Tag: Learn Money IO

How to get Value for Money When Buying Foreign Currency

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

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

Why you Should Track Your Net Worth

What to do With a Financial Windfall

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If we are lucky, many of us will be handed a financial windfall during our lifetime; a financial windfall is a relatively large influx of surprise cash. It could be the result of achieving an unexpected bonus at work, particularly if you work in the financial services sector. Alternatively, it could be because you have received an inheritance after the death of a loved one. In addition, you could have won a competition, the lottery or sold a business. Windfalls are potentially life changing for recipients, if you take the right steps you can set up your family and yourself for life. What should you do if you receive a financial windfall?

What to do With a Financial Windfall

Take Your Time

The money should not be burning a hole in your pocket, take some time to review your current financial situation, net worth and future plans before you do anything. You should probably consult with an independent financial adviser and listen to their recommendations. Also, consider the tax implications of your windfall, if there are any. Be discreet about your good fortune, not everyone will have your best interests at heart, some will want to exploit the situation for their own financial gain.

Pay Down Debt

A great first step after reviewing your overall financial situation and net worth is to pay down debt, start with the most expensive debts first. This is likely to be credit card debt. For details of a very effective debt reduction strategy read this post, What’s the Best Strategy for Clearing Debts?

Make Additional Mortgage Payments

As the great Jim Rohn* remarked, it’s not possible to actually buy time; one of the occasions in life when it feels like you can almost buy time is when you pay off your mortgage early. If possible, arrange to make additional payments against your mortgage, in doing so you will save yourself tens of thousands in interest that you will not have to pay. Depending on the size of your windfall, you may be able to pay off your mortgage completely and take a big step towards becoming financially free.

Emergency Fund

If you have not had the opportunity or funds to create an emergency fund, now would be a great time to do so. Put away 3-6 months of monthly expenses that can cover you in the event that unforeseen circumstances prevent you from earning your regular salary.

Add to Savings

Take the opportunity provided by the financial windfall to add to your savings, ensure that you take advantage of the best savings accounts interest rates available to you. This article will help you decide what to do, What are the Different Types of Savings Accounts?

Philanthropy

If your financial windfall allows you to help others financially or support your favourite charities or organisations, please do so; your good fortune can have a much wider impact and make a significant difference to the lives of others.

Have you received a financial windfall? What are you planning to do with it? Let me know in the comments section below. Note, I would suggest that use an email address that does not make your identity obvious.

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

Have you saved Enough into Your Pension?

How to get Value for Money When Buying Foreign Currency

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

Best regards,

Mike

Have you saved Enough into Your Pension?

* ‘Time is more value than money. You can get more money, but you cannot get more time.’ – Jim Rohn

Why you Should Track Your Net Worth

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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.

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

Best regards,

Mike

Have you Saved Enough into Your Pension?

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Have you saved enough into your pension? For a large proportion of the United Kingdom population the answer is no. Most people are not saving enough for their retirement. Does your vision of retirement include freedom to travel and time to enjoy a comfortable standard of living? If we all to have the retirement that we aspire to one day, we will need to make sure that we are on track to achieve it. It is time to get serious and work out how much that will cost.

Pensions: Why Many People Are Failing

There are a lot of assumptions built into pension calculations, assumptions that are not true for many people. For example, the assumption that you will work 40 years of continuous employment with your salary continually increasing by X% and you maintaining your pension contributions at 12% of your salary for 40 years. Some of the realities of life such as redundancies, women taking time out to raise a family, individuals starting businesses, part time work, time out for studying and credit credit or student loan debts don’t exist in this Continuous Pension Saving Utopia.

I think when people realise that they are not on track to hit their pension goal, they give up and hope someone other than themselves will solve the problem. Let me be more specific, if you would like to live on a retired income of £25,000 you will need to have a pension pot of £500,000. That is assuming that you use your pension pot to purchase an annuity giving you the annual income of £25,000. Try this pension calculator to work out how much you would need at other income levels. As you can appreciate, £500,000 is a large amount especially when it’s considered that the average pension pot in the UK is around £50,000.

What Should you do Now?

Pension Pot

Work out the total pension pot you currently have, if you have had several jobs during your career you may need to do a little detective work to track down all of your workplace pensions. This article will help you find your pensions.

Up Your Contributions

Re-evaluate your household budget, can you afford to increase your contributions? If you are in a workplace pension then you should maximise the contributions that you make because these will be matched by your employer. If you are self employed, you should also increase your contributions.

Develop a Plan B

It may be that increasing your pension contributions alone will not be enough for you create a big enough pension pot for retirement. If that is the case, you should develop a Plan B.

Property is a great way to supplement your pension savings, you could downsize your main residence and use the profit for your retirement. Alternatively, you could rent out a spare room and earn extra income that way. There are other ways too, they include equity release and property investing. You can read more about these ways via this link.

If you own a business, this could become your Plan B. Depending on the nature of your business, you may be able to sell it and contribute money to your pension savings after the sale.

Don’t Lose Heart

The fact that you are reading an article like this is a positive in itself. You still have time to improve your level of preparedness for retirement and there are a number of ways you can do so.

Are you on track with your pension savings? If not, what are you going to do about it? Let me know in the comments section below.

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

Best regards,

Mike

Why Choose a Gold IRA?

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An individual Retirement Account (IRA) is a particular type of savings account that helps people prepare for retirement in the United States. There are tax advantages to saving in an IRA account. In the United Kingdom, the equivalent savings account is called a Personal Pension. A 401K is a company backed retirement plan (Workplace Pension in the UK), whereas IRAs are started by an individual.

IRAs can be subdivided into Roth IRAs and Traditional IRAs. With Roth IRAs, there is no tax deduction for contributions but when your investment earnings are distributed in retirement this is done tax and penalty free. Traditional IRAs by contrast, do offer deductions for contributions but when your funds are distributed at retirement taxes on investment earnings have to be paid.

IRA funds can be invested in individual stocks, bonds and cash. There are also many mutual funds that you could choose from. Either on your own or after receiving advice decide on an asset allocation that you are happy with for your IRA.

What is a Gold IRA?

Gold IRAs were created by the Taxpayer Relief Act of 1997. A Gold IRA account is a way to diversify your retirement investments further. A Gold IRA gives the investor the chance to own physical Gold, Silver, Platinum or Palladium.

To invest in a Gold IRA, you will need to set up a self-directed individual retirement account (SDIRA), this is an IRA in which the investor is in charge of making all the investment decisions.

What are the Benefits of Gold IRAs?

Pros

Investors have created Gold IRAs because they perceive them to be a counterbalance to what is happening with their more traditional investments. If paper based assets such as stocks are trending downwards, Gold tends to move in the opposite direction. Adding a Gold IRA will diversify your retirement investments. Since the financial Crisis of 2008 Gold IRAs have increased in popularity because of this investors’ desire of investors to spread risk with their retirement investments.

You can potentially benefit from increases in the price of Gold, of course this cannot be guaranteed. Between 2000 and 2012 the price of Gold increased for 12 consecutive years. While stocks can literally become worthless, the price of Gold will never be worth zero.

Remember, it is possible and advisable for an individual to have more than one IRA. You could hold one mutual fund IRA and a Gold IRA, for example.

Cons

Setting up a Gold IRA is quite a complicated process. First of all, you need to find an approved custodian (Broker) for the IRA and an approved Depository, where the Gold will be stored. Then you buy the Gold and have it transferred to the Depository.

Historically, some Gold IRA companies have not are not completely transparent about their fees and investors have experienced surprises after they have invested. Before you create a Gold IRA or rollover an existing IRA into a Gold IRA ensure that your custodian has confirmed all costs and fees.

If you are thinking about setting up a Gold IRA, Regal Assets is one company that you should consider. Click here for a free Gold IRA guide.

Do you have a Gold IRA already? How do you think your investment is performing? Let me know in the comments section below.

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

Best regards,

Mike

The owners of this website may be paid to recommend Regal Assets. The content on this website, including any positive reviews of Regal Assets and other reviews, may not be neutral or independent.

How to Create a Budget That You Can Stick To

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Creating a budget is like eating healthily, everyone knows that they should do but that does not mean that they will. I recommend that everyone who has regular earnings, or pocket money if they are children, creates a budget. Why do I recommend that? It’s about one word – control. Spending money without any sense of how much you have left or what other outgoings need to be paid for is a fast track to stress and ill health. Think of all those celebrities and ex professional sports people who ended up broke; they clearly were not in control of their budget. I do not want you to find yourself in the same position.

A Budget that You Can Stick To

Mindset Shift

I want you to start with a mindset shift, budgeting is something that will stay with you for the rest of your life. The right budget will give you peace of mind and a sense of well being. If we return to the food analogy, I want you to think of budgeting as eating healthier forever rather than going on a ‘financial diet’ for the short term. We all know what happens when people come off diets, they usually regress and lose the gains that they’ve made.

Start of with a Simple Spreadsheet

I know you do not want to start from the very beginning so click on this link to download a free household budget template. Print off your last two monthly bank statements and examine all your expenditure. If you do not know your monthly income, print off your last two payslips. Now record all the details required to complete your spreadsheet.

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You can download this budget template to use here. To change the currency on the template follows these instructions.

I always find it helpful to list mandatory expenditure above discretionary expenditure and savings. Mandatory expenditure includes your mortgage / rent and bills. Your mortgage or rent is likely to be the largest single expense in your budget. Discretionary expenditure includes entertainment and non- essential shopping items, saving is self -explanatory.

Budget For A Better Future

There are far more complicated spreadsheets available, but this is a good place to start. Having a plan for the month financially will make a big difference to how you feel. Sticking within your allocated amounts for each category will make you feel good. In time, you can add in additional considerations as you grow more confident working with your budget.

Apply the 50/30/20 Rule

It was US Senator and academic Elizabeth Warren who popularised the 50/20/30 budget rule in her book “All Your Worth: The Ultimate Lifetime Money Plan.” She co authored her book with her daughter, Amelia Warren Tyagi. Once taxes have been allocated, the rule is to spend 50% of your net income on needs, 30% on wants and to transfer 20% to savings. Above, I have referred to these categories as mandatory, discretionary and savings.

I have great news! Once you filled out your budget, you have done most of the actual work. In the future, you will need to refer to it, tweak it, add extra details about new income or items or expenditure, but on the whole it won’t change very much. In most cases, it is possible to live within your budget and to plan effectively for future additional expenditure around Summer or Christmas time.

Do you have a budget already? Are you managing to stick to it? Let me know in the comments section below.

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

Best regards,

Mike

Top 5 Automatic Savings Apps – Save Your Spare Change

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Wouldn’t it be great if you didn’t have to think and plan every saving that you made each month? It would make saving easier and achievable for those of you who want to save, but struggle to actually do it. Help is at hand on your smartphone. There are now a multitude of general finance and savings apps on both IOS and Android platforms. Below I have given an overview of my top 5, and listed their key features.

Automatic Savings Apps

Money Box

Money Box is a savings app that allows you to invest your spare change from everyday purchases. Over time you can build up your investments with money that you will not miss. Your money can be invested into a Stocks and Shares ISA, Lifetime ISA or general investment account. You can start with £1. More details here.

Chip

The Chip App is similar to Money Box in that it enables you to save spare change against goals that you determine. Please be aware that you need to give the app read only access to your bank account; this fact alone will put some people off. As with every app or account that I mention on this website, always do your own research and only move forward if you are comfortable to do so. More details here.

Money Farm

Money Farm is a wealth management app designed to make investing accessible. Created with families in mind, Money Farm gives its users access to investment advice and well structured investment products. Money Farm operates in the UK and Italy. More details here.

Money Dashboard

As the name suggests, Money Dashboard is a way to keep track of your financial accounts by viewing one dashboard rather than many different websites. It is an account aggregator that makes it very easy to budget and also track spending, The app currently has over 150K users. More details here.

Plum

Plum is not actually not an app, it is a Facebook chatbot and has the same purpose as Moneybox and Chip, allow its users to save without really trying to. The chatbot analyses your transactions, identifies regular income, bills and daily expenditure to calculate an affordable amount that you can save. Your savings are moved to a protected account and then can be invested with RateSetter, who are a peer-to-peer lender. More details here.

For each of these apps, do you own research and make sure that you read the Google reviews too. If you are using an app or website to invest in the stock market remember that Stocks can go down as well as up. Plan to invest for the long term.

Are you currently using any of the apps mentioned in this post? How are you getting on? Let me know in the comments section below.

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

Best regards,

Mike

How to get Value for Money When Buying Foreign Currency

How to Teach Your Children About Money

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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.

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

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

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

Best regards,

Mike

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

How to get Value For Money When Buying Foreign Currency

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

Many of you will have realised at one point or another that you have not received a good deal when exchanging your hard earned Sterling for foreign currency.

In many cases, a zero percent commission might be accompanied by a transaction charge that you were unaware of. There may have been hidden fees that you only realised when you received your credit card or bank statements a few weeks later.

This experience is very common, I have been through it myself. It’s not a great feeling. If you are still buying foreign currency from your bank, the post office or worst of all, at the airport, you should stop now. The same applies for expensive travellers cheques.

via GIPHY

Exchanging your currency at the airport will result in a less than favourable exchange rate and fees. It’s similar to buying fuel for your car at motorway services instead of at your local supermarket prior to starting your journey.

Value For Money Foreign Currency

So, how should you buy foreign currency? Lets start with a slight mind-shift, shall we? You don’t actually need lots of foreign currency before you travel.

Instead buy a minimal amount of foreign currency for taxis from the airport and light snacks. Buy this minimal amount from the best currency exchange you can find. This is a good place to search.

A month or so before you travel, apply for and receive a specialist credit card that allows you to spend in your required currency without fees.

This Revolut card is a great example. The card allows you to spend fee free with the real exchange rate in over 130 currencies.

It’s not the only option, The Halifax Clarity Card is similar. Please ensure you research them and apply for the one that best suits your needs.

These two steps should ensure that you get value for money when buying foreign currency and spending abroad. Feel free to let me know how you get on in the comments section below.

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

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

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Save up to £500 per year with a Sim Only Mobile Phone Deal

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

The lure of a new shiny mobile phone is very effective at keeping many people overpaying mobile phone companies. In most cases, customers upgrade to a new handset because they want to have the latest iPhone or Samsung handset. This is more to do with ‘keeping up with the Joneses’ rather than any new technical need. I have discussed this with friends and colleagues and have asked them the question, ‘What is it that your new phone can do that your current phone can’t?’ Most are stumped and cannot think of anything.

Rather than upgrading your phone for the sake of it when your contract runs out, why not consider a sim only mobile phone deal ? This means that you keep your existing phone and pay only for the text, call and data allowance that you select.

How to Select a Sim Only Deal

The process I went through to achieve this saving started with me calling my existing mobile phone company and asking them to review my recent call, text and data usage over the last 3 to 4 months. This only took a few minutes, once I’ d reviewed my actual usage it was clear that the most appropriate sim card only deal would cost me around £15 per month.

Please note, most of my work is online and because of that I probably need more data than you. It is likely that you will be able to follow the same process that I did and find an appropriate Sim conly deal for around £10 per month; there are even some available for £5 per month. When I switched to a sim only deal, I started saving £40 per month which equates to £480 per year. You can start searching for sim card only deals here via this link.

The money that you save could go towards paying off a debt or into one of one of your savings accounts. That choice is up to to you.

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