Guarantor Loans UK which places a strong focus on all types of bad credit loan. For more information please click here. An extreme sport fanatic who completed the London marathon for the first time in 2013, she lives in London, England with her husband and 2 children.

Rewards Credit Cards Are Making a Big Splash This Holiday Season

October 22nd, 2013

The holidays are often seen as a time for family, but that doesn’t mean that the UK financial industry is going to stop marketing. If anything, it feels like the marketing increases because they know that you’re going to have time off work. They want to have your business and there’s absolutely nothing wrong with that. They provide a service that many people want. You need to build your credit history, but you have to make sure that you’re doing in a smart, systematic, orderly and healthy way as it relates to your overall financial blueprint. If you’ve been looking for some opportunities to build new credit, you might want to take a look at actually getting some of the rewards credit cards that come out.

The idea behind these cards is pretty simple — they want to reward you for actually using the card. It’s going to be hard to not use a rewards card, especially when you know that you can earn points and miles by doing so.

Should you go with a card that awards points, miles, or a mix of the two? This is a classic question that comes up when these cards are mentioned. It’s up to you to figure out which one you would rather have. Most of us here around the money blog prefer to go with miles, because we all travel. It’s very nice getting cheap international tickets, especially when we want to go on summer holiday. However, if you’re not a super traveler, you might as well get points that you can use at other places, or get gift certificates for all of your favorite restaurants.

Rewards Credit Cards

The best part of it is that you don’t have to search far and wide for these credit cards. They’re going to be clearly advertised, because they are truly that popular. There’s no need to worry that you’re going to be automatically shut down when you apply. Some rejection happens, but overall even people who have had some credit problems in the past can still be approved. It really depends on what type of credit score you have. If you haven’t pulled your credit file in a while, you might want to do so.

If you’re rejected by a rewards credit card, you can pull your credit file for free. This is a good way to make sure that all of the information that they looked at is correct. If the information isn’t correct, then you’re going to have a world of problems waiting for you, which isn’t what you want. Correcting incorrect information is possible, but negative information that is correct will unfortunately have to stay.

We think that rewards credit cards can be a good first, but you will want to read the fine print carefully. A high interest rate just to earn points and miles should be avoided at all costs. You also want to make sure that you’re going with the one that’s going to offer you the best incoming deal. The new customer is valued in the credit card industry, so make sure that you’re getting as many perks as possible from the very beginning. You want to feel valued, because you’re going to be making them money. You might as well get as much out of it as possible.

The time is right to check these things out. Even though you might be gearing up for a very busy holiday season, you have to make time for some things in life!

Don’t Leave Yourself an Opening for Disaster With Your Investing

September 29th, 2013

Are you tired of worrying about whether or not you’re really going to be able to take care of all of your needs with investing? The truth is that investing is a great way to grow your money, but it’s certainly not without risk. We like to get that out of the way quickly so that people know exactly where they stand. It’s not just enough to think that you’re going to be okay with the overall risks that come into play. You need to know what those risks are, that you could lose all of your capital and then some. It’s all about making sure that you play your odds in such a way that you do not lose the power to keep growing your money. You want to have a mixed portfolio that has multiple outlets towards wealth. The trouble that investors get into is that they think that they’re going to get rich in one field, when it’s really a mix of different things. You can have stocks, bonds, REITs, unit trusts… the whole nine years. You can even invest in pure real estate, if that’s what you want to do.

Your overall risk tolerance will alter your investment strategy. Don’t forget that you might as well get your ISA fully funded while you’re thinking about growing your money. It’s tax-free money that you can claim every single year. While it won’t serve as primary income, it is a cushion that you can use for just about any reason you can think of. It’s your money, so you might as well use it for things that matter to you.

bad investment

Going back to your financial blueprint and really thinking about investing can help you avoid disaster. When things start spiraling out of control, you will be able to figure out exactly what you want to do and how you want to get it done. Feeling confused? Go back to the blueprint.

Don’t forget that there are more investing groups now than ever before. There’s nothing wrong with thinking about all of your options and not getting discouraged. There are plenty of people that are absolutely hungry to get things done, and they don’t mind taking you under their wing. You do need to be prepared to do a lot of studying. Investing is all about paying attention to what the market is telling you. If you’re not well versed in the world of say, stock charting, then you need to make sure that you get your stock charting education. People will help you as long as you show that you have a willingness to actually learn something. That’s the way it goes, and you’ll have to deal with it.

Good luck with your journey through investing. It’s not going to be an easy battle. Sometimes you might have to pull back when you really wanted to drive forward. It just depends on what you’re really trying to accomplish. Be good to yourself and remember — if a deal feels wrong, don’t get into it. Back out of it. There will always be opportunities to make money, don’t worry about it!