Categories
Loans

How to Choose Which Loan to Repay First

If you owe money to different lenders then you might be in a position to be able to repay some of them or overpay some of them. If this is the case then it is a great feeling to know that you will be able to get into a position where you will be more in control of your money. However, you will need to decide which loan you are going to repay first. This might seem simple but there are actually quite a few things you should consider to the different approaches that you can take.

The one that is most costly

The option that will gain you the most financially will be to pay off the costliest one first. You might need to do some calculations to work this out. It could be a case of just comparing the interest rates, but do make sure that you do not have other charges as well. You may think that the one with the biggest repayment amounts each month is the dearest, but actually it is the one that has the most charges and interest. It is likely that a mortgage will have a relatively low interest rate but the repayments will be big and something like an overdraft or credit card might have a higher interest rate but the repayments will be small. Therefore, make sure that you are looking at the one that has the highest rates, rather than the one that you pay out the most for each month.

The smallest one

Some people like to get rid of the smallest debt first. This is because they get a good feeling knowing that a loan is gone. So, if they can pay it off and get rid of it they get a psychological boost. This will motivate them to go on and repay the next one. Starting with a bigger one might seem very daunting and they could wonder whether they will ever be able to pay that one off so they want a small target to start with.

The most annoying/stressful one

Sometimes we have a particular loan that really annoys us or stresses us out for some reason. This could be for any reason at all but the idea of getting rid of it could be really motivating. We might feel that we will be prepared to work really hard if we can get rid of that loan and then this might get us into new habits which we can use to help us to repay the other loans that we have afterwards.

The biggest one

You may feel most motivated to repay the largest loan first. You might feel that if you can clear this big debt then you will feel so much freer and better knowing that you have got rid of it. Therefore, this might motivate you more than anything else.

It is good to think about what might be most motivating for you. Start by noting down what loans you have and how much you owe on each and what they cost you. Then you will be able to decide properly which you feel you want to repay first. You will know what might motivate you the most and so you can aim for that. It is a good idea to think about what will keep you going. Do remember though, that you can switch between loans, so if you start to repay one and then decide you would rather do another then you can swap between them. Do watch out for early redemption fees though as some lenders will charge a fee if you want to repay their loans early and you need to work out whether it is worth it.

Categories
Spending

How to Treat Yourself Without Overspending

Often, we like to be able to treat ourselves to a few things. Whether it is a holiday, a trip out, a meal in a restaurant, a bar of chocolate or a new phone, there are lots of ways that we can treat ourselves. We often think that because we have worked hard for our money, then we deserve to treat ourselves to something as a reward for that. However, when we treat ourselves it is really easy to spend more money than we can afford, so we need to be careful.

Set a budget

It can be a good idea to start by setting yourself a budget. You need to think about what you can afford to spend on the treat. You may have to work this out and calculate how much you can afford. You can do this by looking at some bank statements and looking at the money you have coming in and the money you spend on essentials and taking one from the other. This will leave you the amount of money you can spend of treats. You will need to decide whether you want to use all of that money, whether it needs to be shared between family members or whether you want to put some of it into a savings account. Then you will know how much you can spend on treats for yourself.

Save up

You may find that once you have done this, that the amount of money that you have to spend is very little. This could mean that you will not be able to afford that many treats or only something very small. However. You can save your money up from month to month until you have enough to afford what you want. It can take a while, but you appreciate items more if you have to save up for them. It can feel really satisfying knowing that you have worked hard to get something and you will enjoy it much more. You will also be more careful about what you buy and you will want to make sure that you only buy items that you really want as it is such an effort to get them.

Decide if it is worth it

While you are saving up or before you buy a cheaper item you will need to decide if it is worth it. Often, we will just buy things without a second thought, because we are not thinking about the budget. If we do have a strict budget then we will not be able to buy as much. Therefore, we will need to think more carefully about all of the purchases that we are making. We will need to make sure that we really think that it will be worth getting. Considering how much pleasure will we get out of something is a good way to judge a purchase. Also perhaps consider whether you already have something similar that will work if you are purchasing an item.

This can feel restrictive, but if the alternative is that you cannot treat yourself at all, then it is better than nothing. It can feel touch at times, when we have a shortage of money and being able to get ourselves a treat every so often, even if it is something small, will make a big difference. So think about what sorts of things you might like and then start coming up with a plan of how you will get the money together to get it. It might take a while, but you will appreciate it even more for the effort that you had to put in to get it.

Categories
Save Money

How to Save up For Christmas

If we have an expensive occasion, such as Christmas, to save up for, we may feel rather daunted. It can be hard knowing where to start and what to do. However, there are steps that you can take that will help.

Set a budget

It is a good idea to start with a budget. You should be able to work out what cards, presents and gift wrap you are buying and how much you might spend. Also work out whether there will be any other extras that you will buy such as decorations, extra food and drink, trips or holidays. Consider what you might normally buy and what you are likely to buy and then find out the costs of all of this. You may not normally add up how much extra you spend, but you need to do this. Then you will know how much you need to save up. It might be that you want to limit it to a certain amount and you set the budget and you will just have to manage but you may want to add it all up so that you do not go without anything and then come up with a way to get the money.

Save a certain amount each month

It can be wise to save some money up each month. This will spread the cost and mean that you will not need to worry about where to get the money from when it gets closer to Christmas. If possible it is best to spread the cost through the whole year, but this may not be possible if there is less than a year to go before the big day. It is worth calculating how much you will be able to afford to save each month and then set up a monthly transfer to move that money into your savings account just after you get paid each month. If you do this you will know that the money will be saved and you should have enough money available to be able to do it.

Cut spending elsewhere

You may need to cut spending in other areas to be able to save up enough. It is easier to cut spending from luxuries than form essentials normally. Although we should always compare prices to make sure that we are not spending more than necessary on everything we buy, we will find that we will not be able to go without necessities but we will be able to reduce luxuries as we do not need them. It may still not be easy to do this, but it may be something that you have to be prepared to do if you want to make it easier to manage at Christmas.

Earn some extra

Another option could be to earn some extra money. This will enable you to have some extra to save, as long as you make sure that this what you use it for. It can be tempting to spend more if we are earning more though so we will need to keep in mind that we have a goal to achieve and we need to concentrate on it to make sure that we do not get distracted and end up working for longer but not having money to show for it in our savings because we have spent it.

Saving up for things is not always easy. It is worth making sure that you always keep in mind that you have a goal and that you need to work hard to achieve it. Imagine how much better you will feel when you start buying things for Christmas and you know that you have the money all there to be able to buy the things that you want.

Categories
Credit

Should I Use Catalogue Credit?

If we buy from a catalogue, whether online or through a printed catalogue, we will sometimes be offered the option of getting some credit. This means that we may not have to spend all of the money at once, but we could pay it over a series of months or weeks. This has advantages and disadvantages and it is worth considering these before you decide whether it is the right thing for you to do.

Cost

There are a few cost factors that you need to consider. The first is that you will often find that if you spread the payments that you will have to pay interest. This means that you will pay extra for the items compared to how much you would pay if you bought it outright. It is important to compare the costs and work out whether you think that it is worth paying that extra money. You may find that some prices are no different, so if you pay it outright or over a series of months the cost is the same. You may decide that this means that you will not need to consider the cost. However, the cost of the credit will be incorporated into all of the prices. This means that you could still end up paying too much, so make sure that you compare the prices of what you are thinking of buying with what other retailers are charging, so that you can find out whether you are paying more than necessary.

If you do decide to take the credit option, then it is really important to make sure that you are totally aware of how much you will be expected to pay. You need to think about how much you will have to pay each month or week and whether that is an amount that you will be able to afford. Do not take a risk by just assuming that you will be fine, but make sure that you actually work it out. Calculate how much money you normally have left at the end of the month and then you will know whether there will be enough to cover these extra costs.

Convenience

Using credit means that we can often buy something that we would not otherwise be able to afford. Lots of people use this all the time for things like mortgages or student loans which they would just not be able to afford otherwise. However, borrowing money will always have a cost. You have to pay interest and possibly other charges or fess as well. This means that we end up paying more for the item (not always in the case of student loans but they are an exception) and it is worth making sure that we are happy with paying that extra for the convenience of getting the item sooner. It is probably the case that for some items we will be able to wait and save up for the item but for others we will need it right away and so this might be the only way we can afford to buy it.

It is therefore important to make sure that you make a careful decision. There is no doubt that credit can be really at times, but it is also costly. Therefore, we should have a think and decide whether we think that it will provide good value for money or not. This will be an individual decision based on how much value we think that the item will give us and whether we are prepared to pay the extra for it. We should also check to see whether we can get it cheaper elsewhere and also whether, if we borrow the money in an alternative way, we could save money.

Categories
Employment

Should my Teenagers Get Jobs?

If you have teenagers in your family then you may wonder whether you should encourage them to get a job. There are pros and cons to them doing this and it is good to have a think through them before you speak to the children about it.

They can earn money

The main advantage for teenagers is that they will be able to earn some money. They will probably be keen to get as much money as they can so that they can buy all sorts of things that they want. Some might even be keen to use the money to save up perhaps towards buying a car or driving lessons or for university. This could also be an advantage for their parents. They may feel that they will no longer need to give them pocket money and they may no longer be nagged by the teenagers for money or items any more. It can therefore help everyone in the household to be better off. Some parents might also ask their children to pay a contribution towards the household out of their wages as well, although this does seem rather old fashioned and is not something most teenagers would be willing to do.

Looks good on CV

Having any sort of job can look good on a CV. Whether your child is looking to leave school and go to a sixth form college, go on to do a degree or go straight into work, they will benefit from having this work experience which could help them to cope better when they get a full time job.. It will also make them more mature as they will have to get used to being more independent and mixing with older people outside of the family. This can help them to come across better when they are having an interview as well.

Might disrupt schoolwork

There is a chance that working could disrupt their schoolwork. They may find that it takes up so much of their spare time that they fall behind with their homework and studies. They may feel tired too and find it harder to concentrate. This will not be the case with all teenagers and it will be determined by how much energy they generally have and how easy they find their schoolwork. Some may not do much schoolwork outside of school anyway but others may do a lot. It may also depend on whether they are looking to get really high grades or whether they are not so concerned about that.  

Might put them off working

If they have a bad experience of work, it might put them off getting a job. Of course, not all jobs are the same, but they might find it hard work and decide that they do not want to work that hard. Hopefully, this will not be the case, but teenagers can find a day of work difficult as they are not used to working for such long hours and this may exhaust them.

It is therefore not an easy decision. You will know though, how well your teenager tends to cope with their schoolwork and whether they tend to be high or low in energy most of the time. You will also know how much the extra experience will help on their CV and whether you think that it will make a significant difference to their future prospects. Lastly, you will need to consider how much the money will help them out and the household, bearing in mind the fact that teenagers cannot earn a very high hourly rate so the contribution that they will be able to make could be pretty small.