Student Loans are Great

  By David | April 28, 2008 - 4:22 pm | Loans, Student Loans Leave a comment

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.

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Stay Out of Debt

  By David | April 17, 2008 - 1:09 pm | Borrowing, Debt Advice, Personal Loan Leave a comment

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 !!!

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Budget

  By David | April 5, 2008 - 4:05 pm | Budgeting, Debt Advice Leave a comment

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.

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Debt

  By David | March 23, 2008 - 9:50 pm | Borrowing, Credit Cards, Debt Advice, Loans Leave a comment

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.

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If Only It Was That Easy

  By David | March 14, 2008 - 6:44 pm | Credit Cards, Debt Advice, Loans, Personal Loan Leave a comment

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.

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Staying Out Of Debt

  By David | March 7, 2008 - 7:42 am | Credit Cards, Debt Advice Leave a comment

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.

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Top 10 Tips to Stay Debt Free

  By cashmachine | March 1, 2008 - 10:31 pm | Borrowing, Budgeting, Credit Cards Leave a comment

1. Never let your expenditure exceed your income. Use a budget to work out how much you can afford to spend on the various costs of living and stick to it!

2. Write down everything you spend. It’s surprising how much money you can waste on non essentials and not even remember where it went.

3. Unless you are possessed of sufficient discipline to use a credit card sensibly, it’s better to stick to cash. If your weekly budget for shopping is £60, for example, then take £60 in cash with you and leave the debit and credit cards at home. That way you can’t over spend. This is also a useful tactic on nights when beer can impair financial judgement!

4. Be leary of credit. If you can’t afford it now, odds are you won’t be able to afford it later. If you must use credit, check the APR, repayment period and possible penalties for late or missed payments.

5. Don’t carry money or credit cards “just in case”. That way you won’t spend on autopilot.

6. Never buy new when second-hand will do. Besides being better for the environment, buying second-hand is better for the purse.

7. Be a saver! Save up for planned purchases and treats. Shop around for good interest rates on savings accounts and watch the pounds mount up. It doesn’t matter if it’s only a small amount saved each month. It will add up.

8. The supermarket is not your friend! Supermarkets market their goods with great care and skill to seduce you into thinking you’ve got a bargain. If you didn’t need it in the first place, then it’s not a bargain. Write a list and stick to it.

9. Buy only what you need. Particularly for smaller families, buying large amounts of goods because they work out cheaper can be counter productive. Many products have limited shelf life and will end up going off and being wasted before they are consumed.

10. Enjoy your cash! Being free of debt and the “feel good” factor of some savings frees you up to really enjoy what you’ve purchased, rather than worrying about the debt which it has entailed. Go out and enjoy the debt free world.

Nothing is ever what it seems

  By moneybags | February 28, 2008 - 2:27 pm | IVA Leave a comment

It isn’t good economics for an IVA for under £20,000 to be taken on due to the fees imposed by the insolvency practitioner. The amount charged by the practitioner is very steep and problems keeping up the payments can prove very difficult. You should however seek IVA advice.

It is said that a certain amount is paid every month and gives the impression that the same amount throughout the IVA is kept to, but this is not true – the amount can change as the wage changes and as the cost of living is getting ever steeper it can prove difficult to justify your expenditures. It can seem a good way to rid yourself of the debt burden but it is for 5 years and that is a large portion of your life to commit for. If you own your own home at the end of year 4 you can be asked to re-mortgage and quite a large amount taken away from you which may mean you have paid all your debts owed anyway – considerably more than the 25% you are told you will pay.

On the other hand with bankruptcy you will automatically lose your home and if in certain employment, the police force being one of them, you will lose your job

But it is something that has to be thought about very carefully as an IVA is not an easy get out.

IVA is too good

  By green | February 15, 2008 - 9:25 pm | Bankruptcy, IVA Leave a comment

If you’re in debt, it’s easy to be seduced by IVA advertisements offering debt help and an easy way out, but be warned, these companies are looking to make money from your frustration. There is no easy way out of debt or the possibility of bankruptcy , you have to consider all your incomings and see exactly what you’re wasting and where you can make cutbacks. You need to see what interest you are being charged and work out clearly who you owe money to. No company is going to find a ‘little known legal loophole’ to give you a cause to not pay. These companies are just trying to reel you in to pay for their services.

If you are honest with your creditors when you find yourself in financial difficulty, they are far more likely to treat you fairly. You may find yourself paying a reduced rate of interest whilst a debt is cleared, and even be able to offer a reduced lump sum to clear it sooner. Hard work is the key to paying off debts; not wishing on stars and wasting time on schemes like this.

There are some excellent debt charities, such as CCCS, who offer free debt counselling and advice. They will help you work out a debt-repayment plan for free. If you’ve run up debt, you have a simple moral obligation to tighten your belt and pay it off.

Bankrupcy may be a better option than IVA

  By green | February 8, 2008 - 3:19 pm | Bankruptcy, IVA Leave a comment

It is possible that an IVA could right off 75% of your unsecured liabilities, but it is likely that the people would stand to benefit from this kind of reduction are better favoured by bankruptcy anyway.

Those who have a relatively low paid job and no property could almost certainly get away with paying about 25% of their debts plus insolvency practitioner fees – still more than 25% though. Creditors would be happy to get anything from this debt and have probably virtually written it off in the first place.So rely on ISA savings or speak to a debt adviser.

If you have a well paid job, home etc you are highly likely to have to repay most of what you owe. Whilst an IVA does potentially allow you to right off some debt, it is more of means of returning order to your finances as it helps you balance the books. The IVA will end after 5 years and your credit rating will be completely clear after 6 years providing you with a fresh start.