Are You Draining Your Account Or Financially Floating? Overhauling Your Money Worries

by Magical Penny on June 10, 2019

From some people’s perspective, it would seem that saving money is a near impossible task now. Unless you are super rich, or entitled to every benefit under the sun, if you fall in that middle ground where you need to save money, but you either don’t earn enough, or can’t get any support, it just feels like you are financially treading water. This is when it’s time to start putting your brain into overdrive to see exactly what is going wrong. The answer could be very simple, but on the other hand, it could very well be a combination of factors that are impacting your ability to save or make money. Is your financial savviness due an overhaul?

Finding Out Why You’re Treading Water

When we earn a certain amount of money, which makes us not entitled to certain benefits or perks, the most frustrating part of it is that we are too rich to be entitled to anything, but also, not rich enough to be truly better off. And this is why we’ve got to start making alterations to our lives to ensure that we don’t tread water. As the cliché goes, we always live within our means. The modern-day means that credit cards are being thrown at us, which, to the untrained accountant, could very well do it as free money, with the added benefit of the card being interest-free for a certain amount of time.

The reality of the situation is that, even though we don’t have to pay it back right away, we need to pay off a certain expense right now. Whether this is an overdue water bill, or there are things that we deem essential, like petrol. But once we get into this mindset, this is where the slippery cycle of debt can get the better of us. But it’s learning how to identify the real culprits…

Is Your Home To Blame?

Our home can be a drainer of finances in so many ways. It could very well be due to the fact that we haven’t made appropriate renovations to the property so that we can save money on our heating bill, or it’s due to a larger issue, such as ploughing money into an extension; we’ve got to look at how our home is going to put us in the poor house eventually. Real estate is a worthy investment, but if there are issues at play that will drain us of our money over time, how can we fix these things? There are so many people that feel they’ve made a big mistake in buying a property. If this is a recent eventuality for you, and you only just got onto the property ladder after years of scrimping and saving, it may very well be a shock to the system to find that the property has to have numerous investments put back into it, not just to keep it up to code, but also to make sure that it’s a place that will stay valuable if you decide to sell up.

If you have a grand plan for what to do with your home between now and the time you decide to retire, there can be a few alterations that are worth thinking about. For example, rather than putting an extension onto the property, you could take advantage of one of the many granny flats available. This is a far more sensible investment and it gives you more control over the design and the layout. But in addition to this, it becomes an extension to the property without all that money being invested. Other investments to the property on more subtle, and can save you money over time. Keeping your home up to code in an environmental sense is definitely worth looking into, especially if you’ve got an old home that was originally a fixer-upper. If you haven’t insulated the property, and found that heat escapes, these are simple things for you to cut back on excessive bills.

Do You Need A Money Mindset?

But what if you feel you’ve covered everything? Is it down to the fact that you don’t have an appropriate mindset in which to make money? As we tend to live within our means, it could very well be a result of the money bubble you’ve put yourself in. We can see so many pieces of advice out there about how people got out of debt, by tackling certain methods, such as the debt snowball method, but they are useless if you don’t have the right mindset.

It’s not something worth beating yourself up about, because if you have struggled in the past, or there are new debts that you need to get out of, it can feel like an overwhelming tide that you just can’t swim away from. On paper, you may feel that you’ve got a well-paid job or the accoutrements associated with good living, but you still feel bound by debt. It’s not about the items you own that reflect your personality, but it’s how you choose to spend money. There’s a very simple way of checking this. All you have to do is go over your bank account statement, look at how much you spend in any given month, but do this in comparison to how much you really earn. If they are evenly matched you’ve got your answer! It’s at this point where you need to change your attitude to money. You can either choose to continue down the path you are on, or make appropriate steps to ensure that you living appropriately within your means. One approach that may prove to be a wake-up call would be to see if you can follow the 50/30/20 rule.

In essence, this is all about using your money (after tax) where 50% goes on your “needs,” such as the car payment, groceries, housing and utilities. 30% goes on your “wants,” like your hobbies and shopping, and 20% goes in savings. If you can follow this rule, it’s an automatic way to budget your life. The tricky bit is differentiating between your needs and wants. If you can follow this, you won’t go far wrong. In addition to this, there are apps you can use, such as Plum, which will use algorithms to help you tackle your budget, and even put money aside for you based on the information you provide. That way, if you really do think that you struggle to save money, you can always be surprised as to what can be put away, no matter how little it is. Mindset is all about altering your attitude to money and this isn’t just in terms of spending it, but it’s about seeing where the essential payments are in your life.

Is It Time To Diversify?

It seems that everybody has more than one job these days. Whether this is due to necessity, because they lived in an area of great expense, or due to personal dissatisfaction, many people are now performing more than one job. This is something that you can take inspiration from, not just so you can earn a bit of extra cash, but you can also get a bit more enjoyment out of this thing you do part-time. Naturally, we can all feel exhausted by the very nature going to work Monday to Friday but if you are struggling under the weight of your finances, getting some sort of side hustle or part-time endeavour could prove to be the answer.

Sometimes we need to find the right part-time job that suits our life. You may think about becoming a landlord, especially if there’s a spare room in your property, but if you are not so keen on this approach, you’ve got to find something that can earn you money, but without overexerting yourself. This may seem like an impossible task, but there are so many jobs that can be performed at home, online. Companies like Appen or Pactera provide work at home opportunities, and if you could find the right job, it’s something you could do on top of what you already do, and because they will pay you per task, this means that you are able to do it around your primary job, as well as around your lifestyle.

It’s Not Easy…

Living in the modern world means that’s there are constant stresses, and financial worries are, undoubtedly, at the top of the pile. If you find that you’re just hitting a wall, and whatever you’re doing isn’t resulting in any money been put aside, or there are a bunch of factors that are impacting you, it’s important to find out what these problems are, not just so you can minimise your debt right now, but begin to imbue yourself with habits and attitudes towards money that will potentially save your life. Money is one of those all the essential components, but while there are people like minimalists doing their best to avoid excessive expenditure, when we live a life that, at the very least, we’ve got to pay through the nose just to keep afloat, we’ve got to start putting our money saving abilities into overdrive.

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Helping Your Kids With Uni When You Can’t Fund It All

by Magical Penny on June 10, 2019

Going to university is an exciting chapter in your child’s life. It’s an opportunity for them to further their careers, but also a chance to meet new people from all walks of life. Everyone’s position and background in university is unique, and while some parents can afford to fully support their kids through university, for many it’s simply not feasible – and that’s ok.

But just because you can’t afford the tuition fees, living costs and other expenses that come with your child going to university, doesn’t mean that there aren’t other affordable ways you can help them financially.

Take a look at some of these ideas for helping your kids at uni, even when you can’t fund it all.

Help them with their rent

Students will be faced with a whole new load of financial responsibilities when they start university, with one of them being rent. The reality of university is that a maintenance loan only goes so far, and it often just about covers their rent. Even if you can’t afford to pay their full monthly rent, you could try giving them a certain amount towards it. The extra boost will make a huge difference and can ease some of the pressure of meeting this new cost.

Make sure they’re eating

Even though your child is away at university, you’ll still worry about them. One of the things that you’ll want to make sure if that they’re eating well. Many students will favour nights out and packets of noodles over eating good meals but this is where you can step in. By buying them gift cards to do their food shop, or doing an online shop for them, you can make sure that the cupboards are stocked and put your own mind at ease too. You can also teach them how to cook some great student meals to tide them over and ensure they’re not just eating ready meals and junk food.

Cover some of their other expenses

When you’re a student, any form of financial help is greatly appreciated. Could you help to ease some of your child’s other expenses, like their phone bill or fuel costs. By searching around for young driver insurance, you can find a great deal and help your child to cover some of their car costs. This will not only help them free up a bit of money each month, but it also means they’ll be able to afford to drive back and see you now and then too!

Having a kid at university is an exciting and proud achievement, but it can be stressful for families who aren’t well off financially. Fortunately, there are grants and scholarships available that could help your child during their time at university and make sure they have the time of their lives. Helping them out in small ways and teaching them how to manage expenses at uni are simple but effective ways of providing support, and your child will appreciate everything you’ve done for them. University will teach your child some great life lessons, and learning to manage their finances will be one of the most important.

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Does Your Dream Home Exist Or Should You Create It?

by Magical Penny on June 5, 2019

If you already have an idea board and know exactly how you would like to live your life in the future, it is important that you exhaust your buying options before you decide to self build. While there are loads of land offers available, without experience, you will be struggling to manage a big project, such as building your own home. Below you will find a few tips on how to decide whether to buy or build.

Renovation Properties

Just because you haven’t found a property that is perfect, you cannot exclude buying. You can actually go into property development without starting from scratch. Just look for low cost properties with a great potential and use your imagination to turn it into the perfect place to live for you and your family. This is likely to be a cheaper option than trying to tick all the boxes or spending years building a house.

Self Build

There are, however, some benefits of self build, too. You can get your ideas to come to life and tailor the home to your family’s needs. If you have some particular expectations that you cannot find in any property you have visited, this might be the right option. You will, however, have to be prepared for the challenges of managing a team of contractors and controlling your budget.

Economical Considerations

Some people choose to renovate or self build to make their lives fully sustainable. You might want to use sustainable materials or make your home more economical or greener. It is important that you focus on the long term return on investment and the resale value of the property. While the majority of people build  a home to live there forever, your kids might not find it suitable for their lifestyle.

Your Budget

Before you decide whether or not you should invest in a renovation property or land, you will have to create a budget for both options. You can check out prime locations, such as Wyndham Ridge and find out about the total cost of development, such as permissions, getting connected to the grid, and tax. The last thing you want to do is stretching your budget too far and getting into debt.

Location

Independent of the interior design that can be flexible, even if you are buying an older house, you will have to take into consideration the road networks and the local amenities. You might be happy at the location right now, but what about 10-15 years from now? Consider the times when your kids will have left and you will have to find your days after retirement. Would it be the perfect place to live? If the answer is yes, the decision is simple.

Relocating can be stressful and challenging. If you are currently at the stage when you are trying to decide where to live, and whether to embark on a property development project, you should consider the above options and ensure that you are not spending beyond your means.

 

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What Does it Mean to Have Financial Security?

by Magical Penny on June 3, 2019

‘Financial security’ is a phrase we hear all too often- but what exactly does it mean, and how do you know if you’ve reached it? It’s easy to assume that it comes as a result of getting your dream job or winning the lottery, but actually it’s not the case. Here’s how you know you’re financially secure- and you may well be doing better than you thought.

You can afford what you need in the here and now

Being able to afford what you need, week to week or month to month doesn’t need to mean having lots of cash to spend. It simply means you’re able to make ends meet- your bills are paid, you’re fed and can comfortably live without running out of money. It might seem as though in order to achieve this that you need to start earning more, but it’s not always the case. Any extra you can get is a bonus, but a lot of it comes down to how you spend. Have a budget in place and stick to it. A good way to manage your bills is to open a separate bank account for them. Set everything to come out via direct debit, and every time you get paid you know you have to transfer a set amount into that account to cover everything. You don’t end up accidentally spending back onto the account. If you often find yourself getting to the end of the month and thinking ‘where has my money gone’ where you have nothing to show for it then start being accountable. If you go on a night out with friends, take a set amount of cash instead of your debit card so you know you can’t overspend. If you know you’re guilty of ordering lots of takeaways then learn to cook and start preparing more food at home. Go through your bills and make sure you’re getting the best deals- this will usually involve switching companies to make the most of new customer deals. All of these things add up, and free up cash to be better spent elsewhere.

You have a buffer against unexpected bills and expenses

Being able to afford what you need in the here and now is the start of financial security. The next step is planning for any emergencies. A broken down washing machine, a failed car MOT, an unexpected bill landing on your doorstep- all of these things can cause serious money issues if you aren’t’ prepared. From having to borrow from family and friends to taking out lines of credit like credit cards and loans to cover what you need, it can quickly spiral into debt. It’s important that you always have a buffer in the bank- a rainy day fund so to speak. This should be separate from any other savings that you have, and only dipped into when it’s a genuine emergency. It’s up to you how much you keep in there, but at least a few hundred will give you a starting point even if it ends up being something more expensive. Another way to buffer yourself against unexpected bills and expenses is by getting insured. Home insurance, pet insurance, dental, medical and even specific insurances like boiler and appliance insurances can all prevent you from ending up out of pocket. You have to pay a little extra each month to cover them, but if the situation arises where you need to use them you’ll be so glad you took the plunge. Be sure to shop around as insurers are very competitive, you can snag prices cheaper than you might think. Just make sure to read the smallprint so you know what your policy includes. The last thing you want to do is try and make a claim and realise something important has been excluded. For example, in pet insurance policies this could exclude all dental work meaning if your pet needs teeth removal or cleaning then it’s something you’ll have to pay for separately. Excesses are another thing to check, excesses set too high can sometimes make it pointless claiming.

You’re prepared for the future

Having a buffer against unexpected expenses is useful in the short to medium term- but when it comes to financial security you want to be prepared for the long term too. This could mean getting your pension in order, creating an income stream for once you retire and making a will. When it comes to earning money when you’re no longer working, investments can really pay off. Purchase stocks and shares or property for example and these can continue to earn you money each month with no real hassle to you. Another way to go about this is to establish a business, when you retire you can simply hire someone else to do your job and live off the profits. These things can take a long time to set up or save for, so it’s important to do what you can, as early in life as you can. If you want to buy properties and live off the rental income for example, you could take out a number of buy to let mortgages. Once your tenants have paid the mortgage with their monthly rent cheque, everything from there onwards is pure profit. It’s difficult to imagine getting old, but it is important to plan for it. It will roll around one day (if you’re lucky!) and you need to ensure you can continue living the lifestyle you’ve become accustomed to.

What does financial security mean to you?

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Which Issues Should You Watch Out For In A Property Survey?

by Magical Penny on June 3, 2019

When you are in the process of buying a new house or apartment, you will need to get a survey carried out on the one that you’ve got your eye on. This survey will be carried out by a building expert who will have a good idea of what kind of problems and issues to look out for in properties. They will flag any issue up so that you are aware of it. If there is a major issue that could be expensive for you to fix, it could be worth starting your search over again and looking for a different property that doesn’t need quite as much work doing to it.

Not sure what you need to look out for in your survey report? Here are some of the major issues that should cause you some concern.

Damp And Mold

Lots of old homes have problems because of their poor ventilation. These issues are usually all to do with damp and mold. Because a lot of moisture will build up in the air due to the lack of ventilation, mold and damp is a lot more likely to occur. If the damp isn’t too bad, then you should be able to easily remove it. If it is quite extensive, then you might need to completely damp proof a room, which could end up very costly.

Subsidence

Lots of guide to homebuyer surveys will warn you about the potential of subsidence in properties. This occurs when there is movement in the ground below the house and this causes the foundations to move. Even though all properties will experience some movement, it can cause a problem in houses that have poor foundations, or the movement is excessive. Most people will start again with their house search if the subsidence is quite bad as it is one of the most expensive house repairs.

An Old Heating System

The property survey should also flag up an old heating system. Even though it might still be in good working order, it’s still something you will need to know about as it might need quite a few repairs in the near future. It might also need to be completely replaced within a couple of years, which can also end up being very expensive.

Poor Electrics

As well as a poor heating system, you should also be notified about any old or damaged electrics in the house as well. This is more just to make you aware that there might be a safety issue that you need to be aware of. Thankfully, most electric work isn’t too expensive and an electrician should be able to take care of it all for you.

Roof Problems

Most people forget to check the roof of a property when they view. The surveyor won’t forget about this, though, and will take a good look at the roof to make sure you are aware of any potential issues.

As you can see, there are quite a few things to take note of in a property survey when buying a house!

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Work Woes – How Can You Earn More From Employment?

by Magical Penny on May 24, 2019

Just about all of us would confess that more money would make our lives easier. Even if you’re not living on the breadline, chances are you find it a struggle making ends meet from time to time. Here are a few ways you can earn more from your employment!

Ask for a promotion

One of the simplest ways you boost your income would be to earn more money at work. Of course, this is easier said than done- but if you’re working towards a promotion and you feel as though you’ve earned it, speak to your boss. When pitching the idea it’s wise to remember that you should state the reasons why you’ve earned it or deserve it, and not why you need it. Prepare yourself for them to say no, but you never know- you might get lucky. Even a small pay rise can add up and make life that bit easier for you. Not only will a promotion mean more money, but career progression can be incredibly satisfying. Everyone wants to level up and do well in their work.

Go back to school

If you’re stuck in a dead end job with no career progression, or you’ve gone as far as you can go in your role, it might be worth considering a complete change. The first way to go about this would be to get back into education, a degree in a relevant subject can help you to open doors that would otherwise have been closed. You don’t even need to quit your job and go to university full time if you don’t want to, with so much online education it’s something you can do while you work until you’ve completed your course. That way you can start applying for jobs right away and there’s no period of unemployment while you wait for the perfect role to come along. While you’re studying, it’s also worth doing some voluntary work experience too in the area you plan on getting a job in. It can help you stand out from other candidates and boost your employability.

Work from home

The thing about earning money as an employee is that you’re always going to get your set wage. Unless you have time off or do extra hours, your paycheque is going to be a similar amount each month. While this can be a good thing as it means financial stability, it also means you’re limited on what you can earn. If you run a business on the other hand, your earnings are uncapped. Sure, you run the risk of not making enough money (especially in the beginning) but if you’re lucky and your business does well, you could potentially earn a lot more. If you have a business idea, start with doing some market research. Set up your office from home- companies like 3d visuals can really help with this- and then register as either self employed or a sole trader.

Do you have any tips for earning more money at work?

 

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Not Waving But Drowning, in Debt

by Magical Penny on May 23, 2019

Using credit cardsWhile there’s a lot to be said for staying debt free and never borrowing a penny, that is very often not the reality for many of us. Whether we take on a hefty mortgage or just rely on a credit card to get us through each month debt, managed or not, is often a part of our lives.

But it’s this unmanaged debt that’s the real issue and is something of a modern scourge. Our debts mount up, we borrow more to pay them back and very soon we’ve snowballed into a situation where we have debts stacked upon debts, stacked upon debts.

In this article we take a look at one of the leading sources of this issue: credit cards.

How it Starts

You’re a professional, you have a steady income and you have a bank account. It’s at this point your bank offers you a credit card with them. This feels ok because it’s your bank, not some internet offer and you go with them. The arguments for buying more and more begin fairly early on with advertising that convinces you buying large purchases will lead to cashback, special offers and so forth.

Fairly soon you’ve bitten off more than you can chew, maxed out your card and are in the process of paying off the interest each month and very little in the way of capital.

Then the next offer comes along and you promise yourself you’ll be more careful and besides your washing machine needs replacing, so…

It’s easy to see how it happens but not so easy to deal with once you have two, three or more cards each at their limit.

How it Stops

It stops with you paying off a series of debts each month but never really getting anywhere. It might sound counterintuitive but if you’re getting nowhere simply paying off high interest on your cards, it might be time to roll all your debt onto a much lower, or interest free card and start paying back much more on one card each month, taking you past the interest only stakes.

The debt that was going nowhere will start to gradually decrease and you will begin to see some light at the end of the tunnel. Just cut up the card to avoid adding more debt.

If you prefer to take out a loan to do the same kind of thing and avoid spending temptation, make sure you do so with a responsible lender and never borrow any more than you can realistically afford to pay back each month.

Getting out of credit card debt is the first step towards a happier and more financially stable life. Lose those payments that keep you tied down to high interest and manage your debt so that you finally get free from credit cards for good.

Give your finances time to recover and it will help your credit score as well as relieve you from the stresses and strains that being in debt can bring.

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How You Know When Its A Hot Property

by Magical Penny on May 22, 2019

Buying a property is a considerable investment, it’s a big decision, a huge commitment and not something that you want to do on a whim or make a mistake on. So, if you’re looking to make money from either renting a property out or flipping a property, then you need to be sure you’re spending your money on the right one. But how can you find out? Make sure you have the time to spend researching and looking into it, it will be worth it in the end. Set aside time for it and don’t expect buying a property to be something that you can just do overnight. It takes time, it takes planning, it takes research and it takes a lot of thinking. Don’t underestimate it but remember that anything worth having usually doesn’t come easy.

Spend Time In The Area

If you’re looking at a particular area or a specific property, either way, location is one of the most important things when looking at buying a property. You could fall in love with a house, but if where it is isn’t safe, or near to any amenities, then it might be challenging to rent out. Spend time in the area and work out for yourself what you think. What is the public transportation like? The schools? The shops? Is there a post office? A library? A park? A medical centre? Is it near to a big city? Go there, walk around, have a look, get a real feel for the place, and see if there are any red flags for living there. It can be really useful also to find out how many houses are currently available for rent if the area has an unusually high number this could either be a sign that there is a seasonal cycle or that the neighborhood is in decline, either way, you’ll need to find out which. A large number of available rental properties can mean you have to lower rents to attract tenants and a low number means you can raise the rates. You should, however, find out what the average rent is in the area.  

Talk To People

If you have seen a property that you quite like, it’s in your price range, it seems like a good area, in fact, it might seem like so good that you don’t understand why it’s for sale. Then this is where you need to find out. Don’t be put off by the fact it might seem too good to be true because you can get some fantastic deals when it comes to property. People sell their houses for all sorts of reasons; it doesn’t mean there’s anything wrong with them. So, get talking to people, the owners, the neighbours, local estate agents, and local renters and landlords. All of these people can provide you with valuable insight into how much people will pay for rent, what kinds of people look to rent in that area, how long they might stay and basically whether it will be a good investment for you or not. Find out from the locals if they feel the area is safe, ask about the crime rate and if you don’t feel you’re getting the full story, then you can check crime statistics with the local police or the library. See if you can find out if the crime is on the rise in the area or if it is decreasing. As well as crime, be aware if they area is susceptible to any natural disasters because insurance is another expense that you will have, so you will need to know how much it’s going to cost you. If an area is prone to flooding, then the coverage costs can affect your rental income massively. You want to make sure that you are guaranteed rent, so do your homework and get asking questions.

Think About Who You Will Rent To

Do you want to rent to young professionals? Or do you want to rent to families? You might even want to rent to students. Each different type of renter will desire different things and potentially different areas, so if you are particular about who you will rent to, then you need to buy somewhere suitable for your preferred tenants. For example, if it’s a family you want to attract, then you’re going to want somewhere with a decent amount of rooms. If it’s students you’re after; you could perhaps have a cheaper but larger house with a large number of rooms because you can rent out each room individually. Or if its a young couple you’d rather have as tenants then you’ll want a smaller house. Again, for all of these options, the area is crucial. It is a good idea to look at the job market in the area if there are growing employment opportunities as this will attract more tenants. Again you should be able to find out this information from the local library or local newspapers or from the council. If a big company has recently moved to the area, then more could follow, but even if not, workers definitely will. This could make house prices go up or down, depending on the nature of the business.

Look Ahead

Before you sign on the dotted line and put your deposit down, make sure you have thought about the future. See if you can find out from the council planning department if any new developments are coming. This could indicate that the area is set for growth but also a lot of construction work could cause upset and an inconvenience to your tenants, new houses could also affect the property prices of the existing properties. Whatever you do, spend time doing your research thoroughly. It will save you time, money, and a massive headache in the future.

 

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A Beginner’s Guide To Becoming a Landlord

by Magical Penny on May 14, 2019

stamp duty change 2016Private rental prices is something that has been growing pretty steadily over the years. So if you are in the property market or looking to get into it, then this can only be good news. Becoming a landlord can be a nice way to create a passive income, and it is also a pretty clever way to protect your assets. Savings rates have been things that have dropped to a low rate, but house prices can keep rising.

Another reason why becoming a landlord can be a good idea is that it can be a good revenue stream. It has been estimated that private sector landlords earn well and there does continue to be demand for it. Plus, with the rise of renting options like Airbnb, then it does help to create different revenues for creating income. The thing is, though, becoming a landlord is a real commitment, but it can be one that is simple to manage in your spare time. So here are some of the things that you need to be thinking about if you are planning to get into property.

Getting Started and Questions To Ask Yourself

There are some questions that you need to think about when it comes to becoming a landlord. So here are the things that you need to ask yourself:

  • Will you rent unfurnished or furnished? This is important to think about as there are good and bad things for both. You can charge more for a furnished property to cover the costs of furniture, but then there are costs associated with the wear and tear of the furniture, as well as the wear and tear on the home. It can be a good idea in student areas, but high-end items probably aren’t the best idea.
  • Will you allow pets? This is something that you need to know right from the start, as many people do have pets. Will you allow them? You could charge more if they have one, as there is more risk of things being damaged.
  • Is smoking allowed? When you have a home with a smoker, it does become very obvious and can cause damage to the walls, for instance. So you need to know right from the start what you want to do.
  • Will you do it all yourself or use a letting agency or management like lelandcherry.com? A letting agency may be something that is an extra expense, but they can take care of a lot of things for you, especially if you want this as a side hustle to generate an income. So it is all things that need to be thought about and considered.

Costs Involved

There are going to be costs involved with property, and there may be more than you had thought of before. But as long as you work out what you would be paying for all of them each month, and the tenants costs cover them, then it will be worth doing. If not, then you might want to think again or choose a property in a cheaper area. Some of the costs to consider are:

  • Repairs
  • Mortgage repayments
  • Insurance
  • Legal fees
  • Cleaning and servicing costs
  • Furniture

 

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The External Financial Threats Small Businesses Face

by Magical Penny on May 2, 2019

Try as you might, there’s no getting away from some external threats in business.

It’s okay for large businesses as they have a plethora of legal teams ready and waiting to take on any new case. However for small businesses you’re kind of on your own and thus you have to pick and choose your battles more carefully. It’s highly unlikely that any small business will never face some kind of financial threat that comes directly from the outside. No matter how well you plan, how well you execute a project, there will always be something that could be used against you. Clients may turn on you as well as customers and try to take you to court over any kind of liability claim. You rivals could undercut you and present to the world a cheaper product that has actually been modelled using some of your designs. Local authorities also pose somewhat of a threat as if you don’t comply with the local laws such as zoning, planning and building permission then you may also be taken to court. But, is there any way to create a buffer zone between your business and these threats?

Devil’s in the detail

It’s not common but it’s also not uncommon for a client relationship to turn sour. Usually, all the creases are ironed out in the beginning. Yet, if the contract you both agree to is not properly read and accepted by both parties, it could turn nasty down the line. For example, the fine print will always go into detail about the numbers and the methodology that will need to be applied by a certain or both parties. This could be in the way of agreeing to produce a particular amount of products in the manufacturing factory or perhaps correlating market price drops into the pricing strategy as and when needed. You should try everything you can to avoid having the tables turned on you by a client and that means insuring the agreement.

Take a look at a contractual liability insurance policy that can back up the agreement you have signed. However this can only be attached if both parties agree to these terms. Yet, any company that doesn’t want to enter into a contract that is insured is most likely not even worth your time. Sometimes a contractual liability insurance policy will have some exemptions. There may be some inherent leeway which may not offer protection against the key part that you wish to insure. Therefore you’ll need to find a policy that fits your needs or essentially hire a team that will forge the contract exactly to your liking. Again, the client also needs to agree to this so be weary of their disagreements.

A stand alone risk

Working for yourself is truly liberating. You’re not bound by any company lurking over you and you’re in charge of your professional life. This is why many people who find a passion outside of their normal work, tend to head off in their own direction. Setting up a business, they begin to be their own boss and take on new challenges for the first time. As ever this not fraught without risk. For example if you’re a personal trainer you are truly an independent trader. You’re using your skills to help clients become better physically and that has its own stand alone risks. For example, they might break your equipment by improper usage. Maybe they didn’t listen to your instructions and they break something that’s worth a few hundred dollars. To prepare yourself for this and not make a loss ready these Personal training insurance reviews.

Other risks that you might run into are when a client claims sexual harassment. Personal training is all about working with a client and helping them workout. Inevitably, this means touching them in order to maintain proper posture and range of movement. Unfortunately, some people see this as an opportunity to bring a business owner down while benefiting themselves. Other risks are the stereotypical claims of professional negligence which many small business owners have put against them. This kind of insurance saves you from having massive financial holes punched through your business.

There are plenty of internal threats to your business and external threats just add to the headache of running a business. However if you take the proper precautions you can save so much money. Be aware of some clients that do not live up to their end of the contract, and attach an insurance policy to the contract to avoid this happening without repercussions. If you work for yourself in a singular capacity, then insurance plans for your occupation of industry are great idea too.

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