The 7 best ways to start saving money

Each year, 75% of us can expect an unforeseen large expense.

That expense might be a bill, a car MOT or breakdown cost – perhaps something around the house will need replacing. The possibilities are infinite – but sadly, your money is not.

With that in mind, we’ve put together our top 7 ways to start or build your savings – with a few that you’ll find surprisingly easy…

  1. Do you need those channels?!

Modern TV comes in a variety of shapes and packages – and the truth is, very few of us use even 10% of what we have access to.

Your TV costs might be something you don’t really notice each month – £7.99 for Netflix – an extra £8 for some sport on Sky… but it adds up.

Why not do a ‘TV audit’ – note the channels that you actually watch and compare them to the packages that are available to you. What you’re likely to find is that you’re paying £10-£20 extra for channels that you only use once a week.

Weigh up whether it’s worth it – and if you decide to ditch a service or package, set a direct debit up that puts that money into your savings. It might not be much, but an extra £200 or so throughout the year can be enough to take some pressure of when you need it.

  1. Go fixed rate while you can

There are indications that the base rate will see increases as the UK takes further steps toward leaving the EU – so now might be the time to jump on fixed rate mortgages while that rate is still nice and low.

Of course, this isn’t going to put money in your pocket – but if you take advantage now, you might be avoiding a hike in your payment should the base rate increase.

If this does happen, why not start putting the difference you would have been paying into a savings account – that means that your extra funds are accessible in times of emergency, rather than just disappearing into your lender’s coffers…

  1. Set a challenge

You can work out exactly how much you spend on food, drink, leisure and other variable outgoings each month quite easily – especially if you’re happy to scroll back through some online banking screens.

When you’ve got an average figure why not challenge yourself to reduce it by say 20%?

Half the battle with these costs is that we don’t know how much they are – so calculating the actual amount will shock you. A bit of simple budgeting will see you able to work out what a weekly cost should be.

If you’re careful and can save that 20% – why not stash it in a savings account? You’ll quickly see the money go up and it’s unlikely you’ll feel a huge squeeze.

  1. Coupon and save!

Coupons are tricky – there’s a good marketing ploy being used here, but as long as you know about it, you can save yourself some cash.

The ploy is this – coupons get people through the door when they wouldn’t normally. So, you could stay at home and have a normal meal that costs £15 in ingredients – but hang on a second, you’ve got a coupon for 2-4-1 pizzas at a restaurant here – so why not have a treat.

When the pizza bill comes to £30 you might feel like you’ve had a bargain, but actually, you’ve spent £15 more than you would have done without the coupon – and the restaurant’s got £30 it wouldn’t have got without it.

So, the key is to only use coupons on things you would be buying anyway. It takes a bit of will-power not to cave in to the lovely offers, but you’ll be rewarded when you look at your savings balance.

  1. Sell your old stuff

It used to be that using sites like eBay represented a bit of a challenge – especially if it was someone in Finland that ended up buying your fish tank.

But now, we’ve got local selling groups as far as the eye can see on social media. Sign up, take some quick snaps of your stuff, stick a price on it – and you’ll virtually always have it sold quick-sharp.

Don’t assume people don’t want your stuff. Even if it’s a bit beaten or bruised, there’s likely to be someone who’s got little or no money starting out in their own place.

Perhaps you’ll make a fortune, perhaps you’ll only make a few pounds – either way, stick that money in a savings account and it’s 100% profit vs. giving it away or throwing it in the tip.

  1. Buy people’s old stuff

On the flip side of tip number 5 – if you’re in the market for something that would have a hefty price tag – why not consider looking for it pre-owned?

Selling sites have everything from designer dresses to power tools that can be bought at a fraction of the original price. You might save yourself a couple of pounds on a kitchen utensil – or hundreds of pounds on a big piece of furniture – so why not put away anything that you do save, you can keep it for a luxury item further down the line, or just as a buffer zone in more lean times?

  1. Assess your debt

Although there have been some regulation changes in the past few years, there’s still a chance that you’re not handling your debt in the most money efficient way.

Think about a credit card. You might think that paying back a minimum amount is the most frugal move, but in reality, it’s highly likely you’re costing yourself more money in the long term.

Talk to the people you owe money to, it might be that upping your repayment slightly now will clear your debt far more quickly – or even reduce the overall amount you’re paying back. Okay, adding a few pounds to what you owe now isn’t going to put money in your savings account – but if you’re clear of niggling debt sooner, the quicker you can start saving for a rainy day.

 

Investing Your Tax Refund

When working, it can be annoying how much tax we pay. There can also be times when we’ve paid too much tax. This could be due to a miscalculation on our tax return, or because we’ve been paying tax on the incorrect tax code.

Fortunately, we can recoup our less via tax refund, which is either sent automatically, or because we’ve made a request. Either way, we can find ourselves with a payment we weren’t expecting. Initially, we can be tempted to spend the money on a few treats, but there those who like to ensure that they’re money is working in the best way for them.

Depending on your current financial standing, there can be several ways to invest your tax refund that will put you in a better financial position moving forward. The following is an example of what your tax refund can be used for.

Pay off Debts with High Interest

When paying off loans and credit cards, it can be easy to forget about the interest rates because we’re only paying a monthly amount. However, if we do our sums, it can mean that we’re paying a lot of interest. Therefore, using our tax refund to pay off any existing debt can be a good move. There can be fees for doing this but often, these fees will still be lower than the interest you’re currently paying.

Fund Your Children’s Education

One of the main worries parents can have is working out how they will meet the financial commitments of their children’s education. In the early stages of a child’s life, it’s not unusual for such concerns to be put on the backburner. But sooner than you know, you’re in a position where your financial situation needs some serious adjustment.

Evidently, tax refunds can vary in amounts, but it’s safe to say that any amount you’re able to commit to your children’s financial future in advance is only going to benefit you in the long run. The reason why so parents find the ordeal stressful is due to them having to find a large amount of money in a short amount of time. Having an amount already stored away, regardless of how small, can only help reduce the stress moving forward.

Use the Refund Towards Your Retirement

Saving towards our retirement is hard nowadays, especially if we’re starting our funds later. Depending on when you’re looking to retire, there can be many changes you need to make to ensure you have enough. For example, there may be instances where you need to take on another job to ensure you can retire at the age you want.

However, if we’re able to contribute a large amount to our retirement fund early on, then the whole process becomes much easier.

Build Up Some Emergency Savings

When the unexpected happens, it’s not unusual for us to apply for a load, or use our credit card. While there are all viable means of funding, they do come at a cost in most instances. Using our refund towards an emergency savings fund means we’ve always got that peace of mind that is something should go wrong, we have instant access to funds.

Increase Your Insurance Premiums

While we should always look to have the right kind of insurance in place, complete peace-of-mind can be costly. As such, there is always an element of risk when it comes to the loss of our cherished possessions. A tax refund can be used towards your premiums to ensure that all bases are covered should the worst-case scenario occur. It also means that you’re not struggling financially when it comes to replacing items in the home.

Open an ISA

There are many savings accounts available to us, and in most instances, it makes sense to opt for an account that offers attractive interest rates. However, we also need to consider that our savings are taxed at the end of each financial year, at least that’s the case with a normal savings account. An ISA, also known as an individual savings account, allows you to save a set amount each year, without being subjected to tax. Depending on the account you choose, there will also be an amount of interest paid on the ISA.

The amount that could be saved in the 2017/18 tax year is £20,000, but this amount often changes each tax year. Evidently, if the amount is more than £20,000, you would need to look at other avenues for the remainder, but an ISA is a great way of making a return on your cash, without having to pay interest.

It’s worth noting that an ISA is a long-term investment, and while you can have access to the funds in most instances, you will be at a loss in terms of interest.

Use Your Refund Towards a More Fuel-Efficient Vehicle

Depending on the type of vehicle we have, we can spend a lot on fuel. While we may look at the upfront cost when purchasing a vehicle, we don’t always consider the overall cost, which can include insurance and fuel. Similarly, there can be vehicles that can cost more upfront, but prove to be more efficient in terms of fuel usage. If you use your car for a multitude of tasks, then it can make sense to opt for something that is cost-effective.

How you choose to use your tax refund can depend on your circumstances, and there will be those who just want to go and enjoy it. However, investing the amount can mean that our money is working in the best way it can.

Stock Trading Misconceptions That Will Give You Away as an Amateur

So here you are, making your first trades in your path to becoming a Trader. You’re starting to get a hold of the lingo, and you’re raring to become an overnight sensation. But, what should you know before you start? Is trading all it appears to be? Here is a list of tips compiled from a number of veterans in the biz, absorb them and soon enough you’ll be a trading pro.

  1. A Hot Stock = Good

The first misconception that amateur’s quickly learn isn’t true is that a hot stock isn’t always the best stock to invest in. No investment is guaranteed, and just because something is doing well and has a great reputation, doesn’t mean it is a good idea to invest in it.

A lot of stocks in this position are actually overvalued. The hype has gotten ahead of it, and now you are paying way too much for what it is worth. Hopefully, if you’ve made this mistake you shouldn’t lose a huge amount when the value corrects itself, but you aren’t about to make the fortune you were expecting.

This is the most important lesson you will learn: you should be investing for the long term, not the glamour. This means, it is not actually the end of the world if you have invested in overvalued stock. You shouldn’t immediately sell when you realize your mistake – stay in for the long-haul and you are likely to make some money anyway, whether it be in a year, or a decade.

  1. A Bad Market = Bad

The other side of this coin, is the belief that a bad market means a bad investment. A stock that is doing badly, is not necessarily a bad stock to buy. Many companies go through short-term blips, sometimes made worse by people panic-selling.

The most important thing to do, is to do your research. Find out if it has stable fundamentals – this is their long-term qualitative and quantitative information, such as revenue, assets, liabilities and growth – and find out the reason for the blip. Using this information, you should be able to ascertain whether the problem with the stock is systemic, and thus likely to lead to all-out failure, or a short-term problem.

If it is a short-term problem, think of the low-stock like a sale. But, like in all sales, don’t go crazy and spend more money than you would have if there weren’t a sale. Just look at it as good value-for-money.

Similarly, if your stock is doing badly, research why this is before you panic-sell at a loss.

  1. Hiring a Broker = Good

Hiring a Broker to work for you sounds like a great thing to do. It seems like you are hiring an expert who will make you lots of money, without you having to lift a finger! But, unfortunately, it is not that simple.

Despite what many people pretend, the truth is no one can predict stocks. No one is going to make you a millionaire, no matter how much experience they have. If they could, they wouldn’t need to be charging you to make themselves money.

The truth is, most of the money that is made in the industry is made by people selling their advice, ideas and experience, rather than in actual trades. As such, a broker is not that likely to operate in your best interest. They make money every time you trade, but you pay the fees. This encourages them to buy and sell very frequently to make them the most money, rather than invest with a long-term frame of mind.

If you want help, which is understandable, a fee-only financial planner is a better option. They charge by the hour to give you advice. As such, their advice and actions are likely to be unbiased, as their fee is not tied to any particular action. They also have the motivation to get it right, so that you will return to seek advice again. Over time, you can build up quite a healthy, trusting relationship between yourself and your financial planner.

  1. Insider Tips = Good

The first time you think you have a great insider tip, you’ll feel like you’re indestructible. But watch out, similar to hiring a broker, the vast number of insider tips are absolute rubbish.

Generally, anyone promising you any specific results when they try to sell you advice, is talking rubbish. This is because, if they were able to guarantee anything, they would not need to be selling their tips – they would be millionaires already.

It is possible that a genuinely close friend who you trust, and who is telling you something for free, may have a good tip. But always ask yourself: where is it coming from? Are they telling you something they heard as a mere rumor? Or are they telling you something that they know as an absolute fact that no one else knows?

Remember: the best ‘tips’ would actually be pretty illegal somewhere along the line. It would require somebody trusted within a company revealing some pretty sensitive information, and this does not happen very often, and not on such a level that it spreads to an amateur trader.

  1. Your Stock Doing Well = Money Made

Last of all, stop staying ‘I made X amount today’ when it is just a simple portfolio or stock which increased in value. It is a dead giveaway that you are an amateur, and that you don’t understand how stocks work.

You only make money if you sell. If your stock has made a huge amount in one day, feel free to sell if you wish. But, you should consider that you could be missing out on future gains. Stock going up a large amount in one day, is often an indicator of great long-term growth on the horizon. You could make a one-off $1000, or you could make thousands in a year, or even tens of thousands in a decade. Compound interest over a decade, will make you a lot more than one good day. The amount your portfolio has made in one particular day is never really that relevant.

Ultimately: Don’t Make It All about Risk

There is one cliché that holds true: You can lose it all in one bad decision.

There is a romantic view of stock trading that it is all ‘Wolf of Wall Street’ and about making a lot of money fast. But professional traders know how necessary it is to have rules and caution.

One such rule, for example, is the 10% rule. Never use more than 10% of your portfolio for personal trading – this means put over 90% into low cost index funds, and then ‘play around’ with less than 10%. Some would advise less than 5%.

The best advice is to set up your own rules, and stick to them. Rules such as: don’t impulse buy, or panic sell. Stock Trading is essentially high-stakes gambling, and, like all professional gamblers know, never spend anything you weren’t prepared to lose.

Enter into it for the long-haul rather than short-term, high-risk pay offs, and you should be fine.

Ways To Improve Your Finances

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Organize your finances because this will save you time, effort and energy. Having to think of strategies for the improvement of your finances is one thing that you should keep up. You will never know what will be the outcome of your future, but as long as you are doing things to assure that you can bring a brighter tomorrow not only for yourself but also to your future generation to come. Increasing the foundation of your finances is a big decision that you’ll need to think more than just once. Most asked question is how you’re going to achieve it?

Financial advisers

You can always gain from your friends or family who have an experience regarding personal finances, but is they enough for you to learn more about increasing your wealth? Considering financial advisers are the best way for you to seek consultation because they can tackle to you a complete and thorough discussion as to how you’re going to start saving and perhaps if you are opting to enter into the investment world. Their knowledge can bring you to a horizon of financial options that you can choose. You can as well assess yourself with the type of investor you can be.

Here are the following ways that you can improve your finances.

1. Track and Monitor the things that you are spending- being aware of your daily, weekly and monthly expenses is important. This will give you a valued lesson by comparing your expenses from the previous days. In this way, you can identify your needs from your wants. Keep a tracking record perhaps by writing it down in a notebook, or you can do a bookkeeping with a use of software.

2. Paying yourself first- this a kind of method wherein most people finds it effective for them to save their money and at the same time, improves their wealth. For instance, you can spend things that you need before paying all of your bills and then set aside the money.

3. Always set aside emergency savings- you will never know what things can happen. So for this matter, you must start saving for an SOS savings so that you are ready no matter life will bring you. Stashing for at least three months is the best way that you can use it if there are any means of emergency cases.

4. Ensuring regular bills- to avoid any means of overspending your money, having to automate your bills in such a manner that your money will go directly to what you have set aside for the kind of bills that you usually pay such home loans, car loans. If you are doing this, you are guaranteed that you can save money and even increase your loans.

5. Getting rid of your existing house cards- an example is your credit card and another stash of cards that can lead you to debt. Cutting these will take out the thorn that you have been carrying. You will realize that it is better to have no debts than to keep on swiping your credit cards with things that you do not necessarily need.

6. Receipts- having to take advantage of technology gives you the opportunity to experience lesser hassle compared to keeping receipts in your wallets or staple wiring it in your notebook. Digitizing your receipts is preferred and a keeper compared to losing important receipts that you have misplaced.

There are many ways that you can achieve a personal finance goal, as long as you guided with a financial adviser you will surely have a brighter future.