Personal Finance: How Should You Prepare for Brexit?

This post may contain affiliate links please read our disclosure for more info.

Image credit: https://www.irishnews.com/

For those of you not living in the UK, Brexit is a word coined to mark the Great Britain’s intention to leave the European Union. This decision was the result of a national referendum in July 2016 in which the electorate voted to ‘Leave’ or ‘Remain.’  The United Kingdom was very divided; 52% voted in favour of leaving and 48% voted to remain. Those who voted to leave did so without any real understanding of the repercussions of such a decision; they were encouraged by politicians who were economical with the truth. Now in December 2018, UK inhabitants find themselves heading towards Brexit and what looks like a self-inflicted recession.

Businesses and consumers have been heavily impacted; consumers are not spending as much as they used to and business people lack of confidence about the future. Businesses are currently less likely to invest in new equipment or staff and according to the GFK consumer confidence Index the current score for the UK is – 13. To give that some context, in December 2015 the confidence index score was +2. Significantly 2015 was the first time the index had remained positive for an entire calendar year since records began in 1974.

Prepare For Brexit

From a personal finance perspective, how can you better prepare yourself for the reality of Brexit? Below I have listed 4 practical steps you can take that will help.

Revisit Your Budget

Take a look at your current monthly budget and re-evaluate all of your expenditure. If there are opportunities to cut back – take them. For example, a lot of people have unmetered water bills even though in many cases a metered water bill will work out cheaper; read this post for information, Water Bills: Are you Pouring Money Down the Plughole?  There may be other opportunities for you to cutback.

Assess Your Employer & Job Stability

In financially challenging circumstances many companies suffer and some go into administration. In the UK, we have seen this with the demise of Maplin and Toy R Us.  

The task for you is to dispassionately assess how well your employer is doing and how likely/unlikely it is that you be made redundant. Do not rely on any  assurances from the management team at your company; do your own independent research. If you think that you could be made redundant save more money into your emergency fund.

Reduce Discretionary Expenditure

In personal finance circles, there is a lot of discussion around how much impact cutting out daily Lattes will have on the path toward better financial health. That’s a choice that you are best placed to make. However, what is sensible is to rein the dining out occasions and perhaps replace them with entertaining friends at home. Beyond entertaining, holidays are another area that you should review. Choosing a more cost effective destination or changing an international holiday to a UK based ‘staycation’ will give you greater financial comfort. Also, do not go overboard at Christmas.

Review All of Your Financial Products

Review all of your financial products including savings, mortgages, investments and pensions. Assess the impact on Brexit in each case and evaluate whether you should continue with your current provider. If appropriate, change to better performing products with other providers to maximise your returns.

How are you preparing financially for Brexit? Let me know in the comments section below.

DSX The Professional Crypto Exchange

If you have enjoyed this post you will also like the following posts:

4 Credit Cards to Repair Your Credit Score

Take This Free Financial Literacy Course Today

Cryptocurrency Exchange: This is Why I Recommend DSX

What to do if you are Made Redundant: 5 Steps

How to Control Your Cashflow With a Bill Payment Schedule

How to Boost Your Income With a Temporary Christmas Job – 4 Examples 

Credit Cards: How to Make Balance Transfers Work For You

Should you Combine Pensions?

What’s the Best Strategy for Clearing Debts?

Save up to £300 per year by Changing Broadband Supplier

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

4 Credit Cards to Repair Your Credit Score

This post may contain affiliate links please read our disclosure for more info.

Image credit: https://upgradedpoints.com/

It is very unfortunate that the people who most need credit are the least likely to receive it. People with low credit scores are deemed the greatest risk by the bean counters in banks and other financial institutions who determine who’s loan application will be accepted or denied. When you are being considered for any credit agreement, one variable that carries a lot of weight is your credit score. This is expressed as a number; fortunately, it is a variable that you can positively influence over time.

What is a Credit Score?

Definition:  As a consumer, your credit score is a number based on information from your credit reports at the three major credit reporting bureaus – Equifax, Experian and TransUnion.

Definition from Investopedia.com

Your credit score* is based on your performance against a number of factors including, how much credit you are currently using, whether you have missed payments for credit cards and loans, whether you are a home owner or rent the property that you currently live in.  According to Experian, a poor credit score is between 300-579, 580-669 is described as fair, 670 -739 is labelled good, 740-799 is very good and 800 to 850 is exceptional. People with poor credit scores are often turned down when they apply for credit.

experian-good-score-range

Image credit: https://www.experian.com/

How can you Improve Your Credit Score?

There are a number of ways of improving your credit score, for the purpose of  this blog post, I will focus on one. You can Improve your credit score by applying for a specialist credit card, using it responsibly and building up positive data points and your financial reputation. ‘Using it responsibly’ in this context means paying off your balance each month and making payments on time.  Credit cards for people with low credit scores are a niche within the credit card market; providers are more flexible than traditional lenders and charge a higher interest rate for outstanding balances and purchases.

Below are 4 credit cards that you can apply for, if you have a poor credit score and want to improve it.

Which Credit Cards can Help You?

Capital One

Click this link to be taken through to the website. 

Vanquis

Click this link to be taken through to the website. 

Aqua

Click this link to be taken through to the website. 

Ocean Finance

Click this link to be taken through to the website. 

If you do apply for any of these credit cards, please read all the terms and conditions carefully and pay particular attention to the APR that will be applied to your card. Use your new credit card responsibly and in a few short months your credit score will improve. As your credit score improves, you will be able to borrow at much more competitive interest rates.  You can find out your credit score for free here. 

Do you know your credit score? Have you had to take steps to improve it? Let me know in the comments section below.

DSX The Professional Crypto Exchange

If you have enjoyed this post you will also like the following posts:

Take This Free Financial Literacy Course Today

Cryptocurrency Exchange: This is Why I Recommend DSX

What to do if you are Made Redundant: 5 Steps

How to Control Your Cashflow With a Bill Payment Schedule

How to Boost Your Income With a Temporary Christmas Job – 4 Examples 

Credit Cards: How to Make Balance Transfers Work For You

Should you Combine Pensions?

What’s the Best Strategy for Clearing Debts?

Save up to £300 per year by Changing Broadband Supplier

Investments: Why Saving is Not Enough 

How to Stop Emotional Spending

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

*If you were wondering about the difference between a credit score and and credit rating, individuals usually have credit scores whereas businesses or governments have credit ratings. Credit ratings are expressed as letters with A being the highest as opposed to the numbers used for credit scores.

Take This Free Financial Literacy Course Today

This post may contain affiliate links please read our disclosure for more info.

Image credit: https://vdc.edu.au/

One of the goals I set for myself for this blog was to help people improve their level of financial literacy.

What is Financial Literacy?

‘Financial literacy is the confluence of financial, credit and debt management and the knowledge that is necessary to make financially responsible decisions – decisions that are integral to our everyday lives.’

Kristina Zucchi, a contributor to www.investopedia.com

With each blog post, I have intended to spread financial awareness and increase the knowledge base of my readership. The feedback I have received suggests that this has been appreciated. Thanks to all of you that took the time to feedback. Another way of spreading financial literacy is by sharing details of a free financial literacy course. Over the course of the last couple of weeks, I have been searching for a free resource that I could share with my readers.  I have now found a suitable course and this course is the focus for today’s blog post.

Free Financial Literacy Course

This financial literacy course provides a good introduction to personal finance and money management. The course is supplied by Alison.com the free online learning platform set up as a For Profit Social Enterprise in 2007 by Mike Feeric. Alison.com was started in Galway, Ireland and now has over 12 million students from 195 countries. The course that I have selected has been studied by sixty nine thousand students and has a rating of 4.1 stars. The course will take approximately 6-10 hours to complete.

Click here to be taken to the course landing page.  

Continual Learning

As we continue on this journey towards financial freedom, I will share other helpful resources with you. I hope that you find this course useful. I believe that it is important for us to continue learning and improving our knowledge base.

Have you taken any financial literacy or money management courses before? Let me know in the comments section below.

DSX The Professional Crypto Exchange

If you have enjoyed this post you will also like the following posts:

Cryptocurrency Exchange: This is Why I Recommend DSX

What to do if you are Made Redundant: 5 Steps

How to Control Your Cashflow With a Bill Payment Schedule

How to Boost Your Income With a Temporary Christmas Job – 4 Examples 

Credit Cards: How to Make Balance Transfers Work For You

Should you Combine Pensions?

What’s the Best Strategy for Clearing Debts?

Save up to £300 per year by Changing Broadband Supplier

Investments: Why Saving is Not Enough 

How to Stop Emotional Spending

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

 

What to do if you are Made Redundant: 5 Steps

This post may contain affiliate links please read our disclosure for more info.

Image credit: https://recruitingtimes.org/

There may come a time during your career when you are made redundant, in the United States the term used is Laid off. It is not usually a pleasant experience but it can prove to be a springboard to new opportunities. Having been through the experience myself, my advice is to take the steps that I have outlined in the post below. The Retail industry is an example of an industry that seems more susceptible to redundancies than others but the truth is that it can happen across the board an in many sectors. Once you have taken time to understand the practical implications of being made redundant, you should then create a financial action plan that will keep you focused on your financial goals.

If You Are Made Redundant

Emergency Fund

If you have an emergency fund, assess how much is in it and how long you will be able to cover living expenses after you receive your final salary cheque. Be as detailed as possible because this will determine the maximum time you have available to find another job.

Monthly Budget

Revisit your monthly budget, are there any areas that can be reduced? Rather than wait until you are in a desperate position, cut back on entertainment and other discretionary expenditure now. You will be able to reintroduce them when your employment status improves.  Consider your approach to food and increase the number of home cooked meals you make instead of visiting restaurants or buying takeaways. It will surprise you have much can be trimmed off your expenditure in this way.

Looking For Employment

Search for new roles as soon as you are informed that you will be made redundant. Search for career relevant jobs and side gig / second jobs at the same time. You will find that these side gigs/ second jobs often have a more urgent need and a faster turnaround time. The main benefit of this is that you will be able to get money coming into your account sooner than if you rely solely on career relevant jobs that may have a lead time of 2 -3 months. Keep a spreadsheet of jobs that you have applied to.

Transport

Assess your vehicular needs, do you need a car? If you have two, could you manage with one?  I recommend that you consider these questions dispassionately; don’t be concerned about what the neighbours will think. In the major cities of the UK and other cities around the world, it is possible to hire cars on hourly basis. You could hire a car for a few hours and then return it.

There are quite a few car sharing companies in London, for example, Enterprise Car Club, Easy Car and Zipcar. Ensure that you read the terms and conditions before signing up. Renting cars rather than having your own to maintain and run could save you a significant amount and buy you more time whilst looking for another job.

De- Clutter and Sell Unwanted Items

If your emergency fund is going to run out soon or if you don’t have an emergency fund start to de-clutter your home. Selling unwanted or unused items via websites such as Gumtree or Ebay will help you raise additional funds that can go into your emergency fund. This will buy you more time whilst you are searching for a new job.

Have you ever been made redundant? Did you get your financial house in order? Let me know in the comments section below.

DSX The Professional Crypto Exchange

If you have enjoyed this post you will also like the following posts:

How to Control Your Cashflow With a Bill Payment Schedule

How to Boost Your Income With a Temporary Christmas Job – 4 Examples 

Credit Cards: How to Make Balance Transfers Work For You

Should you Combine Pensions?

What’s the Best Strategy for Clearing Debts?

Save up to £300 per year by Changing Broadband Supplier

Investments: Why Saving is Not Enough 

How to Stop Emotional Spending

Water Bills: Are you Pouring Money down the Plughole? 

How to Stick to Your Budget During Summer: 5 Tips 

Does Your Choice of Supermarket Matter? 

Save Money by Switching Energy Supplier Every Year 

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

 

 

 

 

 

 

How to Control Your Cashflow With a Bill Payment Schedule

This post may contain affiliate links please read our disclosure for more info.

Image credit: https://barterfanatic.com/

In another post on this site I have written about how important it is for you to have a budget for your monthly expenditure. It is also important that you manage your bill payment schedule. Poor management of when bills need to be paid each month can create cash flow headaches, these are times when you have a bill to pay but no available money to pay it. It is worth creating a bill payment schedule as an Excel document and thinking about how dates on the schedule can be altered to create a better cash flow position for yourself.

Good management of bills will enable you to avoid late payment charges or a reliance on credit cards to get you through to the end of the month.

Bill Payment Schedule

Your Action Plan

Go through all your bills and record on your spreadsheet and make a note of when each bill needs to be paid. When you have finished, you should have a list of regular bills and dates covering accommodation, mobile phone and electricity etc.

Bill-Payment-Schedule-

Image credit: http://funf.pandroid.co/

Ask yourself, is there a regular time in the month when you seem to have more bills than cash? It may be that by week three of each month your available cash is particularly low. If this is the case, and you get paid once a month it would make sense to move payment dates from week 3 to closer to the start of the month, i.e. just after pay day.

If you get paid weekly, it could be advantageous to alter payment dates so that all bills are paid just after you receive your weekly wages. Individual circumstances will vary of course, the objective is to avoid having no cash left and still having bills to pay.

Simplicity is the key, it’s fairly easy to forget about a bill and then fall behind or miss a payment completely. Once you have altered payment dates, automate them with direct debits and standing orders so you don’t have to spend time thinking about them each month.

Ensure that you check how competitive all of your suppliers are once a quarter. If you can switch to a more cost effective supplier without being penalised, you should do so.

Do you have a schedule of bill payments? Have you created your own system?  Let me know in the comments section below.

DSX The Professional Crypto Exchange

If you have enjoyed this post you will also like the following posts:

How to Boost Your Income With a Temporary Christmas Job – 4 Examples 

Credit Cards: How to Make Balance Transfers Work For You

Should you Combine Pensions?

What’s the Best Strategy for Clearing Debts?

Save up to £300 per year by Changing Broadband Supplier

Investments: Why Saving is Not Enough 

How to Stop Emotional Spending

Water Bills: Are you Pouring Money down the Plughole? 

How to Stick to Your Budget During Summer: 5 Tips 

Does Your Choice of Supermarket Matter? 

Save Money by Switching Energy Supplier Every Year 

How to Stop Impulse Buying – 10 Ways

Have you Found all of Your Dormant Accounts?

Can you live off a Cash Budget for a Week?

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

 

 

Why You Should Drive an Old Car and Pay off Your Mortgage Early

This post may contain affiliate links please read our disclosure for more info.

Image credit: https://cars.usnews.com / Car pictured is a 2007 Honda Accord 

I get it. Most of us like nice things, especially nice shiny new things that get us from A to B. There is no denying that driving a brand new car sends a signal to the world that we are on the right track and can make us feel good about ourselves, but at what cost? Car payments are often the second or third largest items of expenditure on most people’s monthly household budget. If you are serious about pursuing financial freedom you will need to stop making ego-driven financial decisions.

I have noticed something, lots of people with immense wealth drive extremely ordinary cars. They often pick fundamentally sound cars that have good reputations but then they hold onto them. For them, impressing the neighbours is not a priority. They are more interested in increasing their wealth generating  assets.

A Car is not an Asset

Money in the right savings account will be compounding for you, whereas money spent on a brand new car will evaporate day after day as your car depreciates. Let’s be clear, only the rarest of classic cars appreciate; most cars depreciate in value. Whilst you’re busy impressing the neighbours, your money is leaving you.

Similar to savings, property is also an asset that will appreciate over time. In most parts of the United Kingdom and many places around the world,  property increases in value year upon year. If you are a homeowner, you can further increase the equity in your property by making additional payments against your mortgage.  This means that you will pay off your mortgage in a shorter period and as a consequence will save thousands in interest on your home loan. You will be able to own your home outright many years earlier than originally agreed. Your mortgage provider would prefer that you do not do this because they will lose thousands of pounds. If you can afford them, making additional payments against your mortgage is one of the best financial decisions you can make in your life.

Trade Down Your Car

In many cases, a car is necessary; to get to work, or pick up the children from school, plus all the shopping trips and errands that you use it for. I’m not advising you to make do without a car; simply downgrade the latest model or forego the latest model to focus on your financial goals. In doing so you will be trading down your car to bring you closer to financial freedom. If possible, buy a much older car and pay cash for it. The money you save on car payments can go towards additional payments against your mortgage. You would be surprised how much difference an extra £200 or £300 per month will make. 

I realise that for many people this kind of approach will require a mindset shift;  choose this approach because it suits your financial goals and stop trying to keep up with the Joneses. You never know, the Joneses may be up to their necks in unsecured debt. By being disciplined, you will soon be far ahead of them anyway.

Making extra payments against your mortgage will increase your net worth. You should be tracking your net worth on a regular basis, this post explains the why and how, Why You Should Track Your Net Worth. 

Have you considered buying an old car? Have you made additional payments against your mortgage? Let me know in the comments section below.

Regal Assets Banner

If you have enjoyed this post you will also like the following posts:

Make Money By Being Part of a Focus Group

Save Hundreds on Rent Per Month By Becoming a Property Guardian

4 Obstacles you Will Face on Your Financial Journey

Make Money Now With These Two Referral Apps

Have you got the Right Money Mindset?

What to do with a Financial Windfall

Why you Should Track Your Net Worth

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

Why you should drive an old car and pay your mortgage off early

 

4 Obstacles You will Face on Your Financial Journey

This post may contain affiliate links please read our disclosure for more info.

Image credit: https://renaissanceguy.co.za/

The path to financial freedom is a route that is potentially open to many and yet few actually take it and liberate themselves. Achieving your financial goals and becoming financially free requires discipline and commitment, you will face many obstacles but with the right mindset and financial habits success will come. I have listed four of of the obstacles that you will face below. Consistency of action and your ability to adapt to changing circumstances will be key if you are to make it.

Obstacles on Your Financial Journey

Level of Income Changes

The days when employees could expect to work continuously for one employer for a period of forty years and then retire are long gone. In many cases, you are now more likely to be made redundant and suffer a period of unemployment during your career. The chances of this happening are higher if you are an ethnic minority or a woman. Self employed workers and freelancers are also more likely to experience fluctuations in their income levels. If this happens, you will experience a change in the level of your income which could jeopardise your financial objectives.

What to do:

You should immediately re-visit your monthly budget and assess the impact to your net worth. It is important that you adapt to your changing circumstances; should you look for a part time job while also looking for a new main job? Can you make cuts to your levels of expenditure? Surely, the entertainment budget can be reduced? These are questions that you will need to ask yourself.  Hopefully you have an emergency fund that you can use until you secure another job.

Pressure from Creditors

If you are following the steps I outlined in this post, What’s the Best Strategy For Clearing Debts?, you will have a prioritised list of debts to clear. It should come as no surprise to you that your creditors will have no regard for your list. You may receive phone calls, text messages or letters from creditors who are a low priority on your list. They will want you to make payments to them and will not care what your overall plan is for reducing your debts. These communications from debtors are an obstacle to overcome and can put you under pressure. If you need to talk to someone consider contacting The National Debtline.

What to do:

Stay strong mentally and do not change your priorities in terms of debt reduction because you received a specific phone call. Stick to your plan that will result in you getting out of debt more quickly.

Pressure from Friends

True friends and family members will understand the financial journey that you are on and the steps that you are taking to put yourself in a better place financially. However, there will be many who do not understand or perhaps are not in your inner circle, they may continue to expect you to attend expensive social get togethers or go on holidays with them. This will put you under some social pressure.

What to do:

Do not give in to pressure to keep up  with the Joneses at all. If an event or purchase does not fit with your financial plan avoid it. If you must attend a wedding or special occasion, plan and budget specifically for the occasion. Recycle an outfit for the occasion rather than buying a brand new one. If necessary, explain your decisions to your friends.

Changes in the Value of Investments

On your financial journey, you will experience many changes in the value of your investments. Depending on the nature of your investment portfolio, these changes could be quite significant. For example, those who have invested in cryptocurrencies during the last few years will have experienced a level of price volatility that can make even the most confident investor think twice.

What to do:

Keep tabs on your investments and prepare to takes steps to rebalance your portfolio if it is no longer consistent with the level of risk you are comfortable with. Avoid knee jerk reactions to market changes and consider the long term at all times.

Having a financial plan and goals is a wonderful position to be in, having the strength of character and determination to stick to it and adapt when necessary is even better. You will face obstacles but it is possible to overcome them. I write from experience, I have faced each of the obstacles I have described and more.  I want you to come out the other side and be able to recognise your achievement and smile.

Have you faced any of the obstacles I have mentioned here? How have you handled them?  Let me know in the comments section below.

Regal Assets Banner

If you have enjoyed this post you will also like the following posts:

Have you got the Right Money Mindset?

What to do with a Financial Windfall

Why you Should Track Your Net Worth

Have you saved Enough into Your Pension? 

Are you and Your Partner Financially Compatible? 

Why Choose a Gold IRA?

What are the Best Savings Accounts for Children? 

How to Teach Your Children About Money

How to get Value for Money When Buying Foreign Currency 

Save up to £500 Per Year With a Sim Only Mobile Phone Deal 

How Much Should You Save?

10 Ways to Make Money Now

What’s the Best Strategy for Clearing Debts? 

What are the Different Types of Savings Accounts?

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

4 OBSTACLES YOU WILL FACE ON YOUR FINANCIAL JOURNEY

 

 

Why you Should Track Your Net Worth

This post may contain affiliate links please read our disclosure for more info.

Image credit: http://www.astrapefinance.com/

I hope those you who did not already have a monthly household budget, have now had chance to create one. If not, this post will help you, How to Create a Budget That you can Stick to.  One stage on from creating a monthly budget is to create another simple spreadsheet that records your total net worth.

Calculating Your Net Worth

Net Worth can be defined as the sum of all of your assets minus your liabilities.  For many of you, the thought of creating a spreadsheet with all your assets and liabilities recorded in one place might fill you with dread. If you have large student loans or credit card debts, recording your total amount of liabilities and assets might be a painful process. However, this is a necessary step to track your net worth.

Your personal net worth looks at the bigger picture, it’s not just your monthly income and outgoings. You also get the opportunity to track all of your assets as well as your liabilities. Assets include properties, savings, investment accounts, stocks and shares and businesses owned where applicable; liabilities include, mortgages, student loans, credit card debts and loans.

For the sake of simplicity it is acceptable to leave out all regular monthly expenses that are paid out of your monthly salary or wage. When thinking about net worth I always remember a quote attributed to the mathematician, Karl Pearson.

“That which is measured improves. That which is measured and reported improves exponentially.”

Karl Pearson

Improvements to Your Net Worth

This is exactly why we are doing this! Your net worth will improve. When you complete your first total net worth tracker spreadsheet, it will take some time. By the way,  feel free to think of a more exciting title than Total Net Worth Tracker Spreadsheet. 🙂

When you come to update it after a month, unless you have suffered some financial calamity,  your total net worth will have increased. For example, if you have made payments to student loans and or credit cards, their totals will come down slightly and your net worth will have gone up. If you are like me, you will find this incredibly motivating!  As an aside, do not compare yourself to others, just track your own progress. In time, deficits will turn into surpluses. Money that was originally to pay debts can be diverted into savings accounts when those debts have been paid. Tracking your net worth is an excellent habit and will help you to transform your finances.

What Should you do Now?

Create your total net worth spreadsheet and update it each month. Here’s a downloadable spreadsheet that you can use. 

Are you already tracking your net worth ? If so, what has been the improvement in the last 12 months? Let me know in the comments section below.

Regal Assets Banner

If you have enjoyed this post you will also like the following posts:

Have you saved Enough into Your Pension? 

Are you and Your Partner Financially Compatible? 

Why Choose a Gold IRA?

What are the Best Savings Accounts for Children? 

How to Teach Your Children About Money

How to get Value for Money When Buying Foreign Currency 

Save up to £500 Per Year With a Sim Only Mobile Phone Deal 

How Much Should You Save?

10 Ways to Make Money Now

What’s the Best Strategy for Clearing Debts? 

What are the Different Types of Savings Accounts?

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010. I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

Why you Should Track Your Net Worth (1)

How to Teach Your Children About Money

This post may contain affiliate links please read our disclosure for more info.

Image credit: http://chillmaadi.com/

Few adults have truly mastered money and yet it is incumbent on adults who are also parents to teach their children about money. Parents are the number one influence on children’s future financial behaviour. If parents always seemed to be concerned about money or the lack of it, this is what their children will learn. However, by being proactive and intentional about the lessons we teach our children,  we can set them up for future financial success. Below I have listed six key points that you can teach your children that will help them understand money. They have certainly helped me explain money to my son, I hope those of you who have children find them useful too.

Teaching Children About Money

Making a Choice

Explain to your child that you have a limited amount of money, it could be £10 or $10. The next step is for you and your child to decide to buy product x or product y, because you cannot afford to buy both.Those of you who have studied microeconomics, will recognise this as the ‘opportunity cost’ attached to the decision.  This is a great way to introduce needs and wants too.

It’ is good for children of all ages to understand the need to make a choice between the two. Use it with real world examples when you are out and about. This website is great resource for explaining money to your children. Please make use of it.

Now or Later

Slightly more difficult to explain to many children is the concept of delayed gratification. Instead of buying something now, why not save your pocket money/ birthday money and save up to buy a larger item in a few weeks’ time? If a look of incredulity comes onto your child’s face, do not worry, you’re not alone. Once again, demonstrate with practical examples from their daily life.

Managing Pocket Money and Expenditure

Another great financial lesson is encouraging your children to have some financial freedom to make their own choices. If you are able, allow them to ‘earn’ pocket money by keeping their room tidy and helping out with chores.  The money they earn is theirs and they should budget, save and donate; the remainder can be spend as they see fit.  Please explain that if they deposit their money into a savings account it has a chance to grow because of the interest. Money stored in a piggy bank will not of course.

Financial Rationale & Commentary 

I provide my son with a financial rationale for financial choices to build up his knowledge and help him to understand concepts such as value for money. For example, I have explained why I filled up the car with fuel at the local petrol station ahead of a long journey instead of at motorway services. Today, he told me that he would buy a Ferrari if he had the money so I’m not sure if everything  I’ve said has been taken on board. 🙂

Regular Saving and Compound Interest 

This website is a great resource that will help you explain to you child how compound interest works over time. The great amounts that can be created by regular saving and compound interest, as demonstrated by the website’s calculator tool should excite them.

As your children get older, over 14 years of age from example, there will be many opportunities to have specific discussions around money. Some may relate to the costs of higher education or how to sensibly use credit and debit cards. I will not be able to cover them all in this post.

How have your discussions with your children about money been? Were there any areas they struggled with?  Let me know how in the comments section below.

Regal Assets Banner

If you have enjoyed this post you will also like the following posts:

How to get Value for Money When Buying Foreign Currency 

Save up to £500 Per Year With a Sim Only Mobile Phone Deal 

How Much Should You Save? 

10 Ways to Make Money Now

What’s the Best Strategy for Clearing Debts? 

What are the Different Types of Savings Accounts?

My aim with each blog post is to help you move to a better financial future. I believe that there is not enough financial education in the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010.

I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

Follow me on Pinterest

How to Teach Your Children About Money

 

What’s the Best Strategy for Clearing Debts?

This post may contain affiliate links please read our disclosure for more info.

Image credit: https://www.bloemfonteincourant.co.za/

It’s no coincidence that debt is a four letter word. As adults, we understand that debts are something we should eradicate from our lives as much as possible. There are different forms of debt of course; mortgage and student loan debts are deemed acceptable by most, whereas credit card debts and loans are not.  It’s not a mystery how debt occurs, it is simply a result of spending more money than you have whether in the short term or on an ongoing basis.  Debt can have far reaching psychological effects on people and unfortunately many people struggle to cope with the pressure it brings. If you feel this way, please contact the National Debt line via this link. 

Strategy for Clearing Debts

Paying debts off can be a fantastic experience, which is quite strange when you consider there is nothing tangible at the end. There is no trophy, certificate or awards ceremony for paying off a debt. What is the best strategy for paying off debts? Individual circumstances may vary of course, but broadly speaking the approach I have outlined below is a good one for most people.

Calculate the Total Amount that You Owe

Be intentional about this, create a spreadsheet with all your debts and interest rates listed. It may not be pleasant reading but facing up to the full extent of your debts is a great first step.

Work Out Which Debt ‘Costs’ You More

In most cases this will be the debt with the highest interest rate. It is likely to be a credit card, they tend to have higher interest rates and cost more. The worst of your credit cards should be your focus. Prioritise this card for any payments you make towards debt without jeopardising your monthly budget.

If Possible Make Minimum Payments on Other Debts

I know, this is easier said than done of course; you may be presented with the choice of paying more of a costlier debt at the expense of missing a payment for a less costly debt. In that situation, I would pay more of the costlier debt. Ultimately, you will reduce your worst debt quicker that way.

Communicate with Your Creditors

Be careful with how much information you communicate to your creditors for this reason, you cannot predict how each will react. ‘Radio silence’ is not an option but proceed with caution. Let’s imagine that you have been made redundant. I don’t need to imagine because that has happened to me.  When you tell some of creditors they may be sympathetic and give you some additional flexibility whilst you get back on your feet. However, some will now categorise you as ‘high risk’ and this will affect your credit rating and access to money even for basic essentials.

Be Consistent and Keep up the Momentum

You may be tempted to reward yourself for making progress reducing your debts. In principle this is fine, but my recommendation would be that the celebration is extremely low cost; your favourite bar of chocolate rather than a bottle of champagne, for example.

Peer Group Support 

If you know of other people who are on a similar debt reduction journey form a group with them and support each other. It will strengthen your resolve.  There are also lots of online communities, websites and podcasts that will give you additional support. Make use of them.

If you follow the steps above you will reduce your debt and by being consistent you will reach the day when you are debt free. On that day, I think you definitely should upgrade your reward or celebration. You will have earned it.

One final consideration for you, in the United States there is a personal finance guru called Dave Ramsey. Rather than the approach I have outlined above, he advocates starting with the smallest debt irrespective of the interest rate in what he calls the Debt Snowball. His rationale is that your Debt Snowball builds momentum and helps you to keep going.

Regal Assets Banner

If you have liked this post you will also like the following posts:

How Much Should You Save? 

10 Ways to Make Money Now

What are the Different Types of Savings Accounts? 

My aim with each blog post is to help you move to a better financial future. I believe that financial education is largely absent from the national curriculum and I intend to share anything helpful that I have learned along the way. I am by no means a financial expert. None of the information on this website constitutes financial advice and is provided as general information only.  This is my personal finance blog; my marketing blog is over here and I have been blogging there since 2010.

I hope you have found this information useful. Thank you for reading.

Best regards,

Mike

What's the best strategy for Clearing Debts_