Planning for the Year Ahead

Last month we talked about getting to grips with your income and expenditure so that you can set some financial goals for 2017. This month we are focusing on planning for the year ahead.

 

What is Important to You?

 

Everyone has one thing that is most important to them and that seems to take priority over everything else. Sometimes this can be family, money or career. Ask yourself that question – what is most important to me? When you know what’s most important to you, planning for the year ahead is easier.

 

Prioritise when Planning for the Year Ahead

 

We will all have several things that we want to plan for in a year but be realistic. There is no point in thinking you want to have a holiday, move house, buy a new car, change jobs and go visit the relatives in Australia! That’s just too much to plan for in terms of managing your finances. Pick just two or three things you would like to plan for this year and work on those. You can start saving for each thing, adding more to the savings pot for the most expensive.

 

Saving vs Borrowing

 

Sometimes it might be necessary to borrow as well as save. When planning for the year ahead, figure out how much you will need to save each week or month and then work towards it.

 

If you find that there is no way you can save the whole amount, you might want to look into borrowing too. Talk to us here at Nottingham Credit Union about how we can help. Saving and borrowing at the same time means you become better overall at managing your money.

 

Don’t Give Up!

 

Things don’t always go according to plan. Sometimes you might allocate yourself £25 a week to save but something unexpected pops up that means you simply cannot save for that week. Don’t give up, you can continue on the week after, or add more to your savings pot another week when you have more money for example.

 

Live

 

Most of all remember we only get one life and it is meant for living. Try to get the most out of your budget and your time so that you are ultimately spending more time with your family and what is most important to you.

 

Categories: BLOG.

How to change your thoughts around money to be a better saver

 

Have you ever heard people say, or said it to yourself, that you’ll start saving when you have more money?

Money Mindset

Although saving is very much an action and something we actually do, what must take place first is having the mindset to save. It is easier to save up for something and am sure you have done it – like saving for a holiday or a new car, new furniture or appliances or for Christmas, but saving regularly just for saving is one of the best things you can do. Not only do you give yourself financial security; having money to fall back on if you need it, but you start to manage your money better too. When you get the balance right between saving and borrowing you will find that your financial situation just seems to improve!

Money is just Paper

If you think about money itself, it’s just paper. Yes it has a value in terms of what the Bank of England says that paper is worth, but if you just take a bank note at the end of the day it is just paper.

What makes money so hard or easy to come by is actually not what we do for it, that comes after, but more about how we think about it and you’ll be surprised what we actually think about ourselves and how much value we place on ourselves is actually reflected in the amount of money we have on a regular basis.

This might all seem difficult to understand, so let’s just take it step by step and explain what we mean by that.

Value

The value of anything really is what it is worth to us. Someone might think a car costing £100,000 is of great value but someone who doesn’t have a car and pays £1000 for one will place more value on that because of their need and desire around it. The same approach applies to anything and it’s an individual thing. Although everything we can buy has a monetary value i.e. a loaf of bread will cost us a £1 and so on, it is truly what something means to us that creates the value.

If you think about your own situation and just look at what money you have, take a step back from that and then think about how much value you place on yourself. Do you think you offer a lot to your job, your partner. Do you really value yourself? This can be tricky questioniing because it is hard to try and look at ourselves from the outside in like this. Try to be honest with yourself. You will find most likely that the value (what we think and feel) about ourselves is mirrored in our financial situation and how much money we do or do not have.

What’s the Answer then?

Unfortunately, we do not have a magic wand but what we do know to be true is that if you start to value yourself more you will find that you value other things around you too and your money situation starts to improve. On a day to day level start being grateful for the money you do have. Value what you do buy and what you do with your money. Be grateful for the bills you pay and for the things your money does buy and ultimately value it so much so that you actually keep some!

Value the money enough to give some to yourself by way of regular saving. It doesn’t have to break your bank, just enough to start a small pot that will build over time. You can set this up to go out weekly or monthly, depending on how you are paid. If you put this into your Nottingham Credit Union account you will find that it is easier to save because you won’t be accessing the money regularly.

Understand Value

So really we are suggesting you start to value yourself more and value the money you do have. Start to change your thoughts around money and you will find that you become a better saver!

Good luck!

Categories: BLOG.

The Basics of Budgeting

 

The basics of budgeting does not necessarily just mean cutting back but actually also about looking at what income you have coming in, what bills and other expenses you pay out and then allocating money to the various purposes.

So let’s take a closer look at the basics of budgeting and where to start.

Income

Your income is the total sum of whatever money you have coming in each week or month. That may include salary or wages, tax credit, child benefit, maintenance or other payments. It is often easier to work this out on a monthly basis, so add everything up.

Expenditure

At this point list everything that you pay out. Even things that maybe you want to stop or change, just list all the bills, payments and other money you spend each month with the name that describes the payment and the amount. Then total it up each month.

Budget

The best place to start with setting a budget is to separate each of your bills or payments – so household bills like your mortgage, rent, electricity, gas, phone and necessary household bills each month. Go through each one and look at whether you could be saving money, for example taking out a new gas or electric contract or getting a better deal on your house insurance. Once you have these figures then set a budget amount for household.

Next go to your weekly food shopping and set a monthly budget amount for groceries.

Do the same for travel and fuel and so on until you have a list of budget categories and amounts next to each. You may be able to budget for less or more depending on what is important to you.

By working through each one you can start to see where you could save money and perhaps where you could put more money. For example you might be able to save money on household bills and put more in your budget for saving.

The Basics of Budgeting

The Money Advice Service have several resources you can look at for living on a budget and the basics of budgeting.

Categories: BLOG.

How to Set Yourself Money Goals for 2017

Whether we love it or hate it, money is a necessity and the better we manage it the better we find life to be.

Setting money goals is no different to setting other goals say around losing weight, starting to exercise and eat healthier or getting a new job for example, but because we generally tend to think about money differently, we don’t always achieve our money goals. Often the thoughts we have around money affect how we behave with it – why otherwise do some people have lots of it and others don’t. Although you could say it is about how much you earn, what you do with it once you have it is what’s important – so what this means is that it wouldn’t matter how much you had if you always end up with none…it might take you longer but you would still end up in the same situation.

We have to change how we think about money before we can change how we manage it.

Setting one or two goals is better than setting lots. So although you might have lots of things you want when it comes to money, setting a couple of goals means you are more likely to achieve them than setting yourself lots and becoming overwhelmed.

Start Small!

Start small – if you haven’t been great with money in the past that doesn’t mean you can start now – and pat yourself on the back for wanting to start now and set yourself some money goals for 2017!

Like anything things start to snowball, so when you have achieved your first small money goal you will have lots of confidence to move on and set more goals. Taking actions in smaller steps are also easier to deal with – that’s why people always learn easier in smaller chunks too! We can deal with small steps but when we have much larger ones it becomes overwhelming and we can easily talk ourselves out of it.

Which Money Goals to Set

Everyone’s money goals will be different but a good goal to start with would be setting a budget. This will help you manage your money from the start and pave the way to being able to have spare money too. Really setting a budget is about looking at the income you have coming in and the expenses you have going out – just simple maths really of your Income minus your Expenditure leaving what you have left to spend or save. As well as working out what you have left, doing this exercise will also give you an opportunity to look at where your money is going. Are you in a lot of debt, do you pay money out on things that perhaps you don’t need. Setting a budget is all about this and so spending some quality time working on this is a great goal to set. The idea of a goal is really having the intention – which is truly just the commitment to wanting to make it happen and then taking the action steps to achieve it. What’s also important is setting a time limit on it, so you work towards it. Otherwise you might just keep putting it off. Writing it down also makes it seem more real and there is something more real about putting pen to paper so get yourself a little notebook or something to jot your goals and actions down in. Doesn’t need to be anything fancy, just something you write any notes or thoughts around your goals in. So our first goal might look something like this:

GOAL #1 – WORK OUT A BUDGET

Timescale – 1 month, by February 11th 2017

Actions

  1. Read through the Money Advice Service Budget Planner Guide (there is actually one here)
  2. Decide where I can make changes to the things I pay out for so that I have more money left each month
  3. Work out how much money I owe.

There may be other actions you have too but the goal is simply to achieve a budget – so you know how much you have coming in, what is going out and to where and how much you have left. You could then move on to your next goal which might be to make a plan for paying off your debt. If you have a lot of debt that might take some time – it doesn’t matter how long it takes, the fact that you are working towards it means you will achieve it. Don’t forget, you don’t have to do this alone. There are lots of organisations out there who can offer free advice and help you with paying off debt. Work out your debt in the same way that you worked out the budget by putting the overall goal, which would be to create a ‘Paying off  Debt’ and then list the actions you need to take to do that. You can also set timescales for each action. So using our example of working out a budget, you might set yourself an action step each week.

Something else that really works and this is used by people  who manage army operations so it definitely works, is to work backwards. So if your goal is to  pay off your debt you start with that goal as your end result and then work backwards. So think to yourself it is February 2018 (or when you would like that goal to be achieved by) and I have paid off my debt and then work backwards taking all the action steps you would need to take to get there – you then have a list of things to do that lead you back to now….

Remember the Hare and the Tortoise

You might have read the Aesops Fable story about the Hare and Tortoise – racing off doesn’t always mean you will finish first and in that story the tortoise won the race by plodding along. The point here is to keep moving – take small steps towards your goal but keep going forwards and you will achieve it. Once you have achieved one goal it makes it much easier to achieve another and another and before you realise it you will be one of those people that others look at and say, he/she is great at managing their money, I wish I could be like that. You have everything you need right now to start managing your money better – set the intention (the goal), write down the actions (the steps) and start taking them!

Good luck and we hope that 2017 brings lots of good things for you around money and managing it better!

Categories: BLOG.

Christmas on a Budget

Not long now! Just a couple of weeks to go and it will be Christmas! No doubt you are still running around getting last minute presents and preparing for the holidays.

 

Although Christmas is probably the most expensive time of year, you can do Christmas on a budget. We posted a few weeks ago when we talked about avoiding the Christmas spending hangover, so today we thought with just a couple of weeks left we will focus on food and entertaining!

 

Here’s our Top 5 Tips

 

Shop Around

 

When it comes to food there are always savings to be made. We have listed further down the cheapest supermarkets when it comes to Christmas dinner. As you can see there is a lot of difference, so spend the time shopping around to get the most from your budget.

 

Save Leftovers

 

Christmas leftovers are so delicious! You can make your turkey go a long way with sandwiches, stews and curries. Be creative. If you are having buffet food, again put the food in the fridge for the next event and you’ll find you won’t need to buy as much!

 

Share the Entertaining

 

If you have people coming over or if you are going to other places, share the entertaining. Ask people to bring something and if you ask enough people you might end up just having to do only one course. Everyone is always more than happy to bring something and contribute, so don’t be shy and ask!

 

Go to Supermarkets Late

 

Shopping later in the day usually means you get the best deals. Although it is going to be busy this time of year, over the Christmas period it will be quieter and there will be lots of discounts, so go later in the day or evening and pick up some bargains!

 

Keep it Simple

 

We all love Christmas but allow yourself to enjoy the experience. Don’t feel pressured into spending what you cannot afford. Often the simplest things are always the best so try to keep your Christmas dinner menu simple and the same for other buffets and entertaining. You could do a whole pot of chilli or something similar and feed a large party and it would cost you far less than putting on an elaborate spread that a lot of which may get left anyway.

 

To help you along your way, here’s the Good Housekeeping’s Top 10 supermarkets for the cheapest Christmas dinner. This is based on 8 people so if you have fewer people then it will be even less!

 

Aldi: £22.03

Lidl: £24.57

Iceland: £24.81

Tesco: £28.08

Asda: £29.68

Morrisons: £31.12

Co-op: £31.26

Sainsbury’s: £35.40

Waitrose: £40.02

Marks and Spencer: £49.90

 

Whatever you are doing this Christmas, we hope you have a wonderful and relaxing time…enjoy!

 

Categories: BLOG.

How to Avoid a Christmas Spending Hangover

Naturally, we have been talking a lot these past few weeks on affording Christmas. As we reach the middle of November we wanted to focus further on Christmas spending and so sharing some great tips on how to avoid a Christmas spending hangover.

Tip #1

Budget!

OK, so we realise that it may be a little late for that, but you can still set a budget with what you have now. You may have already started your Christmas shopping and if you have finished then please share your tips with us! If you still have much to do make a list – as Santa says, check it twice! Make a list of the gifts you still have to buy, food to get and any other Christmas expenses you know you will need to afford.

Once you have your list, put an amount next to each item. If you find that you have gone overboard don’t worry, we will get to that in a moment. Just be realistic and it is better to over budget than under.

Tip #2

Be Creative with Gifts

Even if you budgeted to spend £10 on each person, but had 20 people to buy for, that still amounts to £200 and if you have children, your budget will be much higher! When it comes to giving gifts, be creative. Making jams, mince pies, truffles, cakes and festive food can be a great way of giving a gift to someone without a massive expense.

Tip #3

Share the Entertaining

If you have people coming over, talk to them about sharing the cost of entertaining. If you have several people over you could split the food up; one person brings starters, one dessert, another drinks and so on. You’d be surprised at how much money you can save if you aren’t having to pay for everything. Don’t forget, keep leftovers for the next day. It will always get eaten and what could be better than having cold turkey sandwiches or turkey stew!

Tip #4

Be Sensible!

We are talking about money here. Although we all want to spoil our loved ones for Christmas, it is all too easy to get pulled in to buying every gadget going and spending far more than we intended. Rather than buying so many gifts, think about each person individually and what they would really like. Making the gifts more meaningful means you are less likely to buy several of them and spending this way also keeps the overall costs down.

Tip #5

Borrow Wisely

Finally, if you do find that you do not have enough for what you have budgeted to spend avoid turning to high cost lenders, like payday loans for example. Although these are attractive in promising to give you the money on the same day and low repayment amounts, they can come with unreasonably high interest rates. You don’t often realise until it is too late and your new year is bogged down with debt and mounting interest. Nottingham Credit Union offer lower interest loans, quick decisions and flexible repayment options – apply online and see how we compare.

Categories: BLOG.

Credit Score, Myths and Ways to Improve Your Credit Score

Do you know your credit score? This blog will help you understand your credit score myths and ways to improve your credit score. Even if you do understand there might be bits of useful advice in here that you can apply to help your situation further.

The main thing to know when it comes to your credit score is that even if it is quite low, there are lots of ways you can improve it.

 

What is My Credit Score?

Basically it’s a number that usually ranges somewhere from 300 (which is at the lower end of the scale up to around 850 (which is the higher end). Your credit score gives lenders an idea of what your financial situation looks like and the credit-worthiness of a person. So for example if you have a credit score of 300 that would make a lender less likely to lend you money than say if your credit score is say, 700.

 

What is the Credit Score Made Up Of? 

The score isn’t just what is taken into account, your borrowing history and other lending factors are also involved, but the credit score is a good indication as to the likelihood of getting a loan approved.

 

There are 5 main things your credit score is made up of and these are:

1. Payment History 35%

This is your previous borrowing. So if you have got into debt previously or not paid back loans, or made late payments, this will affect this area of the score.

2. Credit Available 30%

It’s funny to understand sometimes, but something that is taken into account when lending to you is actually the amount of credit you have available to you. So if you have a lot of borrowing already (i.e. if you owe money on existing loans or cards) this score would be lower and affect future borrowing.

3. Length of Credit History 15%

A lender wants to see what your borrowing history looks like, how long you have taken out loans for and how long it has taken you to pay back. Sometimes a person with no credit history finds it difficult to borrow because there is nothing to show the lender what their borrowing behaviour looks like.

4 & 5 New Credit and Credit Mix

Even if you apply for something and it doesn’t get accepted, it can still show on your credit file. Also, borrowing too much in a short space of time can affect your ability to borrow. It is advised just to borrow when you really need it, rather than taking out too many accounts. The credit mix element means the types of borrowing, so they want to see that you can handle different types of credit.

It’s useful to know that just because one lender says no, doesn’t mean another will. Different organisations have different criteria when it comes to lending and it also depends on the type of product you are choosing, the amount of credit and the repayment period.

 

Myths

It can be confusing wading through all the information; good and bad. Here are a few credit score myths – they are simply not true!

  • My credit score is affected if I live with someone who has bad debt – unless you have a joint product with them i.e. a joint loan, this does not affect your credit score.
  • There is a credit black list. Does not exist! Lenders base their criteria on a combination of things as we have outlined above.
  • Education level affects your credit score. Definitely not.
  • Paying for everything in cash builds a good credit history. Not the case at all. You need to have some financial history to show the lender that other lenders have provided you with credit in the past and that you have successfully made repayments to clear that.
  • You should have as many credit cards as possible to show you are good at paying back debts. Not at all. Be very careful with this because you could get yourself into debt taking on too much credit and it getting out of hand. There is a balance between taking on credit to show you can make repayments and things getting out of hand. It is worthwhile only ever having one credit card, unless you are able to repay them each month and clear them.
  • Credit scores don’t affect job prospects. They can do – employers are permitted to see a slightly shorter version of a person’s credit report and could consider that a person’s worthiness for a job is based on their credit history. This would probably depend on the type of job you were applying for but it can affect it.

If you aren’t sure seek independent advice.

 

Ways to Improve your Credit Score

 

Clear Bad Debts

If you have a bad credit history, work on cleaning it up. A credit reference agency is always willing to help when it comes to giving advice on your credit score. Experian and Equifax are the most commonly used by most lenders and you can usually get a 30 day free trial to access your credit file, get an idea of your credit score and what is affecting it and get some impartial advice.

If you do have bad debt, start making repayments on all the accounts. Lenders like to see that you are working to reduce your debt and over time this will improve your credit score. If you need debt advice, contact the Money Advice Service for some free and impartial advice. Be careful taking advice from companies who promise to consolidate your debts, unless you are sure that this is going to make your repayments much less and work for you over time. The government agencies are always the best ones to approach for debt advice.

Contact the company who you have the debt with. Some companies are willing to make arrangements with you to pay a lesser amount each month for a while or even offer you a chance to pay off a lump sum amount that is less than the debt to clear it. Try to open communication with them and be honest and up front but be realistic about what you can afford to pay. Always make sure that you cover your rent/mortgage, bills and living expenses first.

Over time making regular payments and reducing your debts will work to improve your credit score.

 

Avoid Opening more than One Credit Account at a Time

As mentioned in the list of what your credit score is made up of, opening too many credit accounts or applying for too many at once can affect your credit score. Only borrow when you need to.

 

Keep your Payments Up to Date

Lenders will update their systems usually every month and so the credit reference agency will update your credit file accordingly. If you keep your payments up to date your credit file and your credit score will reflect this. If you start falling behind with payments and missing payments this will start to affect your credit score.

 

Make Payments by Direct Debit

Making payments by direct debit can help improve your credit score, particularly on your credit accounts.

 

Electoral Register

Being able to show you legally exist helps! Sounds funny but get yourself on the electoral register if you aren’t already. This simply shows that you are registered living at a property within a local area. This contributes positively on your credit score.

 

Check your Credit File Regularly

Close any unused credit accounts if you see them on your credit file. You do this by contacting the organisation and asking for them to be closed. In doing this they are not updated with the credit reference agency and are removed from your credit file. The other reason to check your credit file is to ensure that there is no activity on there that you have not carried out yourself. If you do see something suspicious on your credit file, contact the credit reference agency immediately.

 

Start Saving

Showing that you can afford to put money aside and save can help. Not only do you need to borrow less because you will have savings to fall back on, but you are creating a better financial picture too for future borrowing.

 

Credit Score Myths and Ways to Improve your Credit Score – for more advice visit:

Noddle www.noddle.co.uk

Experian www.experian.co.uk

Equifax www.equifax.co.uk

Categories: BLOG.

Save Money By Making Things Yourself

 

There are lots of ways you can save money by making things yourself. Not only are you freeing up cash to spend on something else or put away and save for next Christmas or a holiday, but most of these things are actually better for you or give you some satisfaction from having made them yourself.

Try these and do a bit of research online to see if there are other things you might save money by making it yourself.

Food

Food is definitely one of those things that is actually better for you if you make it yourself. Homemade food will contain no ‘E’ numbers, MSG’s or food additives that are not at all good for you. Making food yourself is enjoyable and will save you money. What a great thing to teach your kids too!

Try these for starters:

  • Bread
  • Pesto
  • Dips
  • Granola
  • Flapjacks
  • Jam
  • Cakes
  • Puddings
  • Salad Dressing

Cleaning & Laundry Products

Did you know that you can make your own cleaning and laundry products? Now we are not suggesting at all that you go mix chemicals together – definitely NOT! What we are suggesting is that you use more natural ingredients to make them yourself. It is amazing how many things you can make yourself. Not only are these kinder to the environment because they don’t use chemicals but they will save you a lot of money too! We have done the hard work for you and Googled some ideas and links to them to try:

Fake Febreze

Natural Bleach Alternative

Homemade Liquid Dish Soap

Natural Fabric Softener

Homehade Beeswax Furniture Polish

Natural Disinfectant Spray

Non Toxic Glass Cleaner

Beauty Products

We all know how expensive beauty products can be, not to mention the fact that many are also tested on animals and contained harsh ingredients. What better way to save money than making your own beauty products. Kind all round! We’ve researched some great ideas and ways to make them for you too.

Lavender Bath Salts

Homemade Foundation

Homemade Blusher

Natural Eyeliner

Homemade Body Wash

Why not do your own research, there are literally stacks of websites and bloggers out there who offer free ideas, tips and recipes on how to save money by making it yourself.

Categories: BLOG.

Half Term On A Budget: 10 Fun Things to Do with Your Kids

If you’ve got kids you don’t need anyone to tell you that they are expensive…but worth it!

Half term is generally a mixture of joy and dread. It’s an excuse to take time out of work or spend more time doing things with the kids, but at the same time it can often be dampened by the fact that holidays and days out can get expensive. We can all relate to how frustrating it can be that holiday companies hike up their prices over half term. Unfortunately, we can’t change that, but we can you thinking about what you can do. Here’s our half term on a budget 10 fun things to do with your kids:

 

1. Great Deals!

At the beginning of October, The Mirror newspaper published deals on cheap half term family days out from 35% off concert tickets to see pop group, Fifth Harmony, to 2 for 1 park access to Disneyland Paris! Click here for the great deals.

 

2. 10 Things under £10

Rather than just giving you one suggestion for something to do for under a tenner, we have done some research and found 10 things for you to do with your kids at half term for under £10. Click here for details.

 

3. Head for the Kitchen!

Get them in the kitchen! Yes, we know it is going to be messy but if you can become one with that for a few hours, it will be fun. There’s lots you could do and why not plan the time out with them as well to make it more fun. You could try baking rice crispie chocolate cakes or having high tea with sandwiches and cakes. Spend an hour or so researching some ideas and get them involved. Roll up your sleeves and be prepared to get stuck in!

 

4. Volunteering

Volunteering. This is a great way to get your kids to think about others. There are lots of ideas but you could try a visit to a local residential home to spend some time talking to elderly residents or maybe popping in to your local children’s home and spending some time with kids there. Volunteering does come with some restrictions in terms of what is allowed and what isn’t for safety purposes but there will definitely be opportunities in your area – even if it is asking friends and family if you can help with dog walking or grocery shopping.

 

5. Write a Story

Write a story! Get their imaginations running wild. Although they may roll their eyes because they are actually off school this week it is a great way of doing something together. You could suggest they write a different ending for an existing fairytale or if there are a few of you write chain stories where one person writes a paragraph and the next person carries it on and so on. When the final person has written their story you read the whole thing through. It can be quite entertaining.

 

6. Go for Dessert

If your budget won’t stretch to dinner or lunch out you could just book in somewhere nice for dessert. Most restaurants have ice cream sundaes for less than £5 and you could book in and arrange balloons to make it extra special.

 

7. Make a Treasure Hunt

Always fun. Come up with a whole list of odd items for them to find. If they are older you could also add clues for them to find the next thing and you might enlist the help of an older child in creating it with you. The prize doesn’t have to be anything extravagant, maybe chocolate or even that they get to choose the activity for the following day!

 

 8. Visit the Seaside

Although we are now into October and it is definitely chilly, wrap up warm and head off to your closest beach. For some that might be a distance but if you can’t get there by car there are plenty of other inexpensive ways you can travel – try coach or train for starters or maybe join forces with another family who do have a car and you can go together. Walking along the beach, exploring shells and rock pools can soon pass the day away without having to step foot in an arcade!

 

9. Walking

Not all kids enjoy walking but there are lots of places in and around Nottingham where there are activities in the midst of forest walks. If you don’t fancy somewhere conventional, why not make it into a mystery walk and just head off and see where it takes you. You could take a picnic and provided you have some idea where you are, you could easily spend half a day wandering around and exploring in and around your local area. Be sure to make sure you keep to public paths to avoid getting into too much trouble with farmers!

 

10. Get Creative!

Finally, be creative. If you can’t head off on holiday or take a day out by the beach, just think outside the box a bit. Get the kids involved with ideas for things you could do. You’ll be surprised what a little brainstorming can do. Most of all try to do things you don’t usually do, relax, have fun and enjoy!

Categories: BLOG.

Financial Mistakes People Make at Different Ages

Although we can make mistakes around money at any age there are specific financial mistakes people make at different ages, generally through their 20’s, 30’s and 40’s. We thought you might find it a useful read.

Money Mistakes in 20’S

Spending too Much on Unnecessary Extras

When we are young it can be easy to get carried out with the latest gadget or high end luxury products that we really can’t afford but must have. Whilst we are all for treating yourself, it’s important to sit down and decide whether you can really afford the high expense.

Not Having Emergency Savings

This carries on from the first point. If you are spending too much on high priced goods, there may not be enough left over for saving. Sometimes even if there is, people in their 20’s don’t often see the benefit of saving, much preferring to be in the moment with their money. Having an emergency pot of savings means that whatever comes your way, you have money put aside should you need it. Putting away just a small amount each week or month will help build up an emergency savings fund.

Moving Out Too Soon

If we had a pot of money for every time we have heard, ‘when I am 18…’ well we would be quite wealthy by now. When people hit late teens and early twenties they often decide it’s time to move out, even if they can’t really afford it. Living with parents isn’t cool and so people in their twenties often move out into accommodation with others or on their own that is way out of their affordability range. It can also be difficult to manage balancing bills and other household payments. Whilst living at home might not be the best solution, it certainly can be financially for a while. Even if you are paying money towards the household, you will have much more left over for yourself and to save than if you were to move out and be fully responsible for bills.

Money Mistakes in 30’s

Buying a Bigger House or Car than you can Afford

Keeping up with the Jones’ is something that is more common in the 30s than any other age. Having survived the 20s it can often seem like the right thing to do, upgrading our house or car. This seems more common when we have had children and the house seems to be overflowing with ‘stuff’. Even those who haven’t had children find that in their 30s there is a burning desire to just go bigger. Chances are if you have had your existing home for a while you will have built up some equity in it. Rather than being hasty and moving to somewhere bigger, why not think of other ways you can create more space. It is surprising just how much clutter we acquire over the years. Still want to move? Set yourself a 3 or 5 year plan and work on saving some more money towards it. That way when you do move you will have some money behind you. Similarly, with cars it is easy to get something more luxurious and beyond what you could truly afford if you bought it outright. Lease and finance car options mean that there is always a better option available, but be sure you can afford the maintenance and that your mileage is covered. Sometimes buying a car yourself that is perhaps less of a luxury will be better in the long term. When you own the car yourself you also have the value in that if you do wish to change it. Leasing or financing often means you are paying for something you will never own and may end up having a bill at the end of it. Be sure to read all the fine print before you commit to anything.

Being in Debt

Once you get into having your own place, getting married and having children it can be easy to borrow money. Although having access to affordable credit is part of good money management, it doesn’t mean you have to run up debt beyond what you can afford to pay back. It is always better to keep borrowing to a minimum and pay things off before taking something else on. If you do find yourself in debt (at any age!) don’t bury your head in the sand, it will only make the situation worse. Seek help and advice because there is always a way to work it out.

Assuming You’ll Have Money in the Future

This will depend on the type of person you are and how you think about money generally. We can’t always assume we will have money in the future and so it is always worth having something set up for a rainy day and longer term for retirement. There are lots of options that you can look into and often employers provide a pension plan you can join.

Money Mistakes in 40’s

Not Having Enough Cash Flow

A lack of cash flow means that if the washing machine breaks down or the fridge breaks you might seek a loan from a high cost lender, just to get cash quick. Sometimes it doesn’t even need to be an emergency that means borrowing extra either. If you are living beyond your means or not having enough cash to cover day to day expenses, it might be time to assess your finances and give them a good MOT! Having enough cash flow means being able to save a pot of money for when you need it too. There are lots of budgeting tools online and ways you can cut back on spending.

Dipping into Savings

Sometimes we save for short term things like holidays or cars but it is always a good idea to have a pot of money saved for long term. This isn’t about paying for emergencies, but just saving money so you have something put by for later in life or when you are unable to work as much as perhaps you do now. Dipping into these savings can mean just a bit here and there with the promise of putting it back, but most often times we don’t. Try to avoid dipping into your savings and instead having a pot of money that you just use for short term things. If your longer term savings are in a higher interest account you are also losing money by taking it out!

Mid Life Crisis

Lots of people have them! It’s not always about having a sporty car (although sometimes it is). Forties do funny things to people when it comes to money. Whether that is booking an extravagant cruise, going crazy with buying a bigger home, redoing the house or a whole host of other expensive treats. Question your spending when you are in your forties. Although you are some way off to being at retirement age, it is worth being wise with your money. If you are spending extravagantly make sure you can afford it first and rather than making hasty decisions, give yourself time to think about them.

Financial Mistakes People Make at Different Ages

Truly we could apply many of these money mistakes to any age. If any seem relevant to you, take some time to figure out what you have coming in, going out and what you can save. Work out a savings plan, so not just short term saving but an emergency fund and long term saving too. If you get a pot of money built up you might also want to get advice on investing.

Whatever your financial situation just know there are always options for you both in saving and borrowing and lots of good advice out there to help you.

 

Categories: BLOG.