Change your lifestyle — lose your debt!

There are myriad ways to combat debt and for the most part they appear initially to be rather serious and require a great deal of effort and financial control to organise and adhere to.

The following is a list of suggestions that attack the matter in slightly less conventional ways than ‘creating a budget plan’, ‘consolidating your loans’ or ‘applying for an IVA’.

See if you can have some fun with your saving instead and beat off those debt blues while still putting a smile on your face.

Downsize!

If you’re rattling around your usual four walls then maybe it’s time to think about downsizing? Not only could you release a large sum of capital from the equity of your home but also this could offer you a brand new adventure living somewhere completely new. A change of scenery could be just the thing.

Get a roommate

Or if you got the space but love your home then earn some extra cash by letting a spare room to a student or Airbnb’ing it? That extra income could be paying your monthly credit card bill.

Run yourself rich!

Instead of each time you’re about to head for the gym — stop! Put on your sports kit and head for the hills instead. Running through the country or along the beach is absolutely free of charge where your gym fees aren’t. In fact, gym fees are one of the most wasted expenditures in so many people’s budgets. We all have the best intentions in early January but you’d be surprised (or perhaps you wouldn’t) by the amount of new fitness fanatics who have given up going within the first six months and yet are still paying the fees. Even at a low rate of £20 a month that’s £240 a year you could be saving.

Cycle yourself back into the black

Ditch the car and cycle to work. Running a car is a very expensive commodity if you don’t have to and the additional benefits to your health from cycling are excellent (as long as you manage to stay on two wheels and not end up in a hedge). £10 per week on petrol is £520 a year. Put that with the savings from your gym money and you’re heading towards your first thousand!

It’s only a cup of coffee!

If you only bought one cup of coffee a day from a coffee shop or chain you’d still be spending over £900 a year on getting those eyes open on a morning. We’re not saying you’re not allowed a treat but that’s nearly £1000! On coffee! And that’s without the cake on the side or the overpriced bagel…

Eat yourself out of debt

Ok, so we’ve covered the nations favourite drink (well, apart from alcohol but we’ll get to that soon enough) now let’s get to how we eat.

If you learn to cook and eat sensibly by making better buying choices with fresh groceries instead of ready meals and pre-prepared foods you could be saving a bundle. One social experiment involved a family cutting their weekly food spend by nearly a half!

And what about lunch? Stop nipping to M&S for a sandwich and a smoothie, if you bring your own freshly prepared packed lunch to work you can be making more staggering savings without sacrificing the goodness.

Social life suicide

Just because meeting up with your friends used to mean a trip to a restaurant or a big night out on the town it doesn’t mean you have to ditch your friends to save that money.

Why not all pitch together and throw an Indian dinner party at home? Or a Chinese banquet? Even a Mexican mix-up won’t break the bank given basically it’s mostly minced beef, some vegetables, sour cream, salsa and a few tortillas.

In the States they call it a Potluck dinner and it’s a popular way of everyone getting together. It splits the cost, it’s a lot cheaper than going out, and you don’t have to skimp on the alcohol if you don’t want to.

Happy Hour!

The after work pint and or a tray of cocktails is a great way to let off steam but it will also ring up those precious pounds in no time. 5 pints a week, whether you drink them all at once or not, will cost nearly £1000 a year. If you like a drink then that number is going to double on Saturday night and then again on a Sunday afternoon watching the football ‘down the pub’.

Instead, why not arrange to have a few beers at a friend’s house or sinking a few somewhere neutral that you’ve bought from an off-licence? Take-away beers are going to cost about a third of the price.

Still with the demon drink; what if you replaced that bottle of wine after work with mocktail or healthy alternative? As few as two bottles of wine a week will add up to over £750 a year.

Make a game of it

There are masses of budgeting and finance apps for mobile phones now. You can enter all your income streams and outgoings to work out a proper budget and start clearing your debt and saving money. We love our phones so much and treating it as a game could be the difference between loving and loathing checking your finance figures.

Shop around

Buying on impulse is how great in-store marketing works but if you can take a breath and a step back you’ll be able to find exactly the same product at a cheaper price if you do a little research when you get home. Online deals are plentiful and easy to find. eBay used to be a second hand sellers dream but now it’s grown into a mass-market of high-street and cottage industry businesses alike, all competing with the big boys with a fraction of the costs.

What did you have to do to earn what you spend?

One way to cut down on luxury or impulse spends is to work out what you had to do to pay for them. If you’re earning £10 an hour you’d have to work 20 minutes to buy that new e-book for your Kindle, but those Christian Louboutin shoes at £495 could have taken a whole week’s wages to pay for.

If you love your job — and those shoes that much, then no problem! But if you struggle to drag yourself to the office day in day out, was it really worth it? Working out the cost of your spend to that of your soul could just about put an end to some of your more frivolous purchases.

And the rest…

You could ditch the branded food items, or start making gifts to give as Christmas and birthday presents. Perhaps you can turn the same creative skills into a hobby that makes money by selling your art and crafts? Drop the extra TV subscriptions, collect coupons and online offer codes, or juggle the babysitting with the other mums to help each other out and save on fees.

There’s plenty of ways to replace the things we’ve got used to having purely through habit instead of necessity, and with a little careful thought we could be saving thousands of pounds without losing out on all the fun.

Go be creative with your money saving ideas — and ditch that debt.

When Should I Review My Life Insurance Policy?

You spent hours doing your research to find the right policy for you, and now have your life insurance sorted. You’ve set up your regular payments and are confident that when the time comes, your life insurance will take care of everything. However, there are still things that need to be done. That’s because certain changes to your personal circumstances will impact your life insurance. These changes mean you will need to review:

  • Who are your beneficiaries for your life insurance policy? Do new additions to the family need adding to your cover?
  • If your premiums are set to increase over time, does this cost still seem appropriate for your budget? Will you be paying too much, or will a change in your finances mean you’d to pay more?
  • Is the cash value of your policy still adequate to cover everything you’d like it to cover? Or is it turning into an oversized nest egg, and you’d benefit from lowering your payments?

Because the answers to the above questions may change over time, it’s important to make sure your life insurance policy also evolves to suit your circumstances.
So, what are the factors that will affect your life insurance?

1. Marriage
After getting married or entering into a civil partnership, you may decide to create a joint life insurance policy. This is especially important if your spouse depends on your income. You can adjust your policy to help cover outstanding debts that your partner wouldn’t be able to manage alone. Other factors that might impact the amount of cover you need include

Likewise, separation from a partner can be a reason to review your life insurance policy. This can be an alteration of what your cover gives the other person, or mean completely removing them from your policy.   

2. Children
Your children will most likely have the biggest impact on your life insurance policy. It is important to review your life insurance policy when you have children, to ensure they are taken care of, should you pass away prematurely. This may mean changing your life insurance to mirror an annual income, rather than providing a lump sum. It’s also imperative that you think about the future costs you may want your policy to finance, such as university fees.

Once your kids are old enough to support themselves financially, you may want to review your life insurance policy again. Now that their needs are different, consider leaving them a different part of your estate, rather than a cash lump sum. As your children grow up and begin creating families of their own, this again may be a reason to review your life insurance policy. You’ll need to consider their spouses and any prospective grandchildren.

3. Retirement
Once you reach retirement age, it may be that your loved ones are in a different position with their finances than they were when you originally took out life insurance. They may no longer be reliant on your help to survive. However, that doesn’t mean you should just go ahead and cancel your life insurance policy! There are still plenty of reasons to have life insurance for people over 70. For example, you could amend your policy to instead cover the costs of your funeral expenses. Estate taxes are also something to think about, especially if you have a particularly sizeable estate.   

4. Moving House
For many people, mortgages have a large impact on their life insurance. They want to make sure that their loved ones aren’t left with a crippling debt, should they prematurely pass away. Over time, you’ll pay off your mortgage. As you do so, you may lower your life insurance premiums to match the remaining debt against your property. But if you decide to move home, then you’ll need to review your life insurance cover, to ensure it is appropriate for your new property.
There are other changes to your mortgage that will impact your life insurance policy. This includes mortgaging your home to release equity, or extending your mortgage term.

5. Changing Jobs
Just received a promotion? Congratulations! By changing jobs, you may find yourself in a better financial position. With a larger disposable income, it’s worthwhile reviewing your life insurance policy to see whether you’d like to pay higher premiums and therefore insure more.
Alternatively, you may be taking a small break from work. This could be for any number of reasons, from having kids to being made redundant. With less money available, you might consider lowering the sum assured as well as lowering your monthly premiums.

How to change your policy

If you decide that your cover isn’t appropriate for your circumstances, then you can either amend your current policy or even cancel it and find a new one. Depending on the cover you initially purchased, it may not be possible to make some of the changes that you would like. In this situation, it isn’t necessary to just go ahead and cancel your existing policy. Instead, shop around and consider taking out a second policy that will top-up your current insurance and cover any of its shortfalls. Life insurance premiums are normally lower, the younger you are when you take out the policy. Therefore, it may be much more cost effective to hang onto your current life insurance. This is especially true if you’ve had any health problems since first signing up for a policy.

All in all, there are plenty of reasons why you should consider reviewing your life insurance policy. It’s understandable if you’re unsure about whether a changing circumstance will have an effect, or if you can’t decide on how to proceed with making an amendment to your cover. In these situations, it’s best to consult a life insurance agency to find the best avenue for you. Many individuals will even meet with an advisor on a yearly basis, just to keep on top of things and make sure they’re getting the most out of their policy.

Top Tips for Staying on Budget

While sticking to a defined budget is an important part of managing your finances, it can be difficult to stay on-track in everyday life. These tips should help you make everyday choices so staying on budget is as easy as possible.

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Be Aware of Your Income

An important part of budgeting is being aware of how much money you actually have to spend. Making a list of the incomes of every earning member of the family is an important way to start this progress.

Incomes can vary from month to month, especially if you or a member of your household do seasonal work or are self-employed, so make sure to take this into account. The best way to do this is to slightly underestimate the total income, giving yourself a safety margin when it comes to spending.

While this step can seem obvious it is important to know where you stand so you can make realistic targets in your budgeting.

Be Aware of Your Outgoings

The other side of budgeting is the act of spending your money. To work out how much you’re spending, make sure to save your receipts. Once you’ve done this, matching up how much you spend with how much you make should be easier, especially if the whole household is saving and checking their receipts.

Saving receipts isn’t the only way to track spending, if you’re organised enough, plotting each purchase or expenditure into a spreadsheet can be an effective way of tracking your budget.

Again, while being aware of your outgoing spending seems obvious, the amount you spend on some parts of your life might surprise you. This is especially helpful when working out where to make cuts in your budget later.

Make Savings a Priority

Once you have worked out your income and your outgoings, allocate some of your income to savings, whether this involves reducing your outgoings or putting aside surplus income. Doing this will build up a fund that you can call on in an emergency, put towards paying off debts or use for whatever goal you are budgeting towards.

This should be done before you allocate spending to other parts of your life, making saving your priority is an important part of achieving your budgeting goals, whatever they might be. As well as helping you to move towards your goals, knowing how much you have saved can give you a sense of achievement which is important when budgeting feels draining or frustrating.

Identify Necessities

When going through your income and outgoings, a good thing to do can be identifying your necessities. Utility bills, rent, council tax, and other compulsory expenditures are obviously a large part of this category, but this can also include making sure you have toiletries and basic food items.

After identifying these necessities, set aside an amount for them, slightly overestimating the cost to give yourself a safety margin when it comes to these expenses.

Plan Meals and Shop Ahead of Time

Impulse-buying food during the week is tempting, especially when you don’t know what you’re going to eat when you get home. A way to get around this is to write yourself a weekly menu, planning out the ingredients needed for each meal.

Making sure you pick up most of these ingredients in a single weekly shop means you have fewer reasons to return to the supermarket later in the week, giving you less of an opportunity for impulse-buying.

Having a menu before you go shopping also means that if an ingredient appears several times in your menu you can make sure to buy more of it, often saving money when compared to buying several smaller portions. While this is a good way to save money on some items, be careful of perishables like fruit and vegetables, as they can go off if purchased too far in advance.

Eliminate Expensive Luxuries

Cutting out one or two items from your purchases can make a massive difference to your overall expenses, especially if they’re highly taxed items like cigarettes or alcohol. These don’t have to be the items you lose, however, making decisions about how much you want to spend on different entertainment items like TV packages or visiting the cinema can help as well.

Going out for meals is often an expensive part of people’s lives, and can be cut out by increasing the amount of homecooked meals you have each week. While this takes up valuable time, it saves money, and can be used as a way to bring the household together, using cooking as a communal activity.

Allowing yourself meals out or other luxury items as occasional treats can also be a good idea, as constantly limiting spending can feel draining and build up stress.

Give Yourself Limits

Setting a weekly allowance is an excellent way to make sure you don’t break your budget. It might seem like an unnecessary restriction but dividing your monthly budget into weekly chunks makes it much easier to keep track of.

While this might feel like you’re punishing yourself for spending, it’s really a way to take control of your habits and make sure you stick to your budget. This might mean that you have more packed lunches instead of eating out during the week to stay within your allowance, or something similar, but these sacrifices are an important part of following a budget plan.

Set Yourself Goals

Whether your goal is to save for a specific large purchase, pay off debts, or simply to put some money away in savings, knowing how close you are to achieving your goal helps to keep you on track with your budget. This means that you have to have a set goal, something that you have to achieve for your budget to be successful

Guide to Small Business Marketing Budgets

From Visually.

To make sure you know your goals and how far you are on your way towards them, it is important to create milestones for yourself and the rest of the household, whether that’s simply in the form of a note written on the calendar or something bigger like a celebratory meal for achieving a savings goal. These are helpful to both mark your progress and stop budgeting becoming too much of a mental drain.

How to Start your Start-up

Many of us may be keen to leave the rat race and take matters into our own hands, but it can be challenging to know where to start! According to Forbes, 90% of Start-ups fail. It’s an intimidating statistic, but one to bear in mind if you’re thinking of setting out on your own business venture. There will always be hurdles, and no guarantee of success, but with the right plan in place you can avoid many of the pitfalls which new ventures commonly face, and hopefully build a successful company from the ground up, with our tips below.

Find your Niche

Possibly the most difficult part of starting a business is the most fundamental: having a great idea for a service or product. Some entrepreneurs will stumble upon an idea spontaneously, but this is by no means always the case. Fortunately, there is plenty you can do to find inspiration. One strategy is to seek problems which have not currently been solved. This can be a longer process than simply sitting down and thinking of ideas – it’s important to always be on the look-out for problems when as you live your day-to-day life. Every problem is a potential opportunity which could be the foundation of your new business. You might be able to improve on a current product or service or provide one who doesn’t yet exist. You might find that you have to narrow down your ideas – when doing this, it can be helpful to find out how high the demand for your product or service might be. You might consider mobilizing your network of friends, family, or colleagues by asking them to fill in a quick survey.

Research is Essential

With the wonders of the internet and public libraries, research is free. Before starting your business, it is important to ask questions like ‘is the market for this idea saturated?’, ‘who is my potential competition?’, and ‘how do I reach my target audience?’ You can access a huge amount of market data using resources such as the British Library’s Business and IP Centre. It’s based in London, but most of its data can be accessed from centralized libraries in other locations, such as Sheffield, Leeds, Birmingham, and Newcastle. The resource will give you access to industry journals, market reports, and company data. It’s amazing how much you can learn from how other, already successful companies.

Have a Plan

Making a business plan in the early stages of your start-up is vital. Having realistic, objective targets will help you stay motivated, and keep on track in the process of starting your business. Keeping careful records of your finances from the outset can also save you a lot of hassle further down the road. Making financial projections, based on your market research, is also vital to know where you stand. Having a well-researched prediction about how your business will fare is will also help you to attract the support of investors.

Be Careful with Credit

Bank loans are not your only option if you need to raise capital to start your venture. They can be difficult to get, especially in the early days of your business, and not always the best solution to financing needs. Crowdfunding can not only be a viable solution, but it can also help you to further gauge the future popularity of your business by seeing how many people are willing to support it financially. Relying on high-interest loans can also lead to debt problems further down the line. For more advice, click here.

Another potential funding source not to be overlooked is family members. If you have a well-planned, strongly conceived business idea, there is no reason to assume that your family will not prove willing to invest. It’s at least worth asking! Family members are also more likely to agree to more generous repayment terms. Avoiding interest payments can leave more money free to invest straight in your venture and, ultimately, make it more likely to succeed.

Naming can be Vital

Simple as it sounds, finding a relevant and memorable name for your business can be a real challenge. Since this will form people’s initial impression of your business for (hopefully) years to come, it’s worth taking the time to get it just right. Perhaps the biggest challenge start-ups face when choosing a name is to ensure that it isn’t already being used by another company. This can be a highly frustrating process! Start by drafting some potential names, and check their availability in these four categories:

  • Companies’ House
  • Domain Name
  • Trading as
  • Copyrighted

Finding a name which is available on all four counts will allow you to create a uniform brand presence. Securing your name is also an excellent boost to morale and motivating – making your business start to feel less like a dream and more like a reality.

Bringing it all Together

There is no single factor which makes a business successful; it is rather a combination of introducing a strong product or service to the right market at the right time. There is certainly an element of luck involved, but with careful planning and enthusiasm, you could soon be well on the way to making your venture a reality.

How to Get Out of Debt, 5 Simple Steps

Debt is a difficult situation to find yourself in, and can make you feel like you’ve lost control of your life’s direction. Don’t worry though, there are ways of taking control back, beginning with these five steps:

Step 1: Organising your Debts

One of the first steps towards successfully making it out of debt is to make sure that you know exactly what each of your debts consists of.

After making a list detailing amounts, interest rates, creditors, and current monthly payments the next step is to prioritize which debts should be paid off soonest. These should be the debts which will do the most damage to your life if left unpaid, such as rent or mortgage payments, electricity, water and gas bills, and Council Tax.

After these are paid off, the next debts to be prioritized should be those with the highest interest rates or lowest amounts, as removing these debts can be the quickest way to make a sizeable impact when it comes to your overall payments. A smaller debt is easier to deal with due to its size and once paid will no longer accumulate interest, while a debt with a particularly high-interest rate can become dangerous if left unpaid for too long.

Organising your debts in this way can make it much easier to deal with each of them, as it becomes harder to get overwhelmed when you are aware of each of your individual debts.

Step 2: Budgeting

After working out your overall payments, putting that money aside each month can be difficult without a detailed budget.

In making this budget, it is important to find out if there are any luxury items which can be cut out of your spending, as well as exploring the possibility of switching to cheaper brands for your essential items.

Public transport can also be cheaper than driving to work each day. Another way of cutting costs could be switching energy suppliers to make sure you are getting the best deal possible.  Switching credit cards for a better interest rate also lowers costs, though it is important to be aware that special offer rates often rise quickly after a low-interest period, and a card with a slightly higher but stable interest rate might be more helpful if you have trouble organizing your finances.

Another way of budgeting successfully is to find a way of increasing your income, such as taking on a lodger if you have a spare room or asking grown-up children to contribute towards rent/mortgage and bills.

Ultimately, budgeting comes down to personal choice, as some cuts could be more difficult for you to make than they would be for others.

Step 3: Seeking Debt Help

There are various ways to seek debt help, including Debt Consolidation Loans, Individual Voluntary Agreements, and Debt Management Plans.

Debt Consolidation Loans are used to pay your existing debts and therefore turn your multiple payments into one large monthly payment. This can reduce stress by lessening the planning needed to pay back each of your debts, and may also lead to a lower rate of interest than those you are currently paying.

Individual Voluntary Agreements are arranged through an Insolvency Practitioner and are a form of debt management agreement which freezes the interest on your debts if you pay an agreed amount over a fixed period to your creditors. Your debts will even be written off once the agreement is complete.

A Debt Management Plan is an agreement between you and your creditors to pay off your debts in installments. This is organized through a Debt Management Company, so your payments are made to the Company, who then spread them between your creditors, though a fee to the Debt Management Company may also be included in your payments.

All of these options have their own advantages and disadvantages, so it is important to seek professional, impartial advice when it comes to choosing a method for handling your debt. For more information on debt help available click here

Step 4: Emergency Fund

Establishing an emergency fund, no matter how small, can be helpful when dealing with debts, both in the case of an actual emergency and for creating a personal sense of security.

The amount you keep in this fund should be somewhere between three and six times your normal monthly expenses to be enough to cover the cost any crisis which could occur. While building this fund up can be difficult while paying off several debts at the same time, it should be part of your monthly budget. This may mean that you need to set a low target, to begin with, making small payments into your fund each month, but this will soon amass a healthy emergency fund.

This fund being in place can be helpful in the case of accidents, job loss or damage caused by natural disasters such as floods, as these crises don’t have to derail the process of repaying your debts if you have enough money set aside to support yourself through these events.

It may not be possible for you to build up a fund like this in your current situation but if it is, it is a recommended strategy for avoiding slipping further into debt.

Step 5: Take Care of Yourself

An important part of dealing with debt is making sure you remain in control of paying these debts. This is difficult to do when struggling with the mental and physical health issues which can be caused by debts, the pressures of the situation leading to anxiety and stress.

Talking through the situation with a family member or friend can help, though if you find this difficult, seeing a health professional about health issues caused by debt is nothing to be ashamed of.

Budgeting can also lead to being unable to participate in social events due to a lack of funds, leaving you feeling lonely and left out. Fighting this feeling of loneliness can be difficult, but there are many hobbies which don’t involve money and can help create new friendships and connections. Sports, in particular, can help you maintain your physical health and maintain a healthy social life.

While these measures may not deal with your debts directly, it is important to make sure you are in a fit state to deal with the pressures created by your situation.