Savings Advice

How to get Financially Healthy

Money Saving, Savings Advice No Responses »

Feb 052012

Have you ever wondered why some people always have money while others don’t? If you’re on the side which doesn’t have money, you could be Financially Drunk. What does that mean? Basically, that you can’t keep your finances in check and even though you work, there never seems to be enough.

Getting your finances back to a healthy place can be tough. It’s a little like losing weight: great in theory and hell in practice.

Why is that?

Much as eating habits can cause obesity, spending and saving habits can cause financial anorexia when one is out of balance with the other. How do you start getting financially fit?

Identify the Problem

This can be difficult when you don’t know where to begin. To start understanding your spending habits, you need to log them. Literally, write down each transaction so that you can see how much you are spending on clothes, entertainment, bills, etc. You can do this by carrying a pocket book and writing down the amount and what you bought right after you’ve made your purchase. Alternatively, you can use a smartphone app. Moneybook is excellent.

At the end of each month put all your data into a spreadsheet with the appropriate categories; clothes, food, entertainment, etc. Soon, you will have a clear picture of what is coming in and what is going out. More importantly, you’ll see in which areas you’re having financial problems. Is it that you spend too much money on entertainment, or is that that you’re just not paid enough in the first place?

Spending Too Much

If there’s enough coming in, but too much going out, then you need to examine the reasons why you’re spending all of, or more than, you earn. If something isn’t right in your life, you’re more than likely compensating for it by creating a habit that is causing you to spend unnecessarily.

We’ve all seen it in others: like the girl in the office who has to be wearing the latest designer clothing, but earns less than you do; or the colleague who overeats because they are bored. Both of these people have habits that are costing them money.

If you have a habit that is financially detrimental, it’s worth reaching out to help organisations or professionals, like therapists, that are qualified to help.

Not Earning Enough

If there isn’t enough coming in to start with, it’s likely that you’re underselling yourself professionally. Perhaps you’re just not good at selling yourself and feel bad about discussing money with your boss, or clients. If that’s the case, find yourself a coach, or mentor who is running a successful business, or doing well in their job and ask for some friendly advice over a cup of coffee. Take a course that will teach you how to deal with negotiating pay confidently and successfully.

Getting Out of the Rut

If you have a deficit and your dreams are on hold because of it, it’s good to get out of the rut and to a place where your goals feel possible again.

Get a second Job.

It doesn’t have to be waiting tables, although that can be lucrative in some establishments. Do you have a skill that’s marketable? Can you build websites, fix cars, or mend clothing? Can you solve a problem for someone else and charge them for that service? If so, you can turn that into a second income.

Pay Down Debts.

If you have credit card, or store card debt, it’s a good idea to pay it off as fast as possible because the longer the debt is hanging around, the more it’s costing you. There’s nothing wrong with having credit, but there is something wrong with a credit card statement you’re scared to look at.

Getting Cash Quick.

If your debts aren’t large – under 10k – it’s worth dedicating a period of time to making and throwing money at that debt. Heard of Ebay and Amazon? Dig out all your clutter and sell it off. Volunteer for a clinical trial. Companies like GSK medical trials pay up to £2000 or $2500 for healthy participants and will accept volunteers back for up to four trials a years.

Financial Sobriety is Possible

Taking control of your finances ultimately means taking control of your life. And there’s no better, or healthier feeling than that.

Earn a £5 voucher and clear out your clutter !

Family Money Saving, Money Saving, Money saving for Children, Savings Advice No Responses »

Oct 252011

As any parent will tell you, they always seem to have items that their children have outgrown or no longer need that they would like to see go to a good home. Now parents can turn these items into a £5 M&S voucher.

The website www.mygyko.com which enables you to sell, swap or giveaway to other parents is offering a £5 M&S voucher when you list 5 items on the site by the 31^st October.

Parents who are looking for ways to earn some extra cash will find this an ideal place to sell outgrown uniforms and sport kits that are filling up their cupboards and garages. With the added incentive of earning a £5 voucher for listings made by the end of October, this half term is the perfect time for parents to de-clutter and sort out the items that their children no longer require.

With the site free to use for both the parents listing items and the parents acquiring items now is the perfect time to get listing.

Don’t keep GYKO a secret though help spread the word and you could earn another M&S voucher. Pass on the email addresses of 5 friends and you will receive a £5 M&S voucher.

It’s the new way to buy, swap, sell or give away unwanted children’s ’kit’ – from school blazers to boots, uniforms to unitards and trainers to toys.

GYKO is the free online local community marketplace for listing used, second hand, nearly new and pre-owned:

School wear
Dance wear
Science equipment
Clothes
Books
Sports equipment
Musical instruments
Audio equipment
In fact anything that your kids no longer want, need or can fit into!

So don’t waste money buying expensive new kit – get bargains on GYKO.

The free, friendly, fun alternative to eBay!

Haggle to save money

Savings Advice No Responses »

Oct 062011

Photo Credit - http://www.flickr.com/photos/buddawiggi/

We are only to willing to haggle over prices when in overseas markets, but most of us are reluctant to quibble about the cost of goods and services back home.

Recent research shows that three quarters of us are too shy to haggle for a better price in the UK, and this is costing us an average of £220 a year.

Figures from Standard Life show that most adults have 11 financial commitments to be paid each month. Haggling on everything from insurance premiums to the cost of mobile, broadband and energy bills could, therefore, soon add up to hundreds of pounds in savings.

Some companies are more likely to negotiate on price than others. Research revealed that almost 80 per cent of Sky TV, broadband or home phone customers who tried to barter down costs secured a better deal, while 72 per cent of those who had tried to get a better deal from Virgin Media reported that they were successful.

Similarly, 73 per cent of AA customers who had haggled said they ended up with a cheaper deal on their breakdown cover.

Energy firms weren’t as keen to offer discounts, according to the Moneysavingexpert.com site. It found only 40 per cent of customers who had tried to haggle got a better deal.

B&Q and Comet, for example, offer to beat prices at any shop within a 10-mile radius by 10 per cent. PC World offers the same price-beating policy, but covers a 30-mile radius. John Lewis’s “never knowingly undersold” policy even extends to purchases online, but bear in mind it will only consider retailers that also have a high street presence.

Contextual Links

Index link your savings

Investments, Savings Advice No Responses »

Sep 142011

Photo Credit - http://www.flickr.com/photos/rmgimages/with/4882451468/

With inflation now running at a high level and the stock market in turmoil, there is only one place that offers savers real risk-free returns without paying a penny in tax.

National Savings & Investments’ index-linked savings certificates continue to be hugely popular – and it’s not hard to see why.

Not only have they delivered better returns than any high street bank or building society account; they have also outperformed many riskier investment accounts.

For savers the real selling point is that their money keeps its purchasing power. The same can’t be said of most high street savings accounts, which that are losing money in real terms once tax and inflation have been taken into account.

Savers can invest up to £15,000 in these certificates, and will get a return equivalent to RPI (currently 5pc) plus 0.5pc over the five-year term. Not surprisingly, money has poured into these “linkers” – a total of £6.5bn was invested in just two months after NS & I reissued the savings plans earlier this year.

If you had invested the full £15,000 in NS & I linkers 10 years ago are now sitting on a nest egg worth £23,746 – an annualised return of 4.7pc. This is despite the fact that inflation has been low for much of this period. Over the same period, the average corporate bond fund has produced annual returns of just 3.7pc, while the average equity income fund has returned 3.6pc – both of which could be taxed if held outside an Isa or pension.

Savers should also ensure that they had some money in an instant-access account for emergencies, but savings certificates should then be their next port of call. Investing in equities can be a good long-term bet against inflation, but, as we’ve seen recently, shares can be volatile and you need to be prepared to shoulder this risk.

Although there have been very few new issues of savings certificates in the past two years, NS & I has in the past launched two or three issues a year. Those who have stuck with these savings products can now have sizeable sums protected against inflation.

Protect your savings from inflation

Savings Advice No Responses »

Sep 142011

Inflation running far ahead of the Bank of England target, most savers are finding that their money is worth less by the day. There are steps that savers can take to avoid inflation eroding their savings. Below we look at the most popular options.

GDP projection based on market interest rate expectations and £200 billion asset purchases, August 2011

Photo Credit - http://www.flickr.com/photos/bankofengland/6029057463/

Inflation-linked bonds and accounts

Some banks and building societies have launched inflation-linked products for those concerned about their cash losing value. But, it can be difficult to work out which ones are best for you, and some tie your money up for a long time.

Bonds from National Savings & Investments have the advantage of not requiring you to pay tax on your interest, and offer 0.5pc above the RPI when held for five years. However, you can take your money out earlier and still get a return as long as you hold them for at least a year. You can put in £15,000 per issue.

ISAs

For those who pay tax on their interest it is almost impossible to outrun inflation.

This makes it more important than ever to use your tax-free cash ISA allowance of £5,340 a year. The best rates are available to those who are willing to put their money away for five years, and include Northern Rock’s fixed-rate Isa paying 4.26pc over five years, just below June’s CPI figure. With inflation predicted to fall back from here in the coming months, this product should help your cash to maintain its value.

Mortgage overpayments

Another option to avoid inflation on your savings is to make overpayments on your mortgage. By offsetting your savings against your debt, you effectively end up with an interest-free savings rate at whatever rate you are paying on your mortgage.

For many people this will be better than a top-paying savings account. However, you need to make sure that you do not fall foul of your lender’s rules on overpayments. Some mortgages are fully flexible, allowing you to make overpayments and get them back freely, while others do not allow you to take overpayments back, or will charge you if you make too many.

Top paying savings account

If you want total security for your savings and have exhausted all other options and used your tax-free allowance, the best you can do is to find the best paying home for your money. You will get more interest if you tie up your money for longer, but the tax, if you have to pay it, is likely to take the total return way below inflation.

Lower-risk investments

If you want to take on more risk, a portfolio of dividend-paying shares can help you to outrun inflation. This is only an option for those with a diversified portfolio and who can withstand (both emotionally and financially) the ups and downs of stock markets. The good news is that after a dreadful couple of years, the number of companies increasing or reinstating dividends this year outnumbers those that cut or cancelled payouts in 2009.

But investors might prefer to buy funds than invest in a spread of dividend–paying companies, which tend to be equity-income funds. These funds have had a tougher time than many over the past three years, but are starting to come into their own as dividends make a comeback.

Low interest rates until 2013

Savings Advice No Responses »

Sep 132011

Interest rates are likely to be frozen at their lowest ever level ‘until 2013’, economists have warned.

The historic 0.5 per cent low has now remained for 30 months, the longest period of unchanged rates since the Second World War.

The Bank of England cut the base rate in March 2009 to try to promote ‘liquidity’ during the credit crunch which followed the financial crash of 2008.

Economists have warned savers, with many earning as little as 01 per cent, that it is likely to last for at least another year.

It is good news for homeowners with a variable mortage, who can look forward to a further extended period of low rates. But for savers, the income from their savings, which many pensioners rely on, has all but disappeared.

The global economic slowdown is bad news for Britain because many UK firms rely on strong growth around the world to boost trade and jobs.

Growth is turning out to be much slower than we thought three months ago. But he said that a downturn on the scale of the recession of 2008 and 2009 ‘is not foreseen’

Financial benefits of renting office space

Savings Advice, Small Business No Responses »

Jul 212011

If you’re a small business or start up it can be hard to see the benefits of renting office space, especially from a cost effectiveness perspective. But if you’re shrewd, you can end up with your business in impressive new premises while still pushing forward towards your financial goals.

The latest trend is shared offices – taking part of an office that is managed by another firm on monthly running contract, rather than the old leasing model that sees all the responsibility and admin heaped on your company. Of course, desk rental isn’t for everyone. But have a read through this short office space rental guide to see if either renting, or renting out, desk space might be viable for your business.

1) The office gives you the edge

If you’re not already in an office – perhaps working from home – there is a lot to be said fro renting office space. First, there is professionalism – depending on the business and the type of clients you may have, simply having an office address, being in the town centre or regular access a meeting room can raise your businesses stakes. If you’re a start-up looking to spread your base, nothing says you mean business like moving into a quality commercial unit.

2) Contacts and inspiration

When you rent desk space in a shared office, you get the benefit of being in an environment with other small businesses. You tend to find many small businesses and freelancers who take advantage of serviced or shared office space are from creative professions such as writers, designers and web developers. This can create a great office buzz, where like minded people can share ideas and ask advice, as well as offering up opportunities not only for business deals but also friendships.

3) Spend a little more, get a little more

If you’ve looked at moving into office space, but found you can’t get what you need for the money, try looking at somewhere a little bigger. Sounds crazy, but if you can agree with whoever you’re leasing from to sub-let some of the space you can recoup the extra space, or more, by getting others in to share your offices with you. You may find you can get into a slightly nicer area, or a better looking building, by taking on a little more space.

4) Downsized? Claw that money back

The recession has hit us all, some worse than others. If you’ve found you had to lay off staff and are now rattling round in a half empty office, why not let that space out to other small businesses that are looking for a break and will appreciate cheap serviced offices or shared offices? The new influx of people can give your office a new lease of life, while you’re already heating and lighting that room – you may as well let someone make use of it and pay you for the privilege.

There are of course some possible downsides. If you are looking to rent office space you may not be happy that you’re relinquishing so many decisions – from decoration to choosing a broadband supplier or security firm. But remember, it will be on a short term lease – you can move on easily if things don’t work out.

Security can be an issue, of course. For some businesses it simply won’t be appropriate to have people not connected directly to your company having open access to your building. Some may even find the extra staff a distraction, rather than a positive addition to the work environment. But for many, renting office space provides the perfect answer to their problems.

About the author: Chris Marling writes on behalf of Office Genie, the UK’s first proper online marketplace for desk space and shared office space.

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