Buying home insurance is a great idea for many reasons, not least of all the fact that you will be covered in the event of any theft or accidents. Shopping around and finding the best policy for you is always going to be one of the best ways to ensure that you get a good price and a good value policy, but there are things that you can do in and around your home which will also help to bring your insurance premiums down, especially if you live in area which is identified as a higher risk. Here are five things that you can do to keep your premiums down:Continue reading “Ways to Reduce Your Home Insurance Premium”
In this day and age, debts are inevitable for most people. Taking out a loan can be of tremendous help, especially when you are in a financial emergency, be it for business or personal reasons. However, there are many mistakes that people make, leading to a stressful life of debt. To help you avoid becoming a victim, here are some common debt mistakes to keep in mind:
Same Old Spending Habits
We are creatures of habit and spending money is no exception to that rule. That’s because driving the same car, eating in the same restaurants, and buying at the same store proves to be comfortable. However, it could be costing you more than you can handle financial wise. It’s pretty simple- if you do not change your spending habits, then you will never get out of debt. Consider beginning with your morning habits and take breakfast at home. Next, carry lunch from home, rather than eating at a restaurant. In the evening, watch movies or games at your house while enjoying a homemade meal. These simple changes will have an immediate significant effect on how much you spend on a daily basis. You do not have to do what you like or prefer, you just have to make better choices when it comes to it.
Attempting to Get Out of Debt Alone
Almost everyone doesn’t like to ask their friends and relatives for support when it comes to handling debt. A wise remedy is to contact a non-profit credit counseling agency and seek help from the experts. These counselors are well-trained and certified by national organizations such as the National Foundation for Credit Counseling and will recommend debt-relief solutions including credit consolidation, debt management programs, debt settlement, and even bankruptcy if things are really bad. They will show you how to create an ideal budget and suggest a solution that will match your needs. The best thing about this is that the advice is free. Ask, am I eligible for a debt management plan?
Failure to Create a Practical Budget
It is virtually impossible to gain control of your money if you do not have a practical budget. Many individuals think it is too much work until they reach into $10K or $20K credit card debt and wonder how they got there.
A great solution is to create a realistic budget that addresses common financial needs such as health care, food, housing, education, and insurance, while also creating room for paying your loans. Do away with the credit cards and only work with cash. Yes, this will mean cutting back on things like dining out, hitting the movies, buying new electronics or clothes, but if you really want to get out of debt, having a practical budget and using cash is a solid start.
Getting into a Debt-Relief Program but Not Understanding What it Entails
There is rarely a quick-fix solution for debt issues. If you come across this claim, then immediately look elsewhere. One of the most important things to bear in mind is that debt-relief programs tend to take three to five years and so, you’ll need to be patient. Next, you need to assess the firm providing these solutions. A great place to start the check is the Better Business Bureau (BBB) or the local state attorney’s office. Military bases, universities, and credit unions should also be reliable sources for suggestions. Just ensure the organization you pick is licensed and does not have a record of client complaints.
Trying to Clear Multiple Debts at Once
Many people in debt usually have multiple sources including student loans, credit cards, car loans, mortgages, etc. Unfortunately, they try to handle them all at once. This is a move that will only see you give up and be unable to make progress in clearing debt. Instead, go back to your budget, trim everything to the essentials and create a surplus that goes to the credit card with the highest interest rate. Once that is cleared, go to the next credit card, and so on, until you clear all the debt.
Failure to Put Aside Savings for Emergencies
According to reports, over 55% of American consumers do not have adequate finances to cover emergency expenses of at least $500. You cannot predict car accidents, plumbing failure, unemployment, etc. That’s why every household requires an emergency fund account. Experts suggest putting three to six months of expenses aside to cover any emergency you might experience. It may take time to get there, but if you are determined to pay off your debt, it needs to be part of your monthly budget. So, consider putting aside at least 5% of your monthly income towards an emergency fund. This way, you won’t have to depend on loans to cover an unexpected expense.
Failure to Contribute to a Retirement Account
Yes, it seems good to devote your money to clear your loans today, but it is a costly mistake in the long haul. There will come a time where you need to retire and so, ensure you devote at least 5% of your monthly income towards a retirement savings account. The earlier you begin contributing to that 401(K), the better off you will be when you retire.
Failure to Prioritize Your Debt
We all have bills and many people want to get out of debt. However, many people fail to be focused, and doing so isn’t a priority. One of the best solutions is to consolidate your debts and only make a single payment per month. Another way to stay focused is by writing down the top 5 debts you want to clear. Put this note in a place you will see every day to remind you of your mission. Whenever you see that note, you will remember that you are getting rid of and not adding to the debt.
Closing Accounts When They’re Paid Off
The remedy for this is straightforward, pay off your account but do not close it. Keep in mind that credit score systems not only depend on how much you owe but how much credit you have available.
Everyone should know the importance of sound money management and the detrimental effects of having poor credit. Sadly around 18 million brits are currently thought to be actively harming their credit score and risking their financial future.
Recently the economic downturn due to the Covid pandemic has seen the increased strain on people’s incomes and has resulted in more people missing payments or falling behind with their prices on credit accounts due to reduced revenues or increased bills eating into the money they have.
What Is A Poor Credit Score?
There are two main credit agencies in the UK and a list of variables that make up whether or not al ender accepts your credit application. On Experian, anything under 800 is classed as poor, and 720 and under is very poor. Equifax rates poor credit scores as those with a score of 420 or below with very poor from 0-279.
How Does Poor Credit Affect Your Day to Day Life?
Whether you realise it or not, having a poor credit score can affect more than a simple yes or no for applications you make. The effects can be wide-reaching and have an impact on many different things in your life. However, having poor credit now doesn’t mean this is it for you. You can always change your score and work to improve it by keeping on top of payments. You can follow money bloggers, listen to a credit risk podcast or join forums to get inspiration from others on how to improve your credit score.
This post looks at some of the ways a poor credit score can impact your life.
If you have a good credit score, you can have your pick of homes to rent. Because many landlords and letting agencies conduct credit checks before allowing you to move in, having a poor credit history could jeopardise your plans to relocate.
The prevelance of ‘comprehensive’ credit checks from companies such as Experian has made it possible for landlords to check your financial history before you move in. Over six years, they look for any financial mistakes, such as a CCJ or defaults, that may have occurred in your life.
This isn’t just restricted to those applying for a mortgage now. Everyone is aware of how a poor credit history and bad financial mistakes can stop you from getting reasonable mortgage rates or even a mortgage at all. But a poor credit score also affects your renting ability too.
Buying A New Car
Buying a new car isn’t cheap. Many people consider financing their new vehicle with a personal loan to spread the cost over a more extended period. Personal loans are typically subject to a credit check. The same is true if you choose to go the traditional route and secure a PCP or hire purchase deal through a car dealership, in which case your credit would also be checked.
For the most part, if you’re entering a financial agreement with a company – whether it’s to finance a new car, a new sofa, or anything in between – you’ll almost certainly be asked to provide information about your credit history.
Applying for Jobs
If you apply for a job in specific industries – for example, if you’re involved in financial transactions or cash handling – the employer may run a credit check on you before extending you the offer. This is solely due to the nature of the employment you’re seeking, and it is not a common practice in the recruitment industry as a whole.
Careers that require good credit include;
Higher Interest Rates
The better your credit score, the lower your interest rates will be. Lower rates and a good credit score means you are more likely to pay back what you owe on time as per your contract. A lower credit score is reflective of missing payments and bad financial decisions. So frequently, lenders will offer a higher interest rate to mitigate the risk of lending. Meaning, you are paying more money back as a buffer in case you default.
Do you have household or car insurance? Or how about life insurance? All the insurance premiums you are offered will be based in part on your credit score. Much like with loans, the more chequered your history, the higher your payments will be. If you are paying a lump sum upfront, you can usually eradicate this. However, if you make monthly instalments, you are being credited the insurance premium you are paying back, thus accounting for the higher interest rates or increased premiums.
Whatever your mobile phone tariff or utility bills, if you’re looking to set up a Direct Debit to pay your bills, it’s likely that your credit report will be scrutinised as part of the process.
When it comes to paying your bills, you’ll most likely have no issues whatsoever. If, on the other hand, you have a poor credit history – for example, if you’ve defaulted on a loan in the past – your utility company may require you to have prepayment meters to avoid running up bills meaning you end up paying more than direct debits.
While this might not be a make or break topic for new relationships, it can impact budding relationships, especially if you haven’t gotten your financial situation under control. People want to know what type of person you are embarking on a relationship with and your credit history and money habits play a big part in this. If you have experienced financial difficulties you have recovered from, you may find this isn’t an issue. But if you are exhibiting poor financial choices and errant behaviour as far as your credit is concerned, this can be a warning flag in a new relationship.
On the face of it, a poor credit score can simply look like being refused credit. However, suppose you fail to make amends and improve your credit score. In that case, you may find that you are experiencing the effects of this in other areas of your life, such as getting preferable energy rates or being able to advance your career or maybe even pursuing a new relationship.
Unless you’re already completely loaded, you’re probably like me and spend a fair amout of time thinking about what you’d do if you won the lottery. Aside from the obvious ones of buying a house and going on holiday, there are a few things that I’d love to do and so I thought it would be fun to share a few of them with you today:
A New Motorhome
Husband and I absolutely LOVE the idea of buying a new motorhome and spending time travelling around, seeing the UK and Europe. We’ve spent many an hour online looking at everything from top of the line Winnebagos to old converted school buses that people have made into the most incredible mobile homes and it’s something that would be really high on our list, should we win the lottery.
A Greener Car
I wrote a blog post a few years back about how “saving the world” seems to be reserved for the middle and upper classes, as they’re the ones who can afford to buy greener cars, install solar arrays etc. and I still feel that this is relevant now. We’re currently using my Dad’s car while we’re saving to buy our own, but it’s unlikely to be an eco-friendly electric model, so if we won some money I’d definitely be investing in an electric car.
This one might sound absolutely bonkers, but I’ve always had a thing about houses in trees! I don’t know if I’d want to live in one full-time, but if we had a big house with a decent bit of land and some big trees, I’d definitely get someone to come in and build us a super treehouse for fun camp outs and even to have family over to stay in!
My Own Book
Bear with me here, again, I know this sounds strange! I’ve been in the process of writing a children’s book for a couple of years now and once I finish, I’m hoping to get it in front of the right people to get it published. However, if I had the money, I think I’d skip this step altogether and just self-publish and distribute it without a third party. It would be a lot easier and I wouldn’t have to deal with the inevitable rejections from editors!
I started my OU degree back when Sausage was a toddler but between life getting busier and tuition fees TRIPLING since I started, it’s been well and truly shoved onto the back burner. If I have the money, I’d start some sort of course just for the fun of learning. We all focus on education being a gateway to a career, but wouldn’t it be nice to just pick something you’re interested in and learn all about it?
What would you buy if money was no object after a lottery win? Leave me a comment below, I’d love to hear your ideas.
Keeping your finances on the right track is always going to be a matter of making sure that you are preparing for the worst even when you are hoping for the best. Here are some inevitable costs that you probably won’t be able to escape in your life.
Though it might seem peculiar, we can start with the very last cost that you will need to think about that is completely unavoidable. What makes this cost special is that you won’t be paying the price. Instead, this will fall to your dependents. That’s why, believe it or not, a lot of people once they reach a certain age, will set up a funeral fund. This is designed to pay for all the costs of a funeral including the casket, tombstone, funeral photography and even plots of land. It might sound morbid, but it’s something that you might eventually want to think about.
You could also think about the cost of your child’s education. Now, it’s worth noting that you are under no obligation to pay for the costs of your child’s higher education. However, this is something that many parents will aim for to help their child avoid unnecessary levels of debt later in life. If you are worried about the cost, then it’s recommended that you do think about looking at the average cost that you will need to pay for your child’s college tuition. This will help ensure that you can set a saving goal. You should also look at savings accounts and investment opportunities that will ensure you can quickly grow these funds.
It’s also worth thinking about the cost of a home renovation. You might think that you can avoid this cost, but don’t be so sure. If you buy a home, then at some point, you will need to complete renovation work. Renovating your home will mean that you can deal with issues related to wear and tear that will limit the value of the property overtime.
It can also ensure that your home continues to be a safe and comfortable place to live for you and your family. This means that you might also be able to avoid selling your house to move to another property. Instead, with the right renovations, your house could become a forever home. It might also be worth thinking about emergency renovations that you might need to complete. There are lots of examples including flooding damage that will need to be corrected without any delays.
Next, you should think about your retirement. It’s never too early to start thinking about saving for your retirement. In fact, experts agree that you should be putting money away for your retirement as early as your twenties. In doing so, you can guarantee that your retirement does not catch you by surprise. Don’t forget, once you retire, you won’t have a fixed income to fall back on. As such, you will need to make sure to save enough money overtime to afford everything that you want during your retirement. This could include a trip around the world or something more practical such as care facilities when you begin to lose your independence. A financial planner will explain exactly how much you need to save for your retirement plan.
Finally, if you have a family, then you likely will need to consider the cost of transport. Most people will want to buy a car at some point that is large enough for everyone in the household. This can be quite an expensive purchase and, similar to a home, a choice like this probably won’t fit squarely into your budget. Instead, you need to make sure that you look at other options. You can save up the money to buy a vehicle. Or, you can think about purchasing a vehicle on finance. If you purchase a vehicle on finance, then you can make it easier to afford over an extended period. If you live in a city you might want to skip the car purchase and instead rely on public transport. It’s a great way to keep things cost friendly.
You can also think about purchasing a car second-hand rather than brand new. This is another way to save and spend less overall.
We hope this helps you understand some of the key costs that you do need to be prepared for in the future. By recognizing that these costs are somewhat inevitable, you will be able to make sure that they don’t catch you off guard.