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THE EARLY BIRD CATCHES THE FINANCIAL WORM!

In the modern world, there is a lot of emphasis on the importance of finance. Of course, this makes sense. Without money, life can be very hard. And, the only way to ensure that you will have money into your later life is by starting with your finances early.

 

When you’re young, though, it can be very hard to focus on this area of life, however important it is. With your career and independent life just starting, you already have loads on your mind. But, in reality, this is, even more, reason to start working on this now. To help you out, this post will be going through some of the reasons you should start early. And, some of the ways you can put your money away.

 

savings and investments

 

SAVINGS AND INVESTMENTS

For most, the aim of saving and investment is to try and make more money out of what you have. Most of the methods you’ll use to do this are based on interest, though. So, you know exactly what you can expect to make, long before you ever make it. Unfortunately, the nature of interest-based saving and investment means that the longer you have it in place, the more you will make.

 

Failing to save when you’re young will limit the amount of interest you can gain. With some services, like life insurance, you’ll find that the price only goes up as you get older, too. And, this will make it harder for you to save. Starting on something like this early will make it easier for you to make more money, along with helping you to learn everything while you’re still young.

 

LIFE INSURANCE

Life insurance is one of the best investments a young person can make. Of course, you will never see this money again. Instead, it will be given to your loved ones when you pass away. But, this doesn’t make it any less important. In most cases, your insurance company will expect you to put forward a certain percentage of the policy, and they’ll cover the rest. So, regardless of your age, you will always have to contribute the same amount. A website like http://www.insurancehero.org.uk/types/500-000-life-insurance.html can help you to understand this better. But, basically, the longer you leave it, the more expensive this sort of service will become.

 

 

PREMIUM BONDS

Of course, you probably won’t want all of your savings and investments to be slipping past you and into someone else’s pocket. And, this is where bonds and ISAs come in. In a lot of cases, these sorts of accounts are tax-free. This means that you will be given 100% of what is made from your money, without the government taking their own slice. Along with this, bonds, like the ones found on https://www.nsandi.com/premium-bonds, are usually covered by your local government. This makes it impossible to lose money on them, at the cost of a lower return. Because the return on this sort of investment is very low, it’s good to start early to make the most of it.

 

Hopefully, this post will inspire you to start getting on top of your finances as early as possible. The skills required to go far in this sort of area will take a long time for you to learn. But, with the right effort, you’ll be able to start nice and early.

 

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3 THINGS THAT MAKE YOU A GREAT LANDLORD

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If you fancy a change of career or want to start a new hustle on the side to make some extra cash, getting into property can be a great route to go down. Despite the housing marketing certainly not being what it was thirty years ago, buying now rather than later can certainly hold you in good stead for the future.

 

House prices are rising all the time, so on paper, even if you bought a house and only made some minor upgrades, it is reasonably likely that you could still sell it for profit some years down the line. But not everyone buys property with the intention of selling it.

 

The concept of buy-to-let properties is a popular one, particularly since many younger people, in particular, are having to rent rather than buy. Landlords can make a decent living from renting out their properties, and provided that you get on with your tenants, it can be quite rewarding too. However, there are a few things you need to know before you jump headfirst into landlord life, so you can do the very best job you can.

landlord

 

Secure a good standard of property



Sadly, the country is not famed for having a good selection of rental properties. The rental market has been blighted by a host of sub-par properties and rogue landlords, who prey on the desperate need for housing that so many people have. This doesn’t mean to say that you can’t buy investment properties such as older houses, or a so-called ’empty shell,’ and rent them out. But, you need to be prepared to make the home livable first. Make sure the property is cleared of any damp, that the electrical and heating systems are all in order, and that you have secured flooring and appliances. Failure to do so could mean that you are breaking the law, and you could end up garnering a bad reputation as a landlord.

 



Keep copies of EVERYTHING



Even if your property involvement is purely a side hustle, it’s still important that you treat it like a business. This means doing everything by the book and keeping copies of every document that relates to the house you are renting out. Gas certificates, rental agreements, deposit information and utility forms all need to be on your records in case you ever come into a dispute with your tenants. It can also be worth having physical copies AND electronic versions of everything so that you know you have the back-up if you need it.

 

Be available


You are the only point of contact your tenants have regarding anything to do with their house (unless you have rented your property via an estate agent). So, with that in mind, you need to be prepared to be in semi-regular contact with them and be willing to be around if an emergency occurs. Share contact details with your tenants and always try and get back to them within 24 hours if they have a query – sooner if there is something seriously wrong. Landlords do sometimes have a bad reputation, but by following some of these rules, you can have a harmonious relationship with your rental properties and your tenants.


 

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BRINGING MORE MONEY IN TO THE FAMILY HOME

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Ask any modern family, and they will tell you that money is one of the most frequently revisiting problems they experience. For many of us, money can prove to be a real nuisance, and this is going to remain the case as long as you are not aware of how to improve it. As it happens, there are countless ways that pretty much any family can hope to bring in more money or to save what they already have. Knowing this, and doing everything you can to make the most of the situation, can mean that you live a much happier and healthier life with your family.

 

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Plan Meals

 

One of the most basic ways to save a surprising amount of money is to plan your meals well in advance. When you do this, you will find that it is much easier to save money on your weekly grocery shopping. And for most families, this does tend to be one of the major expenses, so reducing this is likely to make a considerable difference to your life overall. Planning meals is a lot simpler than you might think. Make sure that you vary your meals accordingly, and that you remember to actually plan for all meals (in other words, don’t forget breakfast and lunch!) Do this right, and your finances will thank you.

 

Live Greener

 

We have all heard plenty about living as green as possible. No matter who you are, you should agree that living a green life will help you to save a considerable amount of money. Not only that, but you will be helping the environment as well, so everybody really does win here. If you want to be a bit more green, there are plenty of things you can do, from the minor to the major. On a larger scale, you might want to visit the Nicholls website and see if ground source heat pumps are suitable for your home. This is a kind of heating which can save you a lot of money, and is more environmentally friendly as well. On a smaller, everyday scale, you could simply endeavor to use less water or to ensure your home is insulated properly. All the little changes you can make will add up to make a huge difference.

 

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Online Earning

 

If you actually feel in need of bringing in more money to your home, then you might be pleased to know that you can do that pretty easily these days. Thanks in large part to the Internet, you can now make extra money online incredibly quickly and easily. No matter what kind of time you might have to spare, no matter how little, you will be able to make some extra money if you know where to look. You have a lot of options here, but just make sure that you go for something that actually interests you above all. You don’t want to spend your time doing something soulless, but you can easily make a lot of money if you are happy, say, carrying out online surveys or installing a google add-on which pays you for clicks.

 

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ARE YOU A FINANCIAL CONTROL FREAK?

Do people call you a control freak? Are you more comfortable when you are in control of everything? Well, I’m here to tell you that rather than being a derogatory comment, you should see it as a compliment. What’s wrong with being in control and being in charge, especially when it come to your finances? I say; nothing! In fact, folks that haven’t got a good handle on their financial situations can learn a lot from you and the following advice.

 

Budgets

Being in control of your budget is surely a good thing right? Whether it’s a personal budget or one for the whole family? It means that you only buy what is needed, don’t go into debt, and have a much more stable financial situation. Allowing you to put money away for other things like buying property or going on holiday.

 

But what is the best way of being in control of your budget? Well, using mobile on the online app can really help. As they can show you what you have spent in a visual way. Which makes it a lot easier to see if you have overspent in any particular area, and manage this better the next month.

 

Savings

 

Being in control of your saving is a great thing. Why? Well, why would you not be in control of your own money that you have worked hard to scrimp and save for? In fact, for some folks just having some savings is an achievement, so they are not just living paycheck to paycheck.

 

However, for the true financial control freak, they will; not only want to see what savings they are making every month. But they will also want a hand in choosing the best account with the most benefits and the highest interest. So they can ensure that their money is working hard for them and their future.
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Pensions

 

Now, a lot of folks don’t worry too much about their pensions because they like their retirement is so far off in the future it seem irrelevant. But you won’t find the financial control freak making this mistake. Oh no! For them having their pension sorted is one of the most important things, because it ensures that they are in control of not just their current situation but also their future as well.

 

Of course, the pension can be complicated things. They can end up scattered if you have worked for a few different employers. Or they can be unusable if you are using a fund where you have no control over how your money is invested. Which many folks in the ‘90s pension scandal learned the hard way.

 

That is why it can be especially useful for the financial control freak to use a SIPP or a Self-Invested Personal Pension. As this allow them to have ultimate control over where their money is invested.

 

Investments

 

Lastly, a true control freak of the financial variety will not only have the budgeting, saving and pension sorted but they will also be making medium to long term investment to increase their overall wealth.

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This Investment may take the form of a business venture, buying property or even investing in the stock market. But of course whatever they choose to put their money into they will definitely want to be as in control of it as possible.

 

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WHAT YOU NEED TO KNOW ABOUT COMPOUND INTEREST

Compound interest

Guest Post by Retired Broker.  Follow him here and read George’s Blog here.

 

Cash savings are dire; there are no two ways about it. Once inflation is taken into account, the buying power of almost all the accounts currently available will be less than when you started. So is there any point in using them? Well, probably!

 

The fact of the matter is that a home for spare cash, no matter how modest, will always be required. So how do you make the best of this not so great situation?

 

There are a couple of ways to approach it which require a little effort and some patience. The first thing to grasp is the magical powers of “Compound Interest”.  Compound Interest is where your savings accrue interest, and then that interest will also accrue interest and over time the rate of growth gets faster.

 

It’s a slow process, but worthwhile, especially if you have long term goals. A little while ago I posted a blog about how much is spent over a year by buying a take away coffee every day for work, here’s the link  http://theretiredbroker.com/coffee-mugs.

 

You might need something stronger when you read it! For the purpose of a compound interest illustration, let’s assume that you are going to give up one coffee a week and put that money away in a regular savings account.

 

That’s £2.55 a week or £11 a month (yes I know it works out at £11.05, but I’ve rounded it down ok?) A quick look at some comparison sites will see that a few regular savings accounts will pay 2% or more, so for the purpose of this exercise we’ll use 2%.

 

The table below shows how much £11 a month will grow at 2% over different numbers of years.

 

 

1 yr £133.22
3 yrs £407.77
5yrs £693.52
10yrs £1459.92
15yrs £2306.84
20yrs £3242.77

 

While fully understanding that interest rates will change and that inflation will erode the actual buying power of the money, the point here is that it is money that you would otherwise not set aside. Even a modest amount such as £11 a month may be really useful in all those years time.

 

If you look at the 20 year period, the actual amount paid in amounts to £2640, so that is an actual growth of £600. Could be ideal if you have a young family and want to set something away for university, car or travel.

 

The other advantage of regular savings is that you can adjust what you save as time goes on or add any spare windfall you may get. This brings me to the second advantage, which does require a tiny bit of effort. A lot of these regular savings accounts offer a rate of interest for a set period only, usually a year.

 

After this the rate will either tumble or collapse. If you don’t stay on top of it, your savings will stagnate. So you need to remember that Cash Rates Are Portable. That’s right remember interest rates are C.R.A.P. So you need to treat them like your annual home or car insurance and review them every year.

 

Once you have come to the end of a good interest rate, shop around’ find another good rate and transfer your savings over to the new account and continue with the monthly saving, you may just be glad you did!

 

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