Habits that keeps You Poor

One of the top things that we like to talk about in the world of personal finance would be to try to get as much money as possible. Even if you don’t want to be Bill Gates or Sir Richard Branson wealthy, chances are good that you still want enough money to provide for your family no matter what happens in the world around you. There’s nothing wrong with that at all. As we looked back on 5 years of providing personal finance information, we found that there are some habits that might be keeping you from having the type of money that really lets you be comfortable. Below are a few of these listed out for you.

First and foremost, it’s the tendency to spend your money when you’re young and you feel like it’s coming in buckets. It’s easy to think that you have plenty of time to save for retirement, but do you really? That can be a hard pill to swallow when you’re 55 and you need to make sure that the money that you’ve scraped together manages to last. What would you really do if you had to come up with money that’s outside your small budget? If you start saving, you won’t have to answer that question at all. You’ll be too busy making sure that your life is filled with incredible experiences. That’s just the way it is.

You get to jump in and save while it’s on your mind. People say that they don’t have money to save, but this is a habit of the eternally broke. Is that harsh, yes, but I’m not trying to be. I’m trying to warn you before you walk down a path that you can’t escape from.

bad habitsThat’s an important point to keep in mind. This isn’t something that will improve itself overnight. In order to really get the benefits that you’re looking for, you have to be able to make better decisions. Yes, there’s going to be pressure to do what your friends are doing. However, if your friends are anything like my friends were, they aren’t going to be thinking about their health or their finances.

I grew up with a circle of friends that had to have all of the latest stuff. As we got jobs and started seeing more money coming in, we thought we’d never have a point where we would be skint. Unfortunately, I got sick and I had to live off of my savings. My friend also got sick, but he didn’t have any savings to live off of. He had to plead with his mum to move back home, which is downright embarrassing when you’re an adult.

If you miss monthly payment son bills, you’re going to be hurting your credit rating big time. This is something that I wish someone had told me when I first started out with credit cards. I was also told that if I could just come up with the minimum payment, everything would be fine and there would be nothing to worry about. Unfortunately, I found myself caught up in a bad situation. I knew that I needed help, but everyone told me to just keep making those monthly minimums. All that really did was take care of the interest. It didn’t make much of a dent in my principal. I was lucky enough to get bailed out by my grandmother, but I learned a very important lesson — just because someone said that you should be paying the minimum doesn’t mean that’s where you have to leave everything. You have to make sure that you’re protecting your own interests at all times. Sure, some people mean well but they might not have much more financial knowledge than what you have. Continue reading

Are Energy Bills Going to Become the New Mortgage?

We hate to get sensational, but there’s a new report out suggesting that in five years, energy bills could actually become more expensive than your average monthly mortgage payment. Now say that three times fast, and you’ll still be confused… and agitated.

We’re not trying to make this into a joke, not at all. The truth is that a lot of people are looking at the way energy bills are going, and they’re dying for some sort of relief. It can be hard to really see the type of relief that you’re looking for, but the reality is that it’s right under your nose.

Energy Bills

Mr. Ian McCaig of First Utility has been waving the warning flag, and he wants people to start changing the way that you’re using their energy currently. He suggests wearing more layers and lowering the temperature in the home so that the house isn’t running as hot. This can be something that cuts down on consumption and therefore on the bill, but is he aiming the finger of blame in the right direction?

Some feel that McCaig’s comments only added fuel to the fire. Energy policies need to be reformed, and there’s just no way around that at all. You have to be able to get things underway on your terms, not anyone else’s. That’s going to be the key to getting everything to fall naturally into place.

You are better off thinking about everything involved in the world of energy as it relates to your home’s consumption and no one else’s consumption.

There have been increased calls for alternative energy, but only time will tell if these calls go answered or not.

We will keep you posted if there are actual changes in the energy policy. Although First Utility is issuing statements about energy savings, they are actually raising the energy tariffs by 18%!

Clearly, you have to take everything you read on the news wire with a grain of salt, but these are going to be some very interesting times indeed.

UK Adults Looking More to Inheritance But Is That The Way to Go

Inheritance. The word makes us immediately think of rich uncles that we never got to meet, but who thought about us. Aww, that’s just precious. The reality is that a lot of Britons are hoping for an inheritance, which we think is definitely terrible financial advice. The reality is that you don’t want to try to go on just an inheritance — it may never come. Even if you know that your aging parents have done “all the right things” and built up quite the savings, there are little things that really can take away from your inheritance chances.

First and foremost, you never know if they would rather leave their assets to charity or not. If they feel that you can manage on your own, they may start thinking about the millions of people suffering all around the world. There are plenty of people far worse off than you, but you probably aren’t thinking about that. You’re hoping that your parents will remember you. They may, but they may feel that you should be grateful for what has already been given. Think about it — aren’t there things that you could be doing with your money, but choose not to?

InheritanceWhat about their home — surely they will leave that to you, right? Don’t be so sure. Many retirement-age Britons are choosing to go with a lifetime mortgage of some type. This means that they are giving the house over to the mortgage company after they pass on or need to move to long term care. This means that it’s no longer about passing property to their heirs — it’s about making sure that they have as comfortable of a retirement as possible. Considering the cost of living has increased dramatically since you were a child, it’s no surprise that your parents are probably trying to do everything they can to have some sort of comfort. When you are ready to reach retirement age, you will certainly appreciate the type of strain that they were really under at the time.

A lifetime mortgage doesn’t wipe out every last bit of the inheritance that you would receive, but if you’re hoping to quit your job and live off your inheritance, it just won’t happen. Worse case is that you’ll receive enough to have a few fancy dinners and that’s about it, or something to put in care of your children’s education later down the road.

Thinking about the future can make you feel tired, and with good reason — things aren’t at their best. Yet that doesn’t mean that the best cannot come eventually. You just need to make sure that you’re focusing on your own financial blueprint more than what your parents are doing. You only have a finite amount of time left with your parents, so it’s time to enjoy them and not worry about what they’re going to leave to you. That’s the real way to go!

Check Into OEIC’s Today for a Hassle Free Way to Grow Wealth

Trying to save money is one thing…but what about growing it? As promised, we are continuing our series on investing your money in the UK for your own benefit. Investing doesn’t have to be something that’s impossible or hard to understand. Simply put, it’s all about making sure that you can truly handle your money needs over time. Inflation erodes your purchasing power, which means that you have to grow your money in order to just keep up with the market. Now imagine if you just buried your money in the backyard — it would be worth a lot less than if you had put your money into the right accounts. But every guide says that, and very few actually tell you where to place your money.

It’s time to take a closer look at the OEIC, otherwise known as the Open Ended Investment Company. This is a form of a shared investment fund, and it’s going to be used to buy directly from the marketplace. It’s like a pool of money. When the pool is big, better investments can be selected. When the pool is small, all of the investors in the group have to take on a lot more risk. Therefore, OEIC’s with big pools of investors have more spending power and a better method of diversification than individuals do.

Open Ended Investment CompanyThe open ended aspect is what investors really like — they can buy or sell shares as they please and they don’t have to tell anyone about it. You will see that the buy and sell price of shares are identical. You can also get back what you originally paid if you’re ready to exit, but you’ll benefit so much more if you leave your money in. The shares that you purchase as entrance into the fund are generated automatically. Your money is pooled with other investors to build a portfolio. Portfolios will have power on their own — this is where the value comes into play. If the value of all of the stocks, bonds, and other assets within the portfolio go up, then your shares grow to represent this principle.

Keep in mind that there are risks involved. You do run the risk of losing more than what you’ve invested, especially if you have an automatically investment plan set up.

You’re not going to be alone within the OEIC. Master level investing professionals manage these funds. They know that if they don’t do a good job, they’ll face a mass exodus of investors leaving the fund, cutting the money supply for everyone else. Remember what we said about big groups? Well, these investors need to make sure that they leave the door open for everyone below them to trust them. Continue reading

Giving Yourself the Chance of Financial Freedom

Don’t give up on yourself. It sounds odd to lead an article with such a cliché statement, but when we look at so many stories of hardship, we can’t help but say it. You might feel that you’ve hit rock bottom. You might feel that there’s really no way to go but down, but the truth of the matter is that you have to have hope. You have to believe in yourself. You have to see all things as being very possible. That’s just the way it is. You can’t sit here thinking that you’re going to have problems no matter where you look.

It’s always a good thing to figure out where you really will fit your finances. You have to think about financial freedom because it really opens doors. Sure, you want a house down the road. But if you don’t have the extra money because you’re too busy fighting all of your debts, then what? What will you do when you have to think carefully about your place in the world? You need to have the right amount of confidence in yourself in order to really get the job done. From there, the world awaits!

Financial Freedom

Debt management schemes can help you reach financial freedom, but they’re not for everyone. Indeed, you have to have the right mindset about achieving financial freedom, as we’ve mentioned before so many times. If you aren’t ready to start paying things on time, you’re only going to make yourself feel tired and frustrated. That’s no way to go through life, and it’s something that you should definitely look into fixing. If you start paying your bills on time, your credit score is only going to go up from here.

Debt management schemes aren’t always accepted by creditors, but a 3rd party can negotiate for you. As long as you’re making those payments and it’s likely that everything is running smoothly, you’ll have really no problems to honestly worry about.

Keep in mind that once you have realized financial freedom from debt, you need to do everything that you can do to maintain it. It’s going to be tough to do, but it’s definitely worth doing. You just have to figure out what to start with.

Your bills can feel like they’re out of control, but it’s just money. Don’t give money power that it doesn’t deserve. Money is designed to be your servant, not the other way around. Think about putting extra money from birthday gifts and such towards your debts large and small. Once you see momentum it’ll be much easier to just stick to the program. Good luck!

The Benefit Cap is Coming – Are You Ready for It?

There is a benefit cap being established across the UK, but the test program has started already in London. The cap focuses on the amount you can actually get from the Government if you aren’t of pension age yet. This means that millions of Britons will be affected by the cap. As you might expect, there’s a great deal of outrage over this, along with a lot of shock. The program just launched in Haringey, Enfield, Croydon, and Bromley on April 5th. The new rules indicate that couples and single parents alike cannot receive more than 500 a week from the Government. Singles will be limited to 350 a week. This is being rolled out to combat complaints that there are people on the public system that are receiving a plush package without needing to work at all. This affects those that are getting Housing Benefit, but it’s still something that you should be looking into.

Even if you’re not getting Housing Benefit, it could affect you later down the road if you’re getting Universal Credit.

Let’s say that you and your spouse get 525 pounds a week right now, and 50 of that is the Housing Benefit. Since the benefit cap is 500 pounds, you receive 25 more in benefits than the cap. So the 25 would be deducted from your Housing Benefit, and that means that your new HB would be just 25 pounds.

Benefit Cap ukThere are some exemptions that are being put into place. You’re on safe ground if you get Working Tax Credit, as well as if you’ve reached the age where you can receive Pension Credit. There’s also an exemption if you have benefits for sickness or a disability. War Widows? Exempt. Widowers Pension? You’re exempt there as well.

We understand that the benefit cap may make things a bit difficult for you. If this is the case, perhaps you can look for work, or raise the hours that you’re already working. This would allow you to claim the Working Tax Credit and be exempt. If that’s not possible, then you’re stuck getting things into place as fast as possible. You might have to move to a cheaper flat, which isn’t always possible. The thing is that you have to do anything that you can to stay keeping everything together. Focus on that, give yourself enough time to look at other resources and go from there. Good luck!

A Return to Index Tracker Funds

Look, we talk a lot about active investing. However, there might be part of your portfolio that you really do want passive. That’s perfectly all right. Everyone wants to be able to just casually look at your portfolio every quarter to see where they stand…if they bother to take that much time. How can people spend so little time on their portfolio and still see their money grow modestly? Through index tracker funds, of course.

There are quite a few index tracker funds out there — the goal is to match the performance of an index, a basket of shares that represent part of the stock market as a whole.

A classic index would be the FTSE 100, which tracks progress for the top 100 companies on the London Stock Exchange. There are tons of tracker funds on the market, including specialist ones that let you narrow in on sectors you like — such as biotechnology and pharmaceuticals.

Index Tracker Funds

Keep in mind that the tracker isn’t about shattering the returns that the index is putting out. It’s just there to match performance. However, this can be a bad thing — when the market dips, the tracker fund tends to take a beating. This is very much the case in bearish markets where investor sentiment is very volatile.

There are a few things that you want to look for if you’re going to take this tactic.

First and foremost, you want to make sure that you keep your fund dealing fees as low as possible. If you can, go with a fund that has no fees at all involved when you buy and sell funds within your account.

You should also be looking for a tracker with a low annual charge. This means more of your money is there to work for you, not the fund managers. You also want to look and see what options you have. Do you want to branch out into emerging markets? Do you want to stay close to home? Do you want to go international in established markets like the United States? There’s a lot of options waiting for you.

Taking to a professional before you sign up can help you clear up a lot of questions. If you’re going to go with a specific firm over another firm, make sure that you’re asking as many questions as you need answered before you commit to anything. Buyer’s remorse is just a bad idea, and it’s even worse when it comes to something as important as part of your financial future. Good luck!

Realizing Your House Dreams After Bankruptcy

Let’s be real here — bankruptcy is no laughing matter. Once you decide to declare a bankruptcy, there’s no turning back. You’re making a decision that will affect your credit for a very long time. However, don’t let this information cloud your thinking, as if you aren’t going to see sunnier skies ahead. The reality is that most of the people that declare bankruptcy really had no other option. It’s time for a fresh start. If you know that you’re ready to make changes in your financial life, then bankruptcy is a valid option. You will not be able to let your spending get out of control again. After all, you have to remember that you’re not going to be able to declare bankruptcy again. So that option will be locked away from you. If you feel that you’ve “learned your lesson”, it’s time to check out the world of credit again. We promise you that there are plenty of opportunities out there to make your dreams come true.

One of the top questions that people have after bankruptcy is about whether or not they can actually get a house. The UK housing market is actually very forgiving to those that have declared bankruptcy. If you’ve started getting new credit and taking care of it, lenders will be watching for this. Mortgage offers could come to you as early as six months after your bankruptcy has been fully discharged. This is something that can make you feel pretty good.

The truth is that lenders have all of the reason in the world to start looking at you. After all, you can’t declare bankruptcy again, and most people have realized that it’s time to make a change. This means that they’re getting a potential mortgage customer that really does understand what it’s like to be upside down deep in debt, and they don’t want to go back to that place ever again. This means that they’re getting customers that are much more likely to pay their mortgage payment on time each and every month, the way it’s supposed to be.

UK housing market You want to make sure that you are taking steps to really get in line for a good mortgage.

First and foremost, you want to get a copy of your credit file on your own. You want to check it for any errors. While it’s true that your bankruptcy will be on there, you want to make sure that everything looks proper. Are there debts that weren’t included in bankruptcy? If so, they need to show that they are being paid on time as promised. Indeed, you want to show as few late payments as possible. After bankruptcy, missed payments really do start counting hard against you. The credit system rewards you after bankruptcy very well for making good decisions, but if you don’t straighten up then you’re going to get dinged.

It’s also a good idea to discuss your report with your mortgage lender. You want to make sure that they understand that you really have changed. If you have kept the same job that you’ve had before the bankruptcy, this is a positive thing that should count very much in your favor.

Another point here is that you need to make sure that you are looking for a house that’s truly in your budget. If you get approved for 120,000 GBP home and you can find houses for 85,000 GBP or even better, then you want to go with the cheaper home. There’s always room in the future to get a home improve loan to improve upon what you have. You need to start thinking “starter house” rather than trying to expect the perfect house with all of the bells and whistles. Remember that you want to go easy when you’re trying to get your life together.

Don’t forget that you really want to make sure that you have a good savings account. You’ll need to put up a strong deposit because you do have credit problems as part of your file, and you’ll also need to handle the initial fees involved when getting a new home.

It sounds like a very challenging process, and it can most certainly be that way. However, there’s nothing that says that you have to skip over getting a home for you and your family. You just need to make sure that you’re thinking about all of the little details that go along with this new goal of yours. Good luck!

Could We Ever Live Without Money

With so much financial turmoil lately being represented in the news, some people in the personal finance world are asking whether or not we could actually live without money. This is a radical prospect to some, but not all. The truth is that our society runs on money, and if you have it — you’re in the clear. However, if you struggle to even keep the lights on, you might find that the pursuit of money is something that’s difficult. It can be hard, but it doesn’t have to be that way.

The reality is that humans are unlikely to just stop getting into money. They’re going to go from one currency to another. Bartering is something that’s likely to keep happening. Money is simply a universal way of bartering. It’s something everybody wants and has deemed to be valuable.

However, there are little ways that you can start pulling back from money.

Growing your own food can be compared to printing your own money. The amount of money that you will save on feeding yourself with your own hands is incredibly. Granted, you might not be able to grow just about everything and anything that you can think of, and it might take you some time to get started. Nevertheless, there are plenty of gardening clubs in your area that would be more than happy to help. And if there’s not a formal group, why not start one? You might be surprised to find how many people share your view of the world.

Live Without MoneyYou also want to see what you can do about getting your clothes secondhand. No matter where you live, there’s probably somebody throwing things out. Why not just get the clothes that they no longer want? Why not make sure that you can get the things that everyone else has forgotten about? That’s really the ticket to getting things done, you know.

You can also trade services for other services. For example, you might make some really awesome cakes — that means that you can offer your services to the guy next door in order for him to hang your Christmas lights. It’s little things like that which can truly change the way we all live and work together.

Of course, the money that you save from all of this should go into a savings account. Yes, we’re nagging you to save money again but it’s worth it, isn’t it? You have to make sure that you’re getting all of your needs met from start to finish. It’s really the best way to get everything you want done. Good luck!

Reviewing Your Financial Situation After a Divorce

Getting yourself back to ether after a divorce can be one of the hardest things around. After all, you’re trying to pick up the pieces from a situation that you never thought would happen to you. Even though the rising divorce rate brings people pause, we still walk down the aisle. We still believe in the best that people have to offer. We believe in love conquering everything…until it doesn’t. We’re not trying to sound bitter, or even to throw your marriage in your face. All you can do is try to pick up the pieces. One area that gets neglected far too often would have to be the financial. Indeed, without having your money in order you can’t really move on. Just about everything that you really need to focus on is going to cost you money. There’s no getting around it, and you can’t hide from it. You’re going to be tempted to ignore all of the bills, but this isn’t the way to go either.

First and foremost, you need to sit down and gain some clarity about your situation. Just how much money is in the bank? How much money did you get entitled to? Do you have maintenance coming in? Child support? Do you get to take the investment account that you started with? What about any gains? Were those equally split down the middle? If you’re in the middle of negotiating these things, Don’t just let your partner have everything. You might feel tired and sick, but the reality is that you need to fight for a way to start over. That’s all it’s about at the end of the day. Divorce hurts, but being able to start over is really going to give you a chance to feel better over time. It’s going to hurt for a long time, but you have to make sure that you can give yourself a chance for a better life than what you had. You just can’t do that if you give your partner everything. A lot of people do this in order to feel extra sympathy from family and friends. Sympathy just isn’t going to pay our bills, and it’s certainly not going to take care of your when you’re old. Sure, the government will be there to do a few things but that doesn’t mean that they’re going to do everything. Being aware of what’s around the corner is a very good thing no matter if you’re a man or a woman.

The budget will probably have to be different when you’re going from two incomes to one. If you can help it, it’s time to cut out all of the things that you used to spend money on. A lot of people hate doing this, but it’s really the best thing that you can do for yourself. You really don’t want to find that you can’t move on because you’re too busy racking up debt. If you’re used to going out to eat, you might want to stay at home. Dining out is expensive and it cuts into the other plans that you have for your life. This is the same with buying clothes. There’s nothing wrong with going to a secondhand shop to check out some cheap items. You might not wear designer clothing, but you’ll have a bank account that’s full of emergency cash.

Financial Situation After a DivorceYou have to get better and better at anticipating emergencies. That’s really the best way to go when you’re trying to start over. Emergencies can be prevented when you have savings, but you have to make sure that you start saving. A lot of people brush this advice off, then cry themselves to sleep at night wishing that they had followed these simple words. Saving money isn’t the end of the world. Although it might feel like you’re depriving yourself, you are actually giving yourself the chance at a real future. What could be better than that?

There’s no way around the emotional heartache, but you don’t have to let your finances go crazy. If you were awarded the house, you need to make sure that you can take care of the maintenance. If you were awarded a car, then you need to make sure that the car is kept up properly. If you can put bills on autopay so you don’t have to think about them, this might be a good idea.

Speaking of emotional heartache, one of the worst things that you can do is try to get back at your new ex. You don’t want to focus on them. Don’t call them up, don’t scream at them and don’t make your mutual friends have to pick sides. This is just uncomfortable for all parties involved. Once the anger clears, you will hate having acted in such a tacky and childish manner.

Credit cards will need to be paid for. If you can’t make payments, don’t try to wait till the last minute. Trust us — credit card companies have heard just about everything that you can possibly think of. They’re used to it. So there’s no need to hide until the final moments — you can let them know ahead of time that you’re having problems. If you were a great customer before, you’re still going to be a good customer in their eyes. It’s just a matter of moving things around a little bit. Continue reading