Why a Savings Account is Important

by Magical Penny on February 13, 2017

If you’re in the first stage of improving your finances, just getting to the end of the month without going into debt, or further into debt, is a challenge in itself.

A months down the line on your money journey you might have paid off your debt and now have some spare money to save but you’ve got lots of different money goals that all need to be funded somehow.

Later on in your wealth building journey, you may have saved a big pile of cash and be investing regularly in your future.

However, regardless of where you are in your money journey, you need a Savings Account .

In Debt? You Need a Savings Account

If you’re in the first stages and don’t feel you can afford to have money ‘saved’ each month, then, perhaps paradoxically, it’s even more important that you do have some money saved, separately, away from your main current or checking account.

Of course I’m not telling you to go hungry or not be current on any debt repayment, but it should be your priority to get some money saved, and make sure it’s segregated away from your main account, even if it’s only a small amount. Many savings accounts let you open up with £1 or $1, anyway.

It’s not embarrassing.

It’s not silly.

It’s a start for you to build upon.

Over time you can top it up and when a real emergency strikes you’ll be happy you had your savings (rather than being forced to use expensive debt). Keeping them separate also goes some way in stopping you from spending the money on things that aren’t real emergencies.

Out of Debt? You Need a Savings Account

If you’re a little further down the road on your money journey you may be feeling the pull of different savings goals. You might need several savings accounts to help you keep track of where you are up to on each goal. Or you might prefer the single-minded focus of saving for one thing at once. Regardless of which approach you take, the discipline of regular saving can have a huge impact on what you can achieve financially over time.

ImportantBuilding Wealth? You Need a Savings Account

If you’re further down the road still, you might feel you have graduated away from savings accounts as you’re now more interested in bigger growth opportunities such as investments.

But no! You still need a savings account, filled with money – not for the prospect of growth, but rather for future emergencies and opportunities. You might be losing money in real terms due to inflation, but that is merely the cost of having money available to you quickly to allow you to pounce on great opportunities and recover quickly from bumps in the road. It’s worth it.

You don’t save money for the returns.

You save money to provide safety, for the funding of dreams, and for lowering risk in your life. You are even protected up to £85,000 in the UK should the financial institution you’re saving with go bankrupt.

Look after both the present and future you, and top up your savings account today!

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Household Bills That Are Totally Out Of Control

by Magical Penny on February 11, 2017

In the UK household bills are getting totally out of control. In 2016, prices rose by more than 9.7 percent, and in 2017, they could rise still further. According to data from comparison websites, the average home now spends more than £2,223 on bills, up £200 from their level in 2015, massively above the official rate of inflation.

So what is driving all these costs higher?

CarCar Insurance Costs

Right now, car insurance costs are totally out of control, thanks to the fact that the Treasury has been continuously doubling the amount of tax that people have to pay as part of their car insurance premium. The so-called Insurance Premium Tax has been increased more than three times by the government since 2014 and will double again from 6 percent to 12 percent in June 2017. According to experts, this will increase the average cost of insurance by £109 a year compared to just two years ago.

The good news is that motorists can hit back against yet another government tax hike. Shop around for good deals through companies like Money Expert and check to see whether there is any way you can save on your massive bills.

It’s also a good idea to pay for your car insurance in one big lump sum. Usually, this is the cheapest way by between 10 and 20 percent of the final bill.

rising costsRising Gas And Electricity Prices

Wholesale energy prices have already started rising this year and large energy providers, like Eon, have already said that they will hike prices. At the same time, prices at the pumps are going up, relative to people’s incomes, meaning getting around by car is about to get a lot more expensive.

The average UK household spends around £1.066 on energy each year. Mark Todd from Energy Helpline says that energy prices are likely to rise by more than five percent in 2017, thanks to shortages in supply. This means that the average family could see an extra £53 added to their bill, well above the rate of inflation (as always).

 

Again, one possible solution is to try to find a better deal on price comparison websites. A Sun investigation found that most families weren’t on the cheapest tariffs and that they could save up to £389 if they switched energy provider.

calculating costsIncreasing Mortgage Rates

There was some good news for regular families in 2016: mortgage rates have never been so low, meaning that taking out a big loan and getting the first step on the housing ladder has never been easier. With that said, rates aren’t likely to stay low forever., Over in the US, Janet Yellen has already raised the base rate twice, and she’s signalled that she’s willing to raise it further this year. Since western central banks tend to move in tandem with each other, it’s likely that the Bank of England will also tighten credit markets.

 

Back in August last year, the base rate was set at 0.25 percent, but the Bank of England has repeatedly suggested that rates will rise, especially if inflation is going up.

 

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Sell Dreams, Not Property

by Magical Penny on February 10, 2017

remortgage house loanA real estate agent has a difficult job. It’s a job that requires a huge amount of attention to detail. It’s a job that requires the realtor to really think about what their buyers, sellers and tenants want. If you don’t have a great attention span then it’s almost impossible to become a successful real estate agent, and it’s mostly because novice real estate agents are taking the wrong approach when it comes to pitching a property to a prospective buyer.

Understanding dreams

When you invest in property to sell or rent out, you’re going through the same logical thought process as someone who is picking out cucumbers for their salad—you have a dream. The dream of the person buying a cucumber for his or her salad just wants a fresh side to go with their dinner. The person investing in property wants to make money by reselling it after a few developments or renovations. In other words, when we spend money, we dream of the uses we’ll get.

If you’re a parent of two living in a cramped home with your partner, then chances are your dream is to save up money and move into a larger home to accommodate the family better when they grow older. You don’t want your children to be sleeping in the same room as you forever, and that playroom you’ve created for your newborn baby is going to be useless after a while and will require renovations to repurpose it.

If you understand dreams, then you can pay close attention to your prospective clients and understand their dreams too. Why does this smart looking businessman want to rent out this large office? What plans does he have? What do I know about his business that will help me make a sale? And the same applies to families. If you see a couple and the wife has a bloated stomach, then chances are she has a baby coming and you can use this information to your advantage. That couple has a dream of starting a family together, so you should apply that knowledge and sell them that dream.

 

houseSelling the right property

Selling a dream is an easy concept to remember, but how can you actually go about doing it? Here is a couple of quick tips that you can follow, but please remember that it varies from situation to situation and no two buyers are the same.

For starters, deduce whether your client wants to invest in a long-term investment and buy a home, or if they are looking for apartments for rent. If someone is looking for a home, then they will either be open to imperfections because they can always renovate the home to how they want it, or they will demand absolute perfection so they get their money’s worth. If someone is looking to rent an apartment, then you want to make sure it’s furnished and has all of the nearby amenities and furniture that they need.

Speaking of amenities, it’s important to pick homes that are close to certain facilities and stores that are tailored for the people you’re selling to. For instance, if you are speaking to a couple that wants to start a family, then you want to pick a location where the nearby schools are highly regarded with nearby childcare services and clubs. If you’re selling a property to a business professional, then think about internet connectivity, public transport and nightlife.

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A Small Invest-igation: What Should You Invest In?

by Magical Penny on February 8, 2017

ftse100The key to your future is saving and then investing these savings. While putting away a modest sum of money away each month may seem like a thankless task – this modest amount of money can build into something that can truly change the course of your life.

We wrote about the importance of saving earlier this month. Saving is key, and you need to try to put money away and if you can’t save your excess between your spend and income, feed a designated amount of money into a savings account:

“Most people know they should have some sort of plan as to what they do with their extra money. Yet the problem is that a lot of people spend years procrastinating. Now is the time to put a stop to that. Instead of looking to save up your ‘leftovers,’ create a budget and start allocating money that is designed for your future development. Whether it’s money for an ISA, for investments, for tackling debt, or anything else. So long as you’re automatically paying out those allocated funds before you start spending, you know that you’re progressing.”

It’s healthy to be conservative with your cash. Don’t waste your money as every penny wasted is a penny less that you have to work for you in the form of a solid investment. Good spending habits can translate into good saving habits and thus good investment habits. Building these habits are key before you think about investing the money you’ve spent a lot of time saving up. Saving your money is a safety net, but investing is a catapult that could shoot you into a better place.

One thing you’ll always need in investment is advice and guidance, and thankfully there is absolutely no end to the amount of advice available to you right now. That’s a great thing.

financial newsEducate yourself on investing

There are three amazing books you can get right now that can teach you to think like an investor. The Margin of Safety by Klarman is an incredible book authored by the leader of a fund and offers relatively recent examples. The Intelligent Investor by Graham is a good go to manual that can help frame your thoughts. Graham is considered the master of value investing, and there are editions that have been updated for today’s investing. It sounds bad, but You Can Be A Stock Market Genius by Joel Greenblatt is also good because it identifies lots of investment situations and what to do in those situations. It is a fair bit of reading material, but it’s better than investing with a blind eye.

Before you begin, you need to realize that the market is not your toy. Unless you’re a prodigy of the likes the world has never yet to see, you are not going to outsmart the market. People will tell you that you can, and they will profit from you. Use advice, make sensible investing decisions and don’t put all your money into one opportunity.

So, what can you invest in?

There are a lot of options, and all have their benefits. You can buy real commodities like oil and gold; you could purchase foreign currencys and exchange them, you might invest in the real estate market and buy a property. You may take the typical route of buying shares in companies on the stock market and selling them at a high for profit. There are plenty of choices for you.

Saving in itself represents an investment, but interest rates can vary and in most cases are pretty disappointing. Saving becomes investing when you are granted interest on your savings. If you were to save two-hundred dollars a month into a savings account that granted naught point five annual interest, you’d make $24,614 in ten years of saving. That 614 dollars is made up of the interest – it’s something, but it’s pretty pitiful. If you did the same investing in something that offered a seven percent return you’d make $34,404 in the same time. Ten thousand more. That’s why research is key.

You can invest in property which represents a solid investment as even though the value fluctuates, rent payments do not so you can hold steady until the value returns. Plus, you only really make a loss if you choose to sell for less than you paid. Property provides a steady source of income, but you need to spend on an ongoing basis to care for your property so it can fulfill the needs of your tenants. You can invest in all sorts of real estate from apartments right through to commercial properties.

investingStocks are a bit harder – you need to be on top of your game.

Growth stocks need to be bought at a low price and sold on for a profit. These values change fast, so your finger really does need to be on the button. Dividend stocks are safer as you’ll be buying from stable, large companies that will pay you back a share of their profits. Your stock can grow large and wealthy as you support a big company and you’ll be paid dividends which could be worth a lot in the long term.

If you’re more casual, a fund like the Vanguard S&P 500 ETF invests your money in a bunch of large and successful companies for a fee and this fund does extremely well and isn’t a massive gamble, like some other investment options. If that doesn’t sell you on the idea of the Vanguard fund, then let it be known that Warren Buffett recommends it.

There are also plenty of ‘Managed’ funds that do the research for you, but even the ‘Managed’ funds need managing, and many use financial advisers to do the research and due diligence for them. If you’re in the UK and need a financial adviser recommendation, email me (adam AT magicalpenny.com) and I’ll give you some personalised recommendations.

There’s so many avenues in which you can put your money in and the right one is all of them. Diversifying your money is the key to success and saves you from a disaster if one of your options collapses or decreases in value.

Be smart, educate yourself and invest your money!
Read more investing articles here on Magical Penny

 

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Losing Hope: House Buying Types For Young People

by Magical Penny on February 8, 2017

remortgage house loanFor many young people, the prospect of buying their own home seems like a far-off fantasy, which may be achieved if circumstances go in their favour. This leaves a lot of people without a home of their own. Instead, they have to pay someone to stay somewhere. Of course, this is a great way for a young person to move out of their home quickly. It allows them to make sure that they can afford to live and have somewhere to stay. But, as time goes on, this can become a big problem.

Renting property can become a trap. With a lot of your money going to rent, you won’t have much to save for a new home. So, the longer you rent for, the harder it can be to get out of it. If you buy a house, you will likely have to pay mortgage payments each month. But, at least a small but increasing proportion of your payment will actually go towards the ownership of a new home. There are a few problems that face young people when it comes to buying a home. Chief among these is affordability, and people’s inability to save money.

Saving money is the cornerstone of home-ownership, though. You need to be able to save a vast amount of money to accrue a deposit for a home. In a lot of cases, deposits will need to be anywhere between 5 and 20% of the property value. With this in mind, it’s easy to see why people struggle to save enough. It takes dedication and willpower to make sure that you can save enough each month. You will still have to be paying rent, as well as whatever other money you have to spend. So, you will probably have to attack your lifestyle to make this work. Cutting out certain aspects of your life will make living much cheaper. And, will also make it easier for you to save. Your bank should be happy to help you come up with a way to save enough for a deposit on a home.

Your deposit will only be the first step you have to take when it comes to affording your home. You also need to make sure that you’re earning enough to cover monthly repayments. In a lot of cases, repayments will cost more than the rent you used to pay. This makes it hard for a lot of people to adjust. The people who give you the mortgage should only do so if they are sure that you can afford it. They will vet your current finances and even look into your past. Of course, for people with a history of debt, this could cause some problems. So, you will need to make an effort to improve your standing.

A lot of world governments are offering methods for young people to get affordable housing.  In the UK, the Help to Buy ISA is a good thing to consider.

This has been introduced after pressure from all sides to make sure that a generation of people doesn’t go without home ownership. Some of the schemes that countries run can be extremely helpful for a first-time buyer. And, especially helpful to someone on a limited income. A lot of governments will even have their own properties. This will be given out to people who need them most, with extremely cheap rent.

 

A lot of governments prefer help-to-buy systems, though. With a scheme like this, you will buy a house in the normal way. But, when it comes to your repayments, the government will make it cheaper for you. This makes it much easier for you to cover the repayments, and to secure a home in the first place. Of course, with a scheme like this, your choice of housing will be limited. Most of the schemes have strict requirements, to avoid people who don’t need them taking advantage. This makes it especially important to do research when it comes to this type of scheme. You may have a lot of work to do, depending on where you are.

A lot of governments can help with different areas of funding. A lot of the reason that it’s so hard to get a mortgage is that of reckless spending in the past. To avoid issues with non-payments, banks are very selective when it comes to the people who they lend to. If you’re high risk, like a young person, they will expect a larger deposit. To combat this, a lot of governments offer backing for mortgages. This means that they mortgage companies are insured against non-payments. And, they won’t lose money. Alongside this, you will pay a smaller deposit and a lower interest rate. This sort of scheme is great for people who are struggling to find a deposit. Have a look at sites like http://www.calmtg.com/types-of-loans/hud-loans/ to find information about the types of home you can get under this sort of method.

A lot of places will allow you to buy just part of your home, with the government owning the rest of it. Usually, they will own anywhere between a quarter to half of the home’s value. In most cases, they will aim to keep it lower than half. This ensures that you own most of the property. This sort of scheme will only be found for specific houses, which the government has paid to be built. Other companies will offer schemes like this, too. But, they may have weird conditions that make it hard to live in the home. You should always make sure that you’re getting a good deal out of a scheme like this.

Owning a home is key objective for a lot of young people. Once you have a career started, you have a will want to make tracks in other parts of your life. Owning a home provides you with a legacy for your loved ones. And, it will make your living situation feel much safer. You will know well in advance if you’re going to lose a home that you own.

 

Have a read of other Property articles her on Magical Penny

 

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Got Some Spare Time? Earn Money!

by Magical Penny on February 8, 2017

british pound notesAside from working full time jobs, there are different and accessible ways for us to earn money in our spare time. And who doesn’t want extra money? There are ways you can earn money sitting on the sofa with your laptop, or you can get out for an hour or two and see the extra pennies roll into your bank account with ease.

However, if money is tight and you are struggling with your finances, it is always a good decision to stick to a budget and find ways that you can save money – lower your bills, eat out less, only buy essential items etc. By using some imagination, though, and with a bit of effort you can find there are lots of ways you can make some money apart from getting a full time job.

Get your savings in check

If you’ve had the same savings account for a while it could be useful to look around for better rates, and a new bank. Good rates on savings do tend to come and go and fluctuate, but if you’ve had a savings account for a long time and have not seen much of an increase on potential interest earned, the chances are that you could benefit from a change of bank provider.

If your aim is to start putting savings away, then try to put money aside each month. It doesn’t have to be a lot, you can do it bit by bit. If you want to use an ISA account, you can save up to thousands of money every as cash in an ISA account isn’t generally applicable to be taxed.

Using credit cardsCould cashback credit cards help you?

If you own credit cards and pay off your  bill completely each month, then a credit card which allows cashback could be the best choice for you. These types of credit cards are popular as they offer you money back when buying products in stores or on essentials such as petrol. Just be careful not to overspend on a card and make sure you pay it off every month.

Look at cashback websites

You can potentially earn even more money by doing your shopping online. Yes, you can shop and earn money – great, right?! Cashback websites will pay you every time you buy a product or a service from certain retailers.

Be a music reviewer

If you do your research, there are websites dedicated to music, which will pay for your reviews. However, be aware as a lot of sites just offer free contributor spots. Reviewing music can be really fun and worthwhile, as you’ll expand your music knowledge, get access to free music and even have your name in print! However, you will need to dedicate time to review the music properly.

Get paid for surveys

On the internet, there are plenty of sites which offer opportunities to make money. By simply joining survey websites you will get rewarded for your opinions, either through cash or gift vouchers. This can come in very handy.

Tax credits

Check that you are receiving all the benefits and tax credits you are entitled to. A lot of people are missing out on benefits and tax credits which could really help out, and if they were to simply check if they were entitled to anything, they could be better off. In the UK you can find information on the .Gov website: https://www.gov.uk/tax-credits-calculator

Earn from web research

Some websites look for, and require, people to work for them by researching the internet. An example would be a customer asking a question through a website’s form, and then you trawl the web and seek the correct answer. These questions can be about anything.

With this sort of job, you get to choose your own hours and the questions you answer, and the payment ranges from pennies to pounds.

house mortgage UKGet a lodger

While house prices are rising, it is possible that there are ways in which your home can make money for you.

There are schemes in place now which means you don’t need to pay tax on certain amounts you earn from a lodger, in effect leaving you with a nice profit. The scheme in the UK is called the ‘Rent a Room’ scheme. The Rent a Room scheme is an optional scheme that’s open to owner occupiers or tenants who let out furnished accommodation to a lodger in their main home. It allows you to earn up to £7,500 a year tax-free, or £3,750 if you’re letting jointly.

As well as renting a room out to a lodger, you could look up information on real estate and see how you can earn more money by doing more than just renting a room out.

Be a film extra

If you have ever wanted to see yourself onscreen, then there are lots of good opportunities. Film and TV companies are requiring, and need, extras. Generally, people make around £100 a day and aside from the cash, you may also get the chance to meet some famous actors or celebrities! However, it is a good idea to join a casting agency first for you to get a good shot so do some research on ones with a good reputation.

Rent out a parking space

If you live in a city, or close to a city centre, or a train station or sports stadium and don’t use your parking space for whatever reason, you could easily be making a good profit on the space. Renting an empty parking place to a commuter or sports fan could see you rake in the pounds.

In especially busy areas, it is possible to make money every day of the week – and when sports games are taking place you could double or even triple the usual charge.

houseRent your home

There are now websites where you can advertise a room or your home for tourists planning to stay for a short time. It can be especially useful if you have an empty house – for example when you are on holiday – and you can make easy money.

Recycle your old mobile

Many of us have an old mobile phone taking up space somewhere in the house, but it is possible to easily turn your mobile into a bit cash, even if it is damaged or faulty. Research how much your phone will sell for, and then upload it to a website or take it to a second hand phone shop.

Model your child

While every parent believes their child or children is a star in the making, there are agencies out there which could think so too. The first step is to contact an agency and ask what you need to do to get your child involved, and what requirements their company has. After this, you will be potentially asked to send in a photo of your child.

 

Auctions

All of us hoard items that we think could possibly come in handy one day but if you really look at the things you are hoarding, the chances are you have forgotten about them or have no use for them. You can sell them online or, for really valuable items, take them to an auction house where good money can swap hands.

Sell your skills

All of us have particular skills we have developed and unique talents – and a good way of using these to our advantage is to train, educate and tutor other people. For example, if you learnt the guitar to a high level but did not want to take it any further professionally, then you can make good money by tutoring people in your area. If you were to charge £20 an hour, if you did three lessons a week that would be £60. Monthly, that adds up to £240.

Also, if you have a talent for things like decorating, sewing, ceramics and crafts, you could also sell your creations at fetes, local craft fairs and you can also upload images of your work online. That way, people can see your talent and may want to buy your products.

Car boot sales

If you’d prefer money instantly, then a car boot sale is a good choice for you. Lots of people visit car boot sales, and you’ll find that items do tend to sell quickly. However, sometimes it is not possible to make a lot of money from car boot sales – but every little bit counts.

small questionMystery shopper

If you enjoy shopping but do not want to spend unnecessary money in the shops, good option for you could be to work as a mystery shopper. Check job websites to search for companies that employ mystery shoppers; a mystery shopper will simply go to shops and restaurants (without saying who they are) and rate their experience.

After your visit and after your give your review, you will be paid for your time and you will also get the money back that you spend in the shop.

So, if you are looking to earn an extra bit of cash – the easy way – do your research and the chances are that you will find jobs and assignments you can do. Also take the time to look up local car boot sales, and advertisements for people who want tutors. When it comes to selling your talent and skills, always ensure you price yourself at a good rate and do not undersell yourself. If people want to learn skills, they will pay good money.

 

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Money Mistakes – Its Time To Put Right

by Magical Penny on February 3, 2017

no time like the presentYour money isn’t something that’s necessarily easy to get 100% right.

We all have responsibilities, needs, and turns of events that make it hard to get as much from our money as we can. However, the truth is that if we’re willing to put more effort towards retaining more money and making better use of it, we could see ourselves in a significantly better situation just a few years down the line. One of the ways we should be looking to do that is by taking a closer look at the mistakes some of us tend to make with our money. By making the simple corrections below, money trouble might be nothing but a distant memory for you.

You’re not putting anything aside

Most people know they should have some sort of plan as to what they do with their extra money. Yet the problem is that a lot of people spend years procrastinating. Now is the time to put a stop to that. Instead of looking to save up your ‘leftovers’, create a budget and start allocating money that is designed for your future development. Whether it’s money for an ISA, for investments, for tackling debt, or anything else. So long as you’re automatically paying out those allocated funds before you start spending, you know that you’re progressing.

life insuranceYou keep making payments you shouldn’t

Then you need to take a look at the money you can’t allocate because it’s already going elsewhere. Trimming the fat from your budget isn’t just about spending less when you go shopping or less on treats. It’s also about identifying money you’re already spending that you probably shouldn’t. For most people, this means taking a look at subscriptions that you rarely use, like video streaming services and online magazines. If you’re not paying enough attention to the money going out of your account, it’s easy to be losing more than you expect.

 

You’re using loans for the wrong reason

Now, let’s look at the ways that you get more money into your life. We’re not going to tell you to stop using credit or getting loans because they can be a very useful tool. However, there are some situations in which they’re not as much of an applicable solution. In particular, your credit is best used for making investments. If you can see enough returns from spending the money to pay it back, that’s as close as you can get to totally mitigating the risk of any loan.

You might be owed more than you think

In modern society, there are a lot of ways that people and organisations get away with money that should be rightfully yours. But that doesn’t mean you have to stand for it. For instance, if an individual, such as a landlord or an acquaintance, owes you money, the law could be on your side in the small claims court system. If you have a mortgage, then there’s a high chance that you could be owed money for payment protection insurance you never agreed to. Most common of all, people find that they have been billed more by energy companies than they should have been, which has led to a plethora of refunds.

cautionYou’re using savings to pay off debt

Just as there are correct ways to use your credit, there are correct ways to use savings. In particular, using them for their intended target, such as retirement or preparing for an investment. Yet when debt hits, many people will start pulling money from their savings. If you have no other options, then you might have to. However, it’s a lot harder to recover those savings than it is to simply use your ongoing income to formulate a debt repayment strategy. If you have any options besides using your savings, then use them, even if it means you’re dealing with that debt for a longer time. If you don’t correct your spending habits and instead use savings, you risk not fixing the leak and then getting back into debt. Eventually you won’t have savings to bale yourself out again. Fix the route cause: too much spending and not enough income

You have no protections against sudden danger

This is one that still catches out people again and again. Besides dealing with debt as you encounter it, you should have defences ready to protect you from debt as much as possible. Insurance is the most obvious, but you should also have your own stockpile of emergency cash ready to go when you are hit with a sudden payment or financial crisis.

A proper grasp of your money means taking a look at how you spent in the past, how to ensure you have everything you should in the present, and how you prepare for the future.  It might seem like a lot to take on at once, but it’s just about getting in the habit one step at a time. When you learn to be more financially sensible, you barely need to think about it at all.

 

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Poor Credit Is Only An Obstacle, So Push Through It

by Magical Penny on February 1, 2017

 

Whether you like it or not, financial status plays a crucial role in your life. Not only does it influence your daily activities, but it also carries a huge impact on long-term factors. With this in mind, a strong credit rating is certainly beneficial. However, we all make mistakes; if yours is in a bad way, it doesn’t have to be the sentence you might first fear.

The harsh reality is that a poor history will make your future a little harder. But you’ve broken through barriers in other aspects of your life, and you’re more than capable of doing it again here. As long as you equip yourself with the right information, and act upon it immediately, you can still lead the life you deserve.

Here’s all you need to know.

time#1. It’s Never Too Late

A poor credit rating can feel like it’s choking your future, but it’s never too late to start improving your situation. As long as you start taking responsibility immediately, there’s no reason that you can’t have your status in a better position by this time next year.

There are many different ways to improve your credit score. From successfully paying off your debts to keeping well within your credit limits, each month of improvement will open up new doors. Perhaps the most crucial aspect, however, is to know that your data is accurate. If you live in America then accessing your free annual report at AnnualCreditReport.com will allow you to check that everything is accurate. In the UK Experian offer a similar service.

It might take a few years to get yourself if great health, but you’ll be amazed at how quickly you can get yourself back to an average looking score. And once you do, you’ll no longer feel as though you’re drowning in financial problems.

 

percentage growth#2. Good Habits Encourage Steady Improvement

When you’re in a hole, it’s tempting to think solely about the big gestures that will create the quickest and most noticeable impact. However, those changes are futile unless you couple them with the daily upgrades that will set you on the pathway to success.

A little effort goes a long way, and saving money on everyday purchases will slowly but surely leave you in a far more stable position. Meanwhile, incorporating ideas like growing fruit or cycling to work can help your pocket as well as your health.

Life is a marathon rather than a sprint. Adjust your way of thinking to appreciate the importance of those daily choices, and the rewards will soon show.

shopping tips for supermarkets#3. You Can Still Have The Things You Want Now

Your poor credit rating suggests that you’ve been a little irresponsible in the past. This isn’t always the case as unforeseen circumstances such as illness can be the root of your financial problems. Either way, though, handling your purchases in an efficient manner is now more important than ever. But if you’re ready to make those commitments, it’s still possible to move forward with your life today.

Most people in your position are fearful when it comes to making major purchases. However, auto loans for people with bad credit illustrate that some doors are still open. Ultimately, poor credit shouldn’t stop you from having a safe and reliable car. Just remember that making those repayments is non-negotiable and you’ll be fine.

 

Whether it’s a car, a home, or something else doesn’t matter. Some firms will allow you to use your job or other assets as collateral. A little research goes a long way, so make yourself aware of the options before giving up. You’ll often find that the situation isn’t nearly as bad as you thought.

money magical penny#4. There Are Ways To Boost Your Income

Credit scores are one thing, but they don’t dictate how much money you have. The best way to overcome the obstacles posed by a poor history is to increase your earnings. There are a number of options at your disposal, and they all start with learning to value your worth.

Investing in your resume and cover letters can have a telling impact on your job prospects. You don’t even necessarily have to change company to achieve your goal of an improved salary. If you truly believe that your work deserves a greater reward, there’s no reason why you can’t speak to your boss about a raise.

Career progress might not always be an option. However, there are plenty of ways to generate a side income via the internet. From blogging to freelancing, if you’re willing to put in the effort, you can earn a few extra dollars each week. It won’t be long before you notice the difference.

#5. Analyze Everything

In your position, rushing into decisions can be the worst habit of all. While you shouldn’t hesitate in buying the things you actively need, unnecessary purchases can lead you to an even deeper hole. Acquiring a more responsible outlook is vital.

It’s not only the direct impacts of the purchase that needs considering, especially when applying for credit. Remember that multiple credit inquiries can damage your credit score badly. If those smaller credit purchases can be kept to a minimum, you’ll still build a better history without harming your hopes of future deals.

Besides, taking on less debt means you’ll be paying less in repayments too. If sacrificing a few luxury items means that you can afford to live a more comfortable lifestyle, it has to be a worthwhile decision.

today is soon the past, the future is forever#6. Prepare For The Worst

The biggest problem with a poor credit history is that it can often remove the financial safety net. Borrowing money through a direct loan might not always be a possibility. So encountering an unforeseen problem could put you in a very unenviable position.

 

Saving money for a rainy day is the only solution. Comparing the best savings accounts at Nerd Wallet will allow you to make an informed decision to ensure those funds are in the best place. Even if that rainy day never arrives, that money can eventually be used as a large down payment on a significant purchase.

Apart from the physical benefits, the emotional security is something that we can all appreciate. Even if you live for the moment, keeping one eye on your financial future is pivotal. After all, fail to prepare, and you prepare to fail.

 

If you do have debt, have a look through the Magical Penny Debt archives for more ideas.

 

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Save Money Here, There and Everywhere

by Magical Penny on February 1, 2017

 

money making ideasThe notion of pinching pennies has become a phenomenon. It is as if our generation knows the pitfalls of a sudden economic crash and is doing their very best to ensure they have enough tucked away for that rainy day. The problem is, how do you successfully save money without becoming a complete hermit who wastes their life? It’s hard, but it is possible. Read on and we’ll explain how.

Price comparison

There are so many sites out there that offer price comparison on pretty much everything; car insurance, house insurance, utility bills, gadgets, books, vehicles, anything you can possibly think of. Just go and check out moneysupermarket or uswitch and you can find out how much you could be saving in a matter of minutes.

Vouchers

Why not shop around for codes and promotions. We are always reading stories about a mum who manages to feed a family of six on £1.50 a day, or a bloke who did his entire christmas shopping (including the lunch) on nothing but vouchers. If you don’t know where to look, then just head over to pluscodepromo who have offers on pretty much everything from pretty much everywhere.

Should I open a Junior ISALoose Change

Put your loose change in a jar, or a piggy bank, or a pint glass. It doesn’t really matter which, so long as you start doing so. The reason why is simple; you’ll be totally gobsmacked at the fact one jar full of coppers and silvers can be worth £50 in one of those coin converter things you see at the back of supermarkets.

The Shop

Don’t go the local Tesco everyday to get dinner for tonight. Don’t go to Subway everyday to get lunch. Do a weekly shop or, if you have space for it, do a monthly shop. It is a solid routine to get into and one that will save you a serious amount of money. We can assure you that.

Cook In Bulk

It is as simple as that. Whatever you are cooking, make a ton of it and then freeze it. Take it to work with you (instead of going to Subway for lunch everyday). Eat with different sides. Reheat it when you get home late. It will save you money and it will save you time.

No More Gym

You don’t really need the gym to get fit. All you need is a Youtube and some self discipline and you could be saving yourself hundreds, if not thousands, of pounds a year. It’s all about being savvy.

Eating Out

Yes, you can still eat out and save money. It is all about where you eat out. Some of the best places we’ve ever visited are the cheapest and that is because they require you to bring your own bottle and just charge a small corking fee. That means what would have been a £20 bottle of wine (the first on the list) is now a £5 of Glenn’s vodka, which will really do the trick. Amazing.

 

For more money saving ideas have a look through Saving category archive here on Magical Penny

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You’ll Be Amazed How Much You Can Save! Saving Money on Everyday Purchases

by Magical Penny on January 31, 2017

autumn statementEverybody likes to save money when they can, but some people really like to save money – and not just when they can, but at every single opportunity. After all, if you work hard for your money why would you spend it without first checking if there’s a chance that you could, well…not spend it?

Fortunately for those who want to ensure their money goes as far as possible, there are many ways you can keep your monthly expenses down to a minimum. After a few months of following our advice, you’ll be amazed at how much more money you have in the bank. Money saving ahoy!

 

Share Your Accommodation

This might be better suited for people who want to raise a large amount of money in a short period of time rather than a long term solution (but you never know!), but if you have space in the place you currently occupy, then why not consider getting a roommate? If you live in an area that is anyway desirable, you’ll find plenty of people will to save money by moving in with someone else. You don’t even need to have a spare room – you can always offer a living arrangement elsewhere in your home or where you share your bedroom. If it is your bedroom, you’ll have halved your monthly rent – bit money, hey? (If it’s a sofabed you’re offering, you’ll have to offer a reduced rate of course.)

window shoppingUtilize Discount Codes

There are always savings to be had, if you know where to look. To begin, checking the deals in your local stores should be your first port of call: do not be loyal to a brand when another is offering better savings. You can also scour newspapers for coupons in your area and sites such as DontPayFull.com for when you’re doing online shopping. Using coupons is a double win, too – you save money and get the satisfaction of knowing you’re saving money for an item other people are paying full price for!

Fix Your Broken Belongings

When things are damaged, people tend to almost instantly throw it away and look at buying a replacement. It’s just our culture. However, it doesn’t have to be your culture. Back in the day, people wouldn’t throw damaged goods away – they’d fix it, and so can you. Whether it’s your favorite pair of jeans, home appliances, or even electrical goods, most things that are considered “broken” actually just need a bit of tender loving care.

buying investments onlineBuy Second Hand

If you positively have to buy something you don’t already own, don’t buy it new – go second hand. Whatever you’re looking for you’ll be able to find a high quality, pre-owned version of it. In fact, one of the best ways to save money on electrical goods is to buy refurbished models. These are models that have been used before, but have been professional restored so that they work and look like new. An easy way to get a great product and save money!


Wave Goodbye to Cable

With a whole host of home entertainment now available, it makes little sense to keep spending a big chunk of your monthly wage on cable. It’s expensive, there are adverts, and you might not even be home often enough to really make the most of it. Unless you really can’t live without it, make the snip and save yourself some cash.

Don't Have The MoneyUse Your Hands

Nobody in our society seems to use their hands anymore, but it’s an easy way to save money every single day. For instance, hand washing your clothes saves on the cost of running a washing machine and hand washing your dishes saves on a dishwasher. You can dry both of these, either by your hand (the dishes) or by hanging them up outside (the clothes), and you’ll have spent virtually nothing. The cost of running electrical appliances is more expensive than you might think, so it’s a no brainer. Additionally, you should think about using your hands to grow your own vegetables – they’ll be fresher, tastier, and cheaper than whatever you can get in the supermarket!

Entertainment

You don’t have to head out to the local bar for a fun night. Grab your friends and invite them round to your place for a night of games and chit-chat. The cost of a taxi, drinks, tipping, fancy new clothes, and all the other expenses of going out can be put straight into your savings account – and you’ll still have had a fun night with friends!

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