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Author Archives: David
Are Student Loans Evil?
Student loans are the spawn of Satan. I was unable to find a job after my studies were complete and I seem to have this huge loan hanging over my head. Because of the length of time that you are allowed to take the loan over it sits in the background until you are working and then bang your supposed to pay it back. I understand that the rates are favourable, there inst really a rush to pay it back but just knowing its there for so long makes me feel particularly nervous.
I like to be able to pay my own way, but a student loan was deemed to be the answers to all evils and wouldn’tt be any hassle at all. For me its just a big mill stone around my neck and its a stress that I could live without when I’m trying to find a decent job. In truth I never spent it on anything worthwhile, I borrowed more than I should of to pay the course materials and the day to day living and squandered more of it than I should of done. I am truly paying the price for it now.
Tagged Loans, Student Loans
Student Loans are Great
Student loans are definitely good: as a third year student its very hard to get through all the course work, hold down a day job and pay all your bills.
Without a student loan I would not be able to keep a roof over my head as I am studying away from home. I would not be able to afford the course materials and I would be eating pot noodles seven days a week rather the three days a week I am eating them just now.
I understand that I will have to pay it back one day, but by that time I will be in a good job with a reasonable salary and I will be in a position to do so. The long term nature and the low interest rate of the loan makes this an ideal way for me to get through my studies without putting myself into dangerous debt elsewhere.
Tagged Loans, Student Loans
Stay Out of Debt
Get help with debt. It is so easy to get into debt, but not as easy to get out of it.
The first thing you need to do to get debt free is set a realistic household budget. List all things you have to spend money on i.e Gas – Electric, mortgage, then list all the things you want to spend money on. The goal is to separate between ‘Need’ and ‘Want’ for example you ‘need’ to eat or you ‘want’ that new cd.
The idea is to look at you outgoings and see where you can make cut backs, set yourself a shopping budget for food. Some examples of how to save money on groceries, household bills.
1. Ask your supermarket what time they mark down there products, and purchase these when they are cheaper. Most things can be frozen to restore the sell by date.
2. Grow your own vegetables and fruit alot cheaper than buying.
3. Use price comparisions sites to check you are not paying to much for your gas – electric or mortgage.
4. Check with your enegry supplier to see if you have an economy setting, do you washing etc in the evening as it is cheaper.
5. Take a shower instead of a bath, its cheaper.
6. Do you really need the heating on ? Can you just put on another layer of clothing.
7. Hang clothes to dry on a rainy day indoors over the bath or use a clothes airer, its cheaper than the tumble dryer or radiators.
8. Use natural products for cleaning its cheaper and better for your health !! I.e Vinegar for cleaning windows.
Overall just think about ways to do things on the cheap, research and you will be saving money and getting out of debt.
Remember pennies make pounds and pounds make rich men !!!
Tagged Debt Advice, Personal Loan
Budget
In addition to the standard ‘write and stick to budget’ there are a number of further ways to help you stay out of debt. One of the most effective ways is to carefully think about whether you actually need to make a purchase – don’t just buy something because it’s on sale, on offer or because you’ve fallen madly in love with it at first sight. If after a lot of careful deliberation you realise that you do need it – then if you don’t have the money, save up for it. Remember that by paying for anything with borrowed money, you’ll end up paying a lot more than the price tag once you add on all that interest.
Another great way to stop impulse purchases causing debt is to freeze your credit cards – Seal them carefully in a freezer bag, and then put this bag into some water to freeze. Your cards will still be there when you need them – but the time taken for them to thaw out gives you thinking time about whether you really need to use them.
If you can afford it put a small amount of money away each week or each month. No matter how small, eventually this will mount up to a nice little pot to help cover any rainy day emergencies. Make sure that this money is put in a high interest savings account – and put the first £3000 in a cash ISA to avoid paying tax on your savings.
Debt
So you have a household budget that you stick to but you’re still worried about falling into debt? Well that is understandable, all it takes is for the boiler to pack in, or unforeseen circumstances to pop up causing necessary expenditure of cash you don’t have.
The first way to buffer against this is to save regularly and have a savings pot for when things go wrong. At least part of the saving should be instant access for when money is needed urgently, as I found out when my cooker died! Being debt free doesn’t have to mean no credit cards.
Many credit card offer a percentage cash back for using them and as long as the balance is paid off in full every money this will save you money rather than charging you interest.
Don’t forget those insurances you pay every month either, if you drop the iron on the carpet (as i did in december) then you can probably claim it off the house insurance if you have accidental cover.
Tagged debt, Debt Management, Loans
If Only It Was That Easy
Debt. We live in a world where it is easy to fall in to debt problems. Some debts are unavoidable & I think that it is important to manage the debt you have so that it does not cost you more that it absolutely has to. Its also important to have a goal of being debt free & not borrowing unless it is 100% necessary.
Mortgage
Our mortgage is the biggest loan any of us will be personally asking the nice bank manager for. I think that 100% mortgages are a bad idea as they give you 0% equity in your property for the first several years. Also, if there is any down turn in the market you could find yourself in a negative equity situation. This means that if you sell your house, the amount realized from the sale would not cover the amount you owe. No one wants to have to pay for a house that they no longer live in. Many people pay a little extra off their mortgage every month. This is a great idea as it reduces both the amount of the original debt & the interest that you are charged. You are also reducing the term of your mortgage.
I think that it is important for people to take the time & look for the best mortgage deal that they can get. Its now easy enough to change your mortgage provider & can often make a considerable difference to your interest rate.
Credit Cards / Store Cards
Unless you can afford to fully repay the amount owed every month I think that cards are the easiest way to end up in debt. The interest rates are high & it is far too easy to charge items to the card either online or in shops, restaurants, bars etc.
If you find yourself with large card debts cancel your cards & transfer your balance to a new card. There are lots of 0% interest for the first x months offers. This will give you breathing space to reduce the debt without the interest charges.
Holiday / Car / Wedding Loans
The golden rule should be that if you cant afford to pay for it outright then you cant afford it.
Lenders are giving out loans far too easily. There is nothing wrong with saving for a few months in a high interest account & then buying your car or going on your holiday. Most people are surprised at how quickly it adds up & once you are in the habit of saving it become easier.
Tagged Credit Card, debt, Loan
Staying Out Of Debt
In today’s society debt is an issue for many people. Almost everyone knows someone who has been affected by debt. One major way to avoid getting into debt is to plan ahead, not just by creating a budget and sticking to it, but also by saving.
Saving money is a very similar principle to setting a budget. Firstly you need to look at how frequently you are paid. If you are paid monthly then you set yourself a monthly savings target, if weekly then a weekly savings target should be set. Generally you should aim to save at least 10% of what you bring home in your pay-packet after tax, national insurance etc. So if, for example you earn £1,200, then you should aim to put £120 of that into a savings account. However, if your on a really tight budget save as much as you can afford to, even 1% is better than nothing.
It is very important to keep your savings in a separate account to your normal everyday spending account, otherwise you risk unwittingly spending your savings. It is also extremely important that you make your savings work for you – you want to get as much benefit from your savings as possible, so a high interest account such as an ISA is advisable. Once you have put your savings into your chosen account forget about them, they are not extra money for you to use on frivolous things, they are there as a back up plan, to stop you getting into debt if a cash-crisis emerges such as the temporary loss of income or your roof collapses.
Dedicating the time to sorting out your finances and planning a savings-budget is one of the most important investments that you can make. Making a small commitment to save just 10% of your pay, an amount which many of us would not miss, could really make the difference between being financially secure and getting into debt.
Tagged debt, Debt Advice