It’s almost impossible to avoid the allure of the latest gadgets. For mums adept at navigating this digital landscape, the temptation to keep up with the newest releases can be strong. However, with the cost of living on the rise across the UK, it’s more important than ever to exercise financial caution alongside technological enthusiasm.
“Insurance – Is it worth it?” is a paid collaborative post with HSBC. With the cost of living crisis, many families are looking to cut costs and many are asking if they should cancel insurance policies. Before you even contemplate it, you really need to understand what each policy covers and how and also if it is a legal requirement. Please remember that I am not a financial adviser just a regular mum, so please take professional advice.
The lower the family income, the more critical the question of creating savings is. A financial cushion will save you temporary work problems, salary delays, and unexpected expenses. Small loans can save for a certain time, but they also must be returned, so the issue becomes even more urgent. How to save, form a financial cushion, but, at the same time, not give up your quality of life? Financial company Payday Depot is ready to answer this question.
I think that the majority of the UK is deeply concerned and anxious about the rising energy costs and other expenses and how we are all going to cope in the coming months and pay our energy bills. There will be lots of people unable to pay their upcoming utility bills and I know that I am very anxious about it (especially having just received my water bill and the direct debits more than doubling). I have blog posts about ways to save energy, however, this crisis is not something you can budget your way out of. I know you can not budget your way out of destitution and would never […]
Natwest Fairer Savings have asked me to share with you #MySaverStory past, present and future. The truth is I have never really been a saver, well not until my health scare. Before that I pretty much winged though life. Both the husbeast and I were in great jobs and we were off the mindset that credit was fine and we would be OK. Ha, ha, ha well we were wrong! Life stepped in and it was a big fat wet fish in the face and we got in a pickle that we are still working our way out of five years later!
According to a recent survey by Scottish Friendly UK disposable incomes on the rise, which can only be a good things after such a period of recession. (You can find Scottish Friendly on twitter) We were listening to the news on the radio whilst in the car at the weekend, when Mini asked “what is a recession?” This got me thinking that money really has a terminology and language of all it own and it is my responsibility as a parent to teach this to the boys and to make sure that they are money smart, but how do you do that?
Securing Your Family’s Finances
You are your family’s protector. So it is important that you manage your family’s finances wisely. There are many risks and challenges in today’s economy, so how do you maximise your family’s financial security? Here we offer some of the best advice that has stood the test of time.
Check Your Debts
Debt is money lost. Now while some debt might be useful, like a mortgage, other debts are bad especially if interest rates are high. Check every source of debt, and find out if you can pay it down or get a better rate. In some cases debt consolidation can lower what you pay in the long run. Here are some options for paying off your debts.
Balance Your Budget
Sit down with your spouse and review all your expenditures. Do you really need an expensive triple latte every morning? Can you buy bargain brands instead of name brands? Remember, sometimes the easiest way to make money is to save it. Once you identify the fat, then trim it and keep it trimmed. A yearly budget review keeps your spending in line and avoids waste.
The next step is to find out if your company has a pension scheme. If they do they will make contributions that match or partially match your contributions. This is a guaranteed return that you must take advantage of. Also, study what the scheme is investing in, and find out if you can make personal modifications. Remember that soon, workers will be automatically enrolled into a workplace pension scheme.
If you are self-employed or if your employer does not have a pension scheme then you can still save with an Individual Savings Account (ISA). You can contribute up to £11,520 a year into the account, and all returns are tax free. There are different options that you can choose from including a simple cash savings ISA or a stocks and bond version. In any case, the tax break is money in the bank so start an account as soon as you can.
Now while all of this trimming and saving is important, you also must take unforeseen risks into account. What will happen if you get sick or injured unexpectedly? What if you die? In these cases disability and life insurance should be in place. Even though these are expenses, your family’s financial future should be secured in the event that something goes wrong.
There is one case, however, where insurance can be an investment vehicle. Whole life insurance is where you are the owner of the policy until you die. All money that was contributed to the policy grows tax free. After fees and commissions are removed, the remaining cash is added to the death benefit. Some policies even allow you to borrow or withdraw from your insurance account. Find out more by reviewing policies at Compare The Market.
If you are fortunate to have some cash to spare, then you should consider other investments such as precious metals, real estate or stocks. The best advice is to diversify, but you can focus on certain areas that interest you. Educate yourself as much as possible about the markets and their risks. Financial advisors cost money, but if you don’t have the time to do the research it might be worth hiring an advisor.
Buying a home is usually a good investment as well. First of all you get to live in it, and you can borrow against it if necessary. Later, as you age, you can sell it and move into a smaller property.
Re-evaluate As You Age
Your savings goals will change as you get older. As you approach retirement age you should gradually move your investments into more stable vehicles. For example, your company pension scheme might start out heavily in stocks, but as you get older move it into stable cash. While cash certainly can lose its worth, it is less likely to plunge in value as quickly as a stock.
You can also look into a Self Invested Personal Pension (SIPP) which gives you greater control over your investments. If you have been doing your homework over the years, then you should feel comfortable steering your own investment ship as your working years wind down.
The world economy has become extremely challenging. Nevertheless, there are still ways that you can fireproof your family’s finances. It is important to have a plan, stick to it and live within your means.
I have freely admitted that we have had to borrow money in the past and that using credit cards to pay the mortgage quickly spiraled and things could have got very messy, very fast. Vanquis are well aware that people do get into trouble and have set up a site to help with all those questions you might have and to give you practical debt advice and resources.
I know that it can be far too easy to bury your head in the sand and feel as though there is no where to go and nothing you can do, but actually taking control of your finances is incredibly empowering and can help you feel more in control of a difficult situation.
I know how hard it can be to manage money and finances in the current financial climate and talk a lot about saving money on my other blog A Thrifty Mum. But we really want to hear from you and I hope that together we can share some brilliant top tips that will help us all. Even though I often write about family money saving and management I still have a lot to learn and I love getting new tips and ideas.
So why not join me and Vanquis for a money management twitter party on Wednesday 5 June at 7.30pm with you top tips for money management.