To Charge or Not to Charge - The pitfalls of a Credit card
People always seek instant gratification in all things we do, from trying to lose weight to buying the latest gadget. It’s almost as if the child within us takes control and flips the logic switch to off the instant we see that latest gadget or clothing that we absolutely must have or the world will come to an end. You can actually visualize the kid in you stomping his foot screaming at the top of his lungs that he wants it now!
Coffee - Can be a daily expense - Do you really need it ?
So, you whip out the credit card, hesitate for a moment as your logic tries to take over, but it’s only for a moment as the kid gets louder and louder. Then a month later when your credit card bill arrives you blanch as you realize there is absolutely no way you can cover your shopping so you will have to just pay the minimum. Or even if you can pay the full amount why should you, right? After all you can use that money to buy something else.
Yes, there is a very good reason that the financial industry makes such huge profits and pays marketers and psychologists so much. The credit card is designed purely to take advantage of the human need for instant gratification and banks know that most people will not pay off all their monthly purchases because they can’t so the interest kicks in, which is usually obscenely large.
The other thing banks rely on is people’s love of denial. In other words, no one sits down to actually work out how much that new telly is going to cost them if they pay interest on it for five years. Let’s see, if that brand new, sparkling TV that is screaming your name costs £500, after 5 years at a rate of 17% you end up paying £750 in total. You end up paying 50% more for it at the very least, as this doesn’t cover other fees that pop up which you don’t notice.
Why not try a novel approach and cut out that Starbucks coffee you get twice a day and bring your coffee from home? That would average a minimum of £60 saved per month and there are plenty of other places where you can save a little extra cash so you can have the money to buy that TV in a few months without having to pay the bank for the “privilege” of getting it the day you see it. Who knows, you may even decide it’s not worth buying it after all because it was only an impulse at the time.
Making Savings a little easier - Savings Calculator Widget
The web is full of handy gadgets and widgets to use on your website, so its only time i shared this one with you. This savings calculator (from car insurance comparison site Confused.com) is a quick way to track how much you can save over a set period.
Simply put in the amount you wish to save, the period you wish to save over and your current interest rate and click calculate! I’ll be looking to add more widgets like this to the site over time to help with your debt management. Stay posted folks.
Savings Calculator Widget created by Confused.com
Anyone out there with good widget ideas for this site, feel free to post a comment below! Lets start 2011 with good intentions in mind..
Can more credit be a positive thing?
Bank loans can be a great way to reduce your overall repayment on outstanding debt
Often without warning, we can find ourselves in debt and no way out. Whether this situation is due to unforeseen circumstances, or reckless spending, there can be a number of positive steps you can take to get yourself back on track.
I will often advise against taking out further credit, such as bank loans to curb your financial problems, but there are times when these are a good way of saving you money in the long run. Say for example you have £10,000 outstanding on a credit card at 17.9% APR and you can only afford to pay off £200-300 per month. With interest, the total repayment costs could become astronomical - which is a good opportunity to consider additional credit.
By taking out a bank loan at say 7.9% you can make yourself some considerable savings on the total repayment amount than if you were to continue with the credit card repayments. By using a loan to cover the balance on the credit card (and of course - make sure you use the loan just for the credit card payment!), you can change the debt to something more cost efficient.
Consolidating loans can be a daunting thing to consider, especially if you already have existing debt, but think more in the longer term and you will see the value that a bank loan can have. Of course, be sure to shop around for the best rate on loans which can improve your savings in the long run.
Simple tips for a quick cash fix
There are plenty of tips outlined on this site that can help you manage your debt, but there are also many opportunities for me to share with you on making some money in your spare time. This post will outline a few quick ideas that can be a useful way to raise some funds, whether its getting cash for gold, freelancing or doing surveys in your spare time.
Freelance out your skills - If you have a talent for writing, proofreading or data entry for example, you can cash in on these skills and earn a little money for it. Sites like Peopleperhour.com or Elance.com can be a good place to find work. Simply register and bid for work with numerous job postings.
You can easily earn £5-10 an hour copywriting for example, which can really add up to a considerable amount if you work in the evenings or at weekends.
Selling your old jewellery - With the prices at an all time high for gold, it can be a good time to sell off your unwanted jewellery and pocket the cash. Often you can find items that you no longer wear, which could be cashed in and used towards your next loan repayment or credit card bill.
So have a rummage around your jewellery box or drawers to see if there is anything worth trading in.
Give your opinion and get paid for your time - Why not consider doing some market research work or completing surveys for a little extra money. Search in Google for ‘market research work’ or ‘paid surveys’ to return a number of different opportunities. These may not pay that well, but for a few minutes work the pennies will add up quickly.
Although the above tips will not necessarily make you rich, they are a quick way to add a little extra cash to your monthly income. All of which can be put towards paying off any outstanding debt or bills that you may have fallen behind on.
Saving money at university
For students, saving money at University should be a priority aside from getting good grades and having a good time. Here are some ways to save money at University:
• Have a budget of your own - having a plan on how to spend the money aside from tuition fees and all miscellaneous fees at university, will certainly make life easier. List all the necessary things to buy and stick to the budget. Try not to deviate from this plan, but be realistic too. Leave yourself some money aside for entertainment and having fun - thats what university is about!
• Do not spend too much money on food - Obviously eating well is still important, but you can be frugal with your shopping habits. Be practical when buying some foods as there are ways to save on your shopping bills, buy purchasing lesser brands. This also includes making your own tea or coffee and not paying someone £2.50 for the priviledge. The same goes for lunches, why not make your own food and bring it into university with you.
Buy second hand books to save a small fortune at university
• Always find good deals for books - inevitably, books are part of student’s life. Without them, knowledge would never be sufficient enough. Canvass bookshops to find which ones are cheapest, shop around and look on notice boards to find second hand text books from ex students.
• Do not spend too much on fashion - if you are to treat yourself, always find fashionable clothes which will not cost you too much. There are often vintage or discount clothes stores where you can do both.
Fashion is not about how expensive your clothes are, it is about style and how you carry off what you are wearing.
As a student, you should aim to do well to give you the best chance of success in the future. Remember that you can have all you want if you finish your studies, stay out of debt and work hard.
5 great places to hear free music
Spending money on CD’s, MP3’s and vinyl when in debt is no longer a problem, as there are now hundreds of new places to hear, share and discover the next big thing. With the age of streaming now well and truely under way, there are plenty of places to get your music fix, without having to get out your wallet. Here are my favourite 5 places to listen to music for free right now:
Myspace
Myspace is still one of the largest sites on the web to find music.
Myspace, the hugely popular social network is still a great place to discover new music, stream preview tracks and get the latest news on your favourite artists. By allowing users to upload music to their own integrated MP3 player, the site quickly became the most popular site in the world to find and share music. While there are still plenty of maniacs, with their, ear piercingly awful screamo/funk/gabba hybrid creations, you can still find some great music on there.
Last.fm
Last.fm, the music streaming portal is a fantastic way to get free music streamed directly to your speakers. The site has a fair amount of niche or unheard of tracks that you may struggle to find anywhere else.
Another cool feature is the site will recommend artists and tracks that match your tastes, which is a great way to find new musical talent with ease. Read more
Tackling Student Debt
As the new student year is on the horizon, many students will soon realise that university life is not cheap. Despite the increasing expense of further education, there are numerous was to stay in the black and enjoy yourself while you are at it!
If you are about to start university this autumn you could graduate with on average £30,000 in personal debt over the course of your studies. With an estimated expenditure of £10,000 per year over the course of a 3 year degree, there are numerous ways to help cut this figure and reduce your overall level of debt.
Being intelligent with your accommodation choice is just one way to save money over the course of your student career - “Consider staying in shared halls during your second year, not just your first year” suggests Amy Holt, a third year student at Birmingham University. The tendency to move into private accommodation may be somewhat appealing during your later university years, but this can often come with added costs.
It is estimated that students spend around £2,900 on accommodation in their first year of university, rising to £3,300 in second and third years. A saving of around £300 over a year may not sound like much but over a 5 year degree this can be a considerable reduction in your student debt levels - which makes the appeal of university subsidised accommodation an attractive prospect.
At some point, you may find yourself contacted by a debt settlement company, but this is not always as intimidating as it is made out to be. Keep in mind there are laws that these companies must adhere to, and they are acting on behalf of whoever your debt is owed to. If you are courteous and professional while speaking to a representative, they should return the favor.
Along with some of our other money saving tips, we will be continuing a series of student debt management ideas to keep your debt levels to a minimum during your student years.
Change your travel arrangements to help ease Debt
When the purse strings are a little tighter, we can often continue with our normal travel routine and expect things to help themselves. However, this is somewhat unrealistic and can often push you further into debt.
Travel costs are on the rise, so consider your options before going to work or even taking a trip down to the shops. A few things you should ask yourself when considering your transport options are:
Trains are a great way to save money on long journies if booked in advance.
1. Are you always taking the cheapest alternative? Many times walking or taking a bus may be more cost effective than a car, and will be suited to those struggling with shrinking bank balance. Perhaps invest in a bicycle for local trips or your journey to work.
2. Can you make your journies more efficient? - If you are able to share car journies with others you can save a good deal on your petrol costs. Why not consider a car share system for work ? Pick up your colleagues who need a ride into work and allow them to contribute towards the petrol bill to help cover the costs of running the car.
3. Could you work nearer to home? - We would all love to spend more time at home whenever possible, so consider your housing or work location in more detail next time you are thinking of a change. A workplace which is a few miles closer to home could save tens or even hundreds of pounds on petrol costs over a year, so factor this into your work or living area.
4. Are you getting the most out of your transport? - Some types of public transport, such as bus, train or tram routes offer discounts for advance booking or season ticket passes. These offers will save you anywhere up to 50% off a journey (especially for advance bookings), so consider these options when looking to travel. Companies reward individuals who book a long time in adavance by offering saving - so take advantage of these where you can!
Although we often need to travel on a regular basis to get to work, there are still numerous way we can save money while doing so. Planning ahead is key to saving money on your travel costs, so have a look for alternatives to your current travel methods- you might be surprised how much you could save.
7 Quick Debt Busting Ideas
7 quick tips to help save you a few pennies
If your finding yourself up against a mountain of debt, there are numerous ways in which to change your spending habits and get back on the right path to financial security. Outlined below are 7 quick debt busting ideas that you can implement today to help tackle your debt:
1. Shop around online for good deals on any potential purchases you make - Although excessive spending is not great for reducing for your, there are some situations when large pruchases must be made. An hour or two crawling the net for the cheapest deals can save you tens or even hundreds of pounds. This is especially true for electronical and hardware purchases - so don’t buy in high street stores unless you cannot avoid it.
2. Consider going on a cash only allowance - Allow yourself a set budget of say £35 a week to spend and leave your credit cards at home. This prevents you going for the impulse purchase that you don’t neccesarily need. You will also be taught to think alot more carefully about where you spend your money.
3. Make your own lunches for work - Saving money by making your own lunches can add up to a great deal over the course of a year. If you imagine £3 per day that equates to:
£3 x 5 days = £15 a week
£15 x 52 weeks in a year = £780 a year!
If you make your own lunches, you could save upwards of around £390 a year - nothing to be sniffed at.
4. Ask your boss for more hours at work - If you work in a job that is paid hourly, why not add a few hours to your working week. An added 5 hours a week work could add over £1,000 an year to your income, which could help pay off some of your debt repayments.
5. Rent out a spare room - If you have a spare room or even a loft, which could be converted, you should consider renting it out to earn a little extra money on the side. In the UK, this is easier than ever, with the government’s ‘Rent a Room’ scheme, you can collect up to £4,250 tax free from becoming your own landlord.
6. Ask your credit card companies for a better interest rate - Often credit card companies are so eager to keep your business that, when pushed, will sometimes lower your APR. You can achieve this by ringing and saying that you are considering cancelling your credit card and would stay if you were offered a lesser rate.
7. Start earning cash back on your old items - Think about renting out some of your electrical equipment or machinery on Zilok, the peer to peer sharing site. Alternatively, why not list some of your items on Gumtree or eBay to earn a few extra pounds (Gumtree is still free to use for most categories).
It’s true that every little helps, which is why following a few of these ideas can be used to bust that debt!
Zilok - Peer 2 Peer Rental
I recently stumbled across a rental site called Zilok, which effectively works as a peer to peer rental portal, where you and I can rent items to others in our local area. The concept works by allowing users to upload items to a specific category for a small fee, then displays these items to people in the area. Users will then pay the lender, depending on the price they set for their item, and return the item once they are done.
This is a great site to use during the economic downturn as it means you can rent out some of the things you no longer use to earn a little extra money per month. I recommend taking a look at the site and familiarising yourself with how it works.
Also do a couple of test searches, Nintendo Wii in London for example yields two results, with one available for £8 a day and one for £20 a day. This shows that a little shopping around can get you some great deals.
Lenders can also request a deposit for their items, so if you plan to rent something of value, ensure your piece of mind by attaching a refundable deposit to the listing. The transactions are secured by a legal agreement provided by Zilok, but you never can tell with some people.
In regards to cost, the listing fees for products is currently set at 10 pence per month, per item. See below for final transction fees:
| Transaction Total Amount (GBP) | Commission (before tax) |
|---|---|
| 0 to £10 | £1 |
| £10 to £50 | 9% + £0.10 |
| £50 to £100 | 8% + £0.60 |
| £100 to £500 | 7% + £1.6 |
| £500 to £2000 | 6% + £6.6 |
| More than £2000 | 5% + £26.6 |
So going by this, it seems for smaller hires you get a decent deal. I’m going to give it a try with some smaller items to see how i get on. It seems this could be a good idea for helping get out of debt, or even just for a little pocket money.
