Saturday, 26 January 2013

Good Financial Management Doesn't Need To Be Complicated

Do you sometimes think it is becoming impossible to keep your head above water when t comes to personal finances? Are you a compulsive, careless spender? If so, we have a few simple suggestions to help you finally get a grip of your day-to-day money and gradually over time improve your financial outlook

First things first you need to learn to live within your means. Take a long hard look at what you are making each month - that is, how much you take how after deductions for tax, national insurance, student loans and the like. Be brutally honest with yourself when assessing your financial position. If not you are just deluding yourself and will simply end up delaying the inevitable.

Get rid of those credit cards and store cards that are charging you ridiculous amounts of interest.If you already have balances on them devise a plan to pay them off within a set period. Make the timescale one you can afford, but make sure you commit to paying more than the minimum each month or you will never get anywhere.

If you take the time to assess your income and outgoing you will be able to come up with a plan that allows you to live more comfortably without a significant chunk of your monthly income just going to service interest on your debts.

If you have savings then you would be much better off using those funds to pay off your debts than have the money sitting in an account somewhere earning a few pennies interest each month. That said, it is always worth having some money put aside just in case f emergencies. As with most things relating to personal finances, careful balancing is the objective.

As soon as you start to address your personal financial position you are effectively on the way to a better financial future. Most people simply bury their head in the sand, hoping against hope that things will improve. By devising a strategy and sticking to it, you are not trusting to luck, but instead determining your own financial destiny.

Wednesday, 19 December 2012

Hassle Free Steps To Sort Out Your Debt

In the current worldwide economic reality it is  vital that we all keep as tight a rein as possible on our  expenses so we  are aware  precisely   the things we are spending our  monthly income on .  Many of us, even if we are in full-time employment, still  like to have access to credit to smooth out the  peaks and troughs in our income and expenditure  during the month . Problems arise when we  can’t  settle those debts we have perhaps incurred  on our  credit or debit cards or by way of a personal loan.  Therein lies the reason why we  all require to get more  capable at  organising our  finances. 

What follows are a  number of   easy tips   to help eradicate  your debt problems simply and - relatively - painlessly.

If you find  having a number of credit cards in your purse  is just too  hard to resist, simply  get rid of them. That’s right, cut them up and then you will no longer have to dread the month-end  statement from your card issuer.  If this strikes you as being a bit too drastic , then another  suggestion  is  not to take your cards with you  when you  take some time out to go shopping or perhaps  go out for a meal with some of your mates.  By doing this you  you will avoid the temptation  to splurge on  an item you could have probably done without, only to regret things later.

You will not only see immediate results from this tip, but, as time passes, if you get into the habit of  not  depending on your card  when you are out and about, you will after a whilealter your spending habits by  dispensing with those impulse   purchases that can  can end up being so costly.

As time passes and you get into the habit of watching your spending and get accustomed to working to a budget, you should find that you  end up with some extra cash available when the end of the month comes around. Make good use of these extra funds by  placing them in  a savings account. Initially you ought to make sure that any excess monies  are placed in an instant access account,  meaning you are able to withdraw them in the event of an emergency . However, as time  passes, if you stick to your budget, you should be able to grow a nice little nest egg and then look at ways of increasing the return on your capital, by investing in something a little more long-term, such as an ISA or similar.

Tuesday, 11 December 2012

Get Into The Habit Of Preparing A Monthly Budget

In today’s difficult economic conditions it is essential that we all pay much more attention to our personal finances.  In practical terms this is best achieved by setting out a simple budget of your income and outgoings. Failing this, you are just leaving things down to guesswork - however educated that guesswork may be - with the possibility that you could inadvertently slip into debt which could easily have been avoided.

Preparing a budget is not necessarily complicated, but will require you to devote a little time to the exercise to get it right 

 The starting point should be to determine how much your income is each month  If you are an employee this should be simplicity itself - have a look at your wage slip and take a note of your net pay each month after deductions. If you are asking yourself if all this is really necessary, just consider what would happen if you had a bit of a crisis, such as needing an urgent repair to your car, while pay day was still a few weeks away. Would you need to use up expensive credit from expensive providers? If you have a budget in place, that should be avoidable. If it is not, always try and use a responsible lenders like Bluesky Loans.

 If you work for yourself this may not be quite so straightforward because for most self employed people their incomes varies each month  A good idea would be to quantify your income based on an average over, say, six months . 

 Remember to include any other monies to which you are entitled by way of things such as interest or dividends payments  The most important thing is that you should look at your income frankly and objectively because it is the starting point for your budget and any inaccuracies here will affect everything else.

 The next step is to take a look at your outgoings so you can get a feel for the payments you need to make each month  Work out how much you are committed to pay each month on unavoidable recurring expenses such as your mortgage or rent, heat and light, car expenses - if you have one - and any other regular costs you incur each month. Having a firm grasp of where you money is going each month is key to budgeting for the future 

 The next stage is probably the easiest part of the whole process. You just take your expenses away from your income  If this results in a minus number, it means you are spending too much each month and are likely soon to build up a debt which will need to be addressed  So, why not now?

With any luck, though, the result will show an excess in your favour, so you will have to make a decision on what you want to do with the extra cash you have each month .

In most cases any surplus funds should be allocated to one of three separate areas. Any excess should probably be divided into three distinct categories  Firstly, you need to set aside some money for unexpected expenses such as when your gas boiler breaks down in the middle of a freezing winter or when your car needs an urgent unexpected repair.  Next, it is a good idea to allocate some of your surplus to regular savings.  In the first instance these savings will be a useful supplement to your contingency fund as referred to above, but after you feel you have a comfortable enough buffer against contingent expenses, you can consider savings for investment purposes.

The last thing to do is to allocate some of your surplus so that you have some money to go out with friends from time to time  It’s important to recognise that we all need to enjoy a little treat from time to time. Creating a budget which denies this is unrealistic, and means you are less likely to stick to it in the long run

Once that’s done and you have a clearer picture of exactly what you are spending your money on, it’s the right time to get down to work on the budget proper

The first step is to set out the goals or aims you hope to achieve with your budget, both in the immediate future and in the longer term. Start off by setting out the goals you have in mind for your budget. These should be short-term, such as having a bit more extra cash each month, as well as more long term goals like saving up a deposit to enable you to buy a house Long term goals are important when setting a budget as they give you an incentive to stick to the plan even when times are a little rough.

Don’t worry if you are not an ace with figures.  You want your budget to be based on sound figures but that does not mean you need to be a maths genius to create a workeable plan.  If you lack a little confidence with figures you could always try to create your budget using one of the terrific software packages you can now get for your pc or other device  They will help make drawing up your budget so much easier. What’s more they are not expensive, so you won’t blow your budget by investing in one!

Set out a note of regular unavoidable expenses that arise every month Most of this will already have been taken care of when you went through your income and expenditure previously . These are the bills that you must ensure you pay on time when they arise and your budget should be built around ensuring this.   If you do not make sure essential bills like your mortgage or card payments are met as they arise your credit report will be adversely affected and this in turn will have a detrimental effect on the goals you set out in your budget  

Once you have established your budget, you need to stick to it and that requires discipline and self restraint. 

It can sometimes be difficult to stick to the plan but that us why it is worthwhile setting goals.  That way if you are having to make sacrifices from time to time, at least you feel you are doing it for a purpose. Here are a few other simple tips to help you stick to the plan:

It is often a good idea to record details of your daily spending as you go along  .  This simply helps you to focus on where your money is going and identify areas where you could perhaps make savings quickly and easily.  After a while , it will become second nature and something you will probably become aware of without the need formally to record it.

If you are going on a night out - remember you have already budgeted for those little treats - try to avoid temptation by leaving your credit or debit cards at home 

Don’t take your money out from your bank account several times each week. Instead, check your budgeted spending money for the week ahead and withdraw it in one fell swoop at the start of the week There is nothing quite like  a rapidly dwindling   amount of cash as the end of the week approaches, to  concentrate the mind on your spending habits.

The last thing to say about budgeting is that we all tend to slip up from time to time  It is only human nature. Just make sure you get back on track as quickly as possible and you will soon see the benefits.