Category: Net worth

Why you Should Drive and Old Car and Pay of Your Mortgage Early

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?

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

Click here to be taken to the course landing page.

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.

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.

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

Best regards,

Mike

Save up to £300 per year by Changing Broadband Supplier

Should you Combine Your Pensions?

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

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

Over the course of your career, you are likely to move jobs and contribute to more than one pension. Keeping track of all your separate pensions and monitoring the relative performance can be a difficult task; there’s also the often complicated fees and charges to be taken into consideration too. It is no wonder that many working adults in the UK do not stay on top of their retirement planning in general and pensions in particular.

Your Pensions and Performance

When you have tracked down your pension pots, write to the pension providers and if necessary advise them of your new address. I add this point in because whenever I have lost track of a pension it is because pension providers have been sending the annual statements to an old address. You must notify them when you move house. Once your details have been verified, when you call your pension provider they will be able to give you a statement balance for your pension. Repeat this step for each of your pension pots. Ideally you will have the balance from previous years too. This will enable you to calculate which is your best performing pension.

Exit Charges

Once you have worked out which is your best performing pension it would be great if you could simply move all of your pensions into the best performing pension and go on to live happily ever after. Well, unfortunately it is not that simple, whilst most pension providers will usually let you add to an existing pension pot free of charge the same cannot be said ot exiting an existing pension plan. You are likely to face exit charges for exiting the pension plan early. Give your pension provider a call to find out the full extent of the charges that you will face if you exit the pension plan.

What Should You do?

After your research and phone calls, you will have a better understanding of whether it is a good idea to combine all of your pension pots into one. I cannot give a generic recommendation in this case. Please also consider the investment funds that your pensions are invested in on your behalf. You could have set them up with different risk profiles; keeping separate pension pots could be a smart way to diversify your pensions portfolio and reduce investment risk. At some point as you are evaluating your pensions and deciding what to do it would be sensible to consult an independent financial adviser.

Have you tracked down a lost pension pot recently ? Have you worked out which is the best performing pension? Let me know in the comments section below. There is no need to write any specific amounts!

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

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?

Why you Should Drive and Old Car and Pay of Your Mortgage Early

Best regards,

Mike

How to Stop Emotional Spending

Investments: Why Saving is Not Enough

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

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

In a few of my blog posts on this website I have reminded you of the importance of saving 20% of your income. Saving is vitally important to give yourself a platform to build towards financial freedom but saving on its own will not be enough. Let me explain, the current rates of interest offered by most financial institutions are relatively low, in most cases they are below 1.5%. This is lower than the current rate of inflation.

Saving into an account that offers this kind of interest rate will not magically produce a large lump sum or provide a regular passive income that will enable you to become financially free. Sadly even many pension funds built up during the working lives of adults in the UK will not deliver the levels of capital growth necessary. In addition to saving you will need to make investments; investments offer the chance for your money to grow significantly in the medium to long term. It is worth stating that investments usually have more risk attached to them; there are usually greater risks and potentially greater rewards.

Investments

Below I have listed several types of investment that could potentially move you closer to financial freedom. This is not an exhaustive list so I encourage you to do your own research to discover the investment approaches that are most appropriate for you.

Property

Property is my favourite type of investment here in the UK. The purchase of a Buy to Let property was until recently a very popular investment allowing investors to benefit from capital appreciation and rental yield. Changes in the tax relief that landlords can claim , introduced to dampen the buy to let market and create opportunities for first time buyers, are having their intended effect. It is now not as easy to set up profitable buy to lets.

For investors with less available capital, property crowdfunding is a way to join other investors and pool resources to invest in properties. Property Partner is an example of a crowdfunding property company that enables smaller investors to participate in property investment without having to buy a property outright. The returns from property crowdfunding are good and it is open to investors of all levels.

Stocks and Shares

By purchasing Shares, it is possible to invest directly in the performance of one particular company. Investors who hold shares in a number of companies refer to them as Stocks. Imagine if you had invested in Amazon or Apple in the early years, the return on your investment that you would have received would have been phenomenal. Investors can benefit from the increased stock price and dividends that the company might declare and distribute.

Unit Trusts and OEICs

Investing in one particular stock can work out well if the company does well but you could also lose all of your money if the company folds. A less risky approach is to use an investment fund to invest in a range of companies. The two most popular types of investment funds are Unit Trusts and OEICs. With a Unit Trust, you purchase units of a fund that is made up of the investments of many investors. This could be a tracker fund or an actively managed fund; a fund manager makes the investment decisions for the fund.

An OEIC is very similar to a Unit Trust except that the fund is run as a company and you purchase shares instead of units. Returns are paid through regular distributions, they could be quarterly or monthly dependent on what the fund guarantees.

Exchange Traded Funds (ETFs)

Exchange Traded Funds( ETFs ) are a relatively new investment product and are similar to Unit Trusts and OEICs in that they are open ended but the difference is that they are are listed on a Stock Exchange. They also include a wider variety of assets that Unit Trusts and OEICs.

Cryptocurrencies

Cryptocurrencies are easily the most volatile of all investments that I have included on this list. It is possible to both make or lose a fortune with cryptocurrency investments in the space of a few hours or days. Many professional investors including Warren Buffet do not consider cryptocurrencies a suitable investment and believe them to be little more than a gamble. However, blockchain technology which provides the platform for cryptocurrencies via its distributed ledger system, is here to stay. To read more about cryptocurrencies, read this post, Has the Cryptocurrency Bubble Burst?

If you have the stomach for it, and can afford to lose what you invest cryptocurrencies, most notably Bitcoin could provide the significant capital growth you will need for financial freedom. Despite what some professional investors thinks cryptocurrencies have made many new billionaires and millionaires in a short space of time.

What Should you Do?

Research the investments or investment approaches that appeal to you. Have you already made some investments? What type are they? Please let me know in the comments section below.

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

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?

Why you Should Drive and Old Car and Pay of Your Mortgage Early

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?

Best regards,

Mike

Can you live off a Cash Budget for a Week?

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

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

The next stage up from following a monthly budget is living off a cash budget for a week or a month. If you are not already following a monthly budget, please read this post, How to Create a Budget That you can Stick to; that post will help you create your monthly budget. For those of you already following a monthly budget, the cash budget could be for you. Following a cash budget will enable you to make further financial gains.

What is a Cash Budget?

Each month you receive your salary or pay cheque, when you do you should pay all of your bills and account for your needs. There will be money left over that you allocate to discretionary spending; items such as groceries and entertainment will fall into this category. For each of these items of expenditure you are going to withdraw the money from your account and place the money in an envelope. For example, if you have allocated £200 for entertainment during the month, you must place £200 in the entertainment envelope. Once that entertainment envelope is empty, you have run out of money for entertainment until next month. The same applies for all the other sub categories.

The Benefits of a Cash Budget

The beauty of the cash budget system is that you will physically see how much you spend on different items of expenditure. Compare that to contactless payments with plastic cards and no receipts, a scenario that makes it so easy to lose track. When you are living with a cash budget, do not steal from one envelope to make up for a shortfall in another. Your envelopes will become emptier as the month progresses; you might find that you are spending a lot on entertainment, groceries or lunches at work.

If you are disciplined, the cash budget system will make you more intentional about everything you spend your money on. This will mean greater control of your finances, which in turn will mean that you improve your net worth and achieve your financial goals more quickly.

It may be that you need to make more money, if that is the case the ideas contained in this post will help you, 10 Ways to Make Money Now.

What if you Have Money Left Over?

If you have money left over in some sub categories and shortfalls in others, you may need to re-visit your monthly budget and make some changes. If you have money left over and no shortfalls it would be advisable to increase the amount that you are saving.

The ideal scenario is for your first experience with a cash budget to be a positive one and for a new habit to be created. Research has confirmed that paying with cash will make you more conscious of every expenditure. Many people have attributed their success in paying off debts and achieving savings targets to the fact that they have used a cash budget.

Your Challenge

Your challenge, should you choose to accept it, is to live off a cash budget for one week. Split your money into budgets for the different sub categories and then live out of the envelopes on a day to day basis. I would love to hear about any progress that you make. Also, feel free to tell me about anything you found particularly difficult and how the overall process made you feel about your personal finances.

Let me know in the comments section below.

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

Why you Should Drive and Old Car and Pay of Your Mortgage Early

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?

Best regards,

Mike

What to do with a Financial Windfall

Do you Have the Right Money Mindset?

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

Image credit: https://tableforchange.com/

If you are going to be successful achieving your financial goals it is essential that you have the right money mindset. You may be thinking, what does that even mean? In broad terms, A money mindset is your attitude to money, how do you feel about money? What are your emotional reactions to the subject of money? We are all a product of our environments, if you grew up in a mansion with servants waiting on your every whim, you are likely to have a different money mindset to someone who grew up without wealth or many material items.

Your money mindset is given its ‘default setting’ by your parents. If they struggled with money and always mentioned it in the context of having bills to pay or needing more of it, you are likely to have developed a scarcity mindset around money. You may feel that you never seem to have enough money or that saving for the future is not possible with your current circumstances.

Money Mindset

It’s important that you take time to assess your own beliefs around money. Make a list of any beliefs that you have around money and assess them. The opposite to a scarcity mindset is an abundance mindset. It was Stephen Covey who created the term ‘abundance mindset’ in his book, 7 Habits of Highly Effective People People . People with an abundance mindset believe that there are enough resources (including money) for them and others to share.

Fortunately, money mindsets can be changed, you can transform from a scarcity mindset to an abundance mindset if you work on changing your beliefs around money. This is important because a person with an abundance mindset will be more likely to stick to their financial plans and achieve their goals. Also, they will be less likely to self sabotage.

My objective with this post, is to move you closer to an abundance mindset if you don’t have one already. Following the steps below will help you get there.

Gratitude

Create the habit of expressing gratitude for all that you have, do this on a regular basis. You have a roof over your head and the ability to buy all the food that you need. No doubt you have the love of family and friends and the opportunity to live in a relatively peaceful environment. In many parts of the world, people would love this to be true for them too.

Positive Affirmations

Make a list of positive affirmations that you can recite on a regular basis. The impact of these will be to focus your mind on positivity. You will be able to overcome the obstacles that the day or week may throw at you. For most problems that you face, a positive mental attitude is part of the solution. You must believe in yourself and then act in a way that is consistent with your belief.

Evaluate Wants and Needs

It should be relatively straightforward to evaluate your financial needs and wants. This post will help you, How to Create a Budget That You can Stick To. An abundance mindset does not mean that money will magically appear but that there will be enough for your needs and the needs of others too.

Think Practically About Money Making Opportunities

An abundance mindset should be rooted in the practical, don’t make the mistake of thinking that it is all touchy-feely. Think about practical ways in which you can make more money; perhaps you could sell unwanted items, this post will help you think of ideas, 10 Ways to Make Money Now. If you own a business, you could make more money by finding new ways to attract customers. Hopefully you are now becoming aware of the many opportunities that are open to you.

Personally, I am using this blog to keep me executing best practice with regards to personal finance. We should all become more intentional about our financial decisions and creating an abundance mindset will definitely help us on our journey towards financial freedom. I hope that you will take the journey with me.

One belief that I have had to unlearn was the belief that money has to be earned as a trade off for time. I now know that it if you create massive value for a large number of people you can be rewarded far in excess of anything you could earn as an hourly rate or salary. Good examples of that are authors, musicians or online course instructors. They create abundance for themselves but only complete the work once and then continue to be paid for it. Before they created anything, they had to believe it was possible and to adopt an abundance mindset.

Have you had to consciously change your money mindset because of limiting beliefs? How do you feel about money now? What changes have you experienced? Let me know in the comments section below.

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

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?

Best regards,

Mike