.jpg)
Source: www.ConstructaQuote.com
Stay safe out there and keep money in perspective. And, if you have people who are dependant on you, life insurance doesn’t hurt, either!
{ 0 comments }
A guest post from Andy about credit cards….useful things if used responsibly.
A balance transfer can be a good idea because it can help you to decrease your debt. You can transfer the amount of money that you owe on a credit card, for instance, to another lender.
With a ‘super’ balance transfer, you can even transfer the amount that you owe on a personal loan or your overdraft from your credit card. This is one of the easiest ways to save money because these cards will not charge you anywhere near as much in interest, in fact, in the UK most of the top cards don’t charge any interest at all for over a year.
If you are having trouble making your payments or reducing the amount that you owe because the interest rates are too high, this is certainly an option that you should explore. Below are a number of things that you need to look into when you are going over the various options that are on the current market.
First, you must look at the interest rate that you will get when you first open an account. If this is not lower than what you are currently getting, the transfer will not be helpful at all. You need to try to find the lowest interest rates that you can – thankfully most balance transfers are 0%. Sounds too good to be true? It’s not. You’d be silly not to take advantage of it.
The next step is to see how long this rate will apply to any balance being transferred. If the low rate only lasts for a month, it won’t be very helpful at all. In the UK, the market is so competitive that nearly all balance transfer offers are interest free for at least a year, but some (like those offered by the Barclaycard Platinum and Halifax Balance Transfer Card) offer nearly two years interest free on balance transfers. Therefore, it is important that you look at this in connection with the interest rate and not just at the rate itself.
After that, you need to work out what the rate will change to after the promotional period ends. It may be possible for you to find a deal that will never change, where you will be locked into the low interest levels until everything is paid off. This is not common, however. The vast majority of balance transfer deals will revert to a higher interest rate after their promotional offer expires. If you do not think that you can get everything paid off before this happens, you need to know how much the rates will jump so that you can see if the deal is really as good as it sounds.
Do not take out any balance transfer offers until you know exactly what additional costs will be involved. In the UK it is standard practice to be charged a balance transfer administrative fee, typically in the region of 3% of your balance. You need to know how much all of this will cost because this can help you to see if transferring your debt is even worth it. If you have to pay out more than you will save, you should not make the transfer.
Furthermore, you need to see if there is a maximum limit regarding how much debt you can even transfer over in the first place as some banks will only allow you to transfer so much. If you have £10,000 of debt, you need to make sure that you do not apply for a balance transfer that only allows a maximum of £3,000.
Some banks will require you to be a customer before you can actually open an account and apply for a balance transfer. However, these tend to be in the minority of offers – most offers are open for application by anyone. Regardless, check first if the balance transfer offer you want is available only to existing accountholders.
It also does not hurt to find out how your credit score impacts your rates. If you have a high score, you can sometimes get a much better deal given that most of the banks have variable rates on both balance transfers and purchases. If your credit history has been tarnished in the past, then do not apply for the most competitive deals on the market as they are reserved for those with excellent credit. Instead, people with impaired credit records should look for a credit builder credit card with a balance transfer rate. Of course, if your credit score is in the excellent range, then you can apply for a much broader range of offers.
Andy is the co-founder of Finance Choices, a comparison website offering UK consumers an easy and impartial way to compare a range of credit cards for people with poor credit.
{ 2 comments }
If you’ve ever considered some kindling to help that entrepreneurial spark of yours become a raging fire, then I can’t recommend this sale more highly. It’s made up of products from many ridiculously awesome people doing great things online.
And you can learn how they do it!
I’ve met many of these authors personally and know they are doing some world-changing stuff.
Check it out.
It’s only around for 72 hours.
{ 0 comments }
Spending and saving money is mostly about mastering the voices in your head rather than what you ‘know’ about managing money. It therefore makes a lot of sense to take note of how your mind works when you spend money. With this in mind, the article below is a really interesting guest post I wanted to share with Magical Penny readers!
It’s an adage which was probably trotted out every Christmas by an elderly relative as they proudly presented you with yet another pair of reindeer socks. But psychologists have found out it’s actually true: spending money on other people gives us a greater satisfaction than if we’d just bought something for ourselves.
In a study carried out by the University of British Columbia in 2008, participants were split into two groups and given $5 or $20. One group was told to spend the money on themselves, the other group told to spend it on another person. The latter group reported greater feelings of happiness than the former.
As I write this, I’m reminded of the Friends episode where Joey challenges Phoebe to find a selfless good deed, arguing that there is no such thing. In the episode, Phoebe tries having a bee sting her so “it will look tough in front of its bee friends” – until
Joey points out that the bee would have died after stinging her.
She then pledges $200 to PBS, a channel she hates, thinking that she’s finally found something with no good comeback for her. Yet her donation puts Joey, who takes her call on the PBS telethon, in the spotlight as the $200 takes the channel over their
pledge target for the year. Naturally this makes him happy, which makes Phoebe happy…until she realises that it’s made the deed selfish after all.
Why am I talking about this? Because that was the conclusion behind the study of why we’re happier spending money on other people. It seems that we give to others partly to promote ourselves as generous and kind, and when we feel this way about ourselves we feel happy. Another reason is that generosity helps to promote and strengthen social relationships, and as humans are social beings by nature, having these strong friendships makes us happier.
In a separate but related study in 2010, it was found that buying or receiving experiences, such as a day out or concert tickets, were more likely to make us happy in the long term than getting or buying material things.
Why? Well, think back to a happy time when you were growing up; perhaps a day at the seaside or your first holiday abroad. The chances are your brain has filtered out any of the less fun aspects that might have happened (being kicked by a donkey, getting ‘Spanish Tummy’ from the water) and exaggerated the good parts, leaving you with an inflated happy memory which will remain so over time.
Now think of a possession, an item which you really wanted at the time but that you never use now. Perhaps it’s a pair of shoes which you don’t wear, or a longed-for appliance or gadget which is now gathering dust. How many times since buying it have you thought, however fleetingly, “I wish I’d gotten the other pair” or “The new version of it’s much better than the one I’ve got”?
Why?
No matter what the item, it will always just be that item. As trends and tastes change, it will become less valuable or coveted, and eventually it will be just another thing cluttering up your cupboard. And socially, talking about a favourite possession could get you thought of as shallow and materialistic. Yet providing amusing anecdotes about something you’ve experienced is much more socially acceptable.
Conversely, when purchases go bad, it’s easier to forget about material purchases than experiences. A 2009 study by the University of Texas surmised that if you bought a jacket years ago which bust a seam after wearing it once, you’d probably just exchange it and forget the experience after a while. Yet if you had a meal at a posh restaurant which resulted in food poisoning, you’d likely avoid that particular place for years afterwards.
If you want to be happy, spend most of your money on other people; and when you spend on yourself go for meals out, days out and holidays instead of buying the latest gadget!
Should make Christmas quite easy…
Louise is a writer for MoneySupermarket, a price comparison site in the UK. She writes mainly about personal finance, advising readers on getting the best out of their credit cards, mortgages and savings accounts.
{ 0 comments }
I recently returned from Maui, Hawaii, where I got to experience the hospitality and awesome facilities of a 5 star hotel.
I know, not exactly the most frugal choices for someone who blogs about personal finances!
But it actually turned out to be a great personal finance decision.
Having never stayed in a 5 star hotel before I didn’t really know what to expect but I had high expectations. And I wasn’t disappointed. The service never stopped: from having my bags unloaded upon arrival and a flower necklace placed around my neck by the greeter (It is Hawaii after-all); all the way down to the constant delivery of inspirational quotes placed on my pillow every day…I could certainly get used to living in paradise.
Whilst the facilities were not cheap, I did, however, make the decision to stay in the cheapest room available in the hotel.
Mastering personal finances is not all about trying to reduce your spending as much as possible. It’s more about becoming an expert conscious spender.
Staying in a 5 star hotel was a conscious choice I made to experience living in an amazing venue for a week. I knew the hotel would be amazing but reasoned that the room itself would be less important to me – all I needed it for was to sleep and recover from having a ridiculous amount of fun learning to surf and having the time of my life with new-found friends. By opting to stay in the cheapest room I maximised what I had available to spend on other things.
Certainly, the room was not cheap -it was in a 5 star hotel after-all – but it provided excellent value compared to those who opted to stay in suites that ran 5 or even 10 times the cost of my room. Was their room really that much better? I didn’t think so. I’m sure I’m not the first to take advantage of this kind of tactic.
Conscious spending on the things that matter can be applied to a lot of things:
{ 0 comments }
The psychology of saving is a fascinating subject. Understand why you spend and why you save and financial goals become a LOT easier to reach. That’s why I’m really pleased to be able to share this guest post today to help you you grow your pennies!
Why do you spend money?
Why do you save money?
There are many things that motivate people to do one or the other, and often we are predisposed one or the other. You probably have a stingy friend or relative that everyone makes fun of for holding on to their money, just as you know someone else equally motivated to spend whatever money they can get their hands on. But as you know, finding a happy medium between spending and saving is essential to your overall well being as well as your long term financial and personal success.
Once you know what motivates you to spend and save, it is easier to organise your finances and make the best possible decisions. So let’s take a look at what makes us tick!
While there is nothing wrong with spending money, going overboard can quickly lead to a multitude of money related issues. Here are three of the key motivating factors behind spending money:
Wanting to have a good time:
Most people are motivated by having fun, either alone or with others. Even though there are many ways to have fun for free, a lot of people feel that the more they spend the better time they will have. All those crazy weekends where the budget gets tossed out the window pays testament to that.
To feel better about yourself:
Do you tend to spend when you are having a bad day or are looking to improve your self-confidence? If you just answered yes to one or both of these questions, there is a good chance that you are in the habit of spending money to make yourself feel better. While this may be motivation to spend, it often results in a short lived bliss. Soon enough, you will have buyer’s remorse as you realise that spending money did nothing to change your situation. And worse yet, you could end up with the burden of debt looming over your life, compounding any emotional or personality issues that made you spend in the first place.
Doing something nice for somebody else:
No matter if you are buying a gift for a special occasion (birthday, Christmas, anniversary, etc.) or just to show how much you care, you may be motivated to spend on the basis that the recipient will realise the importance. In situations like this it can be very easy to spend more than you can afford to spoil the recipient, show them how much you appreciate them, or simply to show them (in a rather selfish way) how good you are to them.
New Experiences
Wants and needs cover the basic ideas, but specifically, we all want to experience new things in life. Sure, we’ll enjoy the same thing over and over again from time to time because we get into a comfort zone, but life is for finding out new joys. We spend money because we feel we’ll be rewarded with the new stage of life. Whether it’s on tickets to a new area on the other side of the world or on glamping pod manufacturers for a domestic camping trip, we’ll invest. Boredom comes easy to us – so we’ll do our best to look for something to quell such mundanity.
For many people, saving money is a way of life. For others, this is a struggle day after day. Here are three of the biggest motivations to save:
Fear:
Are you afraid that you will run out of money in the future? Are you afraid that you will lose your job and not be able to pay the bills? Fear, uncertainty and doubt, aka FUD, is perhaps the biggest motivation to save. It can be very difficult to get money related fears out of your mind, especially if you are the sort of person who likes to be in control. However, as you save more money this feeling may begin to subside and gradually be replaced by a growing sense of security.
Security for the future:
If you want to maintain your standard of living and have a good lifestyle in the future, particularly during retirement, you better begin to save today. The more money you save today, the more security you will have in the future. In many cases, security for the future and fear go together hand in hand. In other words, you may be afraid you are not saving enough now to feel secure later in life.
So that you can purchase something big in the future:
Are you motivated to save for a dream vacation to a tropical destination? How about that sports car you have had your eyes on for so many years? Saving for something in particular, especially something that you really want, may be all the motivation you need to count the pennies. Saving up to pay for something in cash is a sound principle to stick by, and one that can save you a lot of money and stress.
{ 1 comment }
There’s a lot of talk about UK and world-wide debt levels.
As the UK economy is wavering in its recovery, research into the extent of the debt problem in the UK has been compiled into a video that’s worth a watch.
Source: Payplan
Never a better time to take control of your own financial situation (and lots of things in the works for Magical Penny at the moment –stay tuned!!)
{ 2 comments }
Growing your wealth and learning to invest in the stock market is one of the most empowering things you can do.
It makes you feel like you have more control over your future and the world seems more full of possibility when you have a little bit of capital locked away for a rainy day (or a really sunny day in the future!)
However, when I’m screaming to my friends that they should be investing one of the most common questions is:
Whilst I am by no means ‘rich’ since I graduated from university I’ve always been diligent to put some money aside, even if it was just a few pounds at first. I knew that the process and habit of regular saving was much more important than how much I was saving, at least at first.
But for many 20 somethings, it’s hard enough to get to the end of the month, let alone putting money aside for another day. For many, going into debt is a natural progression as we transition into our adult lives.
Adam Baker from You Vs Debt
I haven’t really talked much about debt on Magical Penny -without meaning to sound smug, I just simply haven’t had much experience of debt (other than UK student loans). But I do know from other people’s accounts that debt can have a devastating effect on people’s lives. And perhaps no one knows more about the power of eliminating debt from their lives than my friend, Adam Baker.
Baker is an all-round awesome guy who blogs at Man Vs Debt -where he chronicled his journey from huge amounts of debt to a life of financial freedom and adventure: selling everything he owned and travelling the world with his wife and young daughter, all whilst running an online business. He know what debt can do to people and he knows how to help others get out debt too. I’ve been following his adventures for close to two years and even got to meet him in person during his tour of America earlier this year. He’s a class act.
So I’m really excited to share his story with Magical Penny readers and introduce you to his awesome new course:
You Vs. Debt is a comprehensive 6 week, daily video course and accountability community that is launching on 19th September. All the information is on his site but fair to say, I’ve seen some of the videos he’s put together and it’s powerful stuff.
It’s one mission:
If you’re struggling with debt or just want to feel more control of your money then You Vs Debt is genuinely an excellent programme to explore.
CLICK HERE TO LISTEN TO WHAT BAKER HAS TO SHARE AND LEARN ABOUT THE PROGRAMME
And I can’t wait to have you back here at Magical Penny when you’re done because once you’ve paid off your debt, it’s on to the fun bit -growing your pennies!
{ 4 comments }
When shopping for homeowners insurance quotes it is important to be informed so that you can shop like an educated consumer. Weigh all of the important factors by utilising the information right at your fingertips. Here are a few helpful resources:
Know your needs: It’s really important to know what your needs are when shopping for home insurance. How big is your home? Do you need additional liability coverage? A licensed home insurance agent can best help you determine your needs so make sure you enlist the help of a trusted agent.
Get comparative quotes: Get as many home insurance quotes as possible and make sure you are comparing apples to apples. Working with an independent agent who can shop your policy with multiple providers can save you time and money in the long run.
Research your insurance provider: Before signing anything, find out some information about the carrier you are purchasing a policy with. What is their financial rating? Do they have good customer ratings? Research their A.M. Best rating which will give you a good idea of their overall strength.
Do a regular review: Don’t wait until rates go up to review your policy. Once a year or so, check your policy and make sure you are adequately covered. Also, inform your insurance provider about any changes to your home that may require your policy to be updated.
Also, if you live in America, visit your state department of insurance website to get the latest information on insurance rates and regulations.
{ 0 comments }
Unlike the weather where everyone talks about it but nobody can do anything about it, the subject of money is something people *can* control but rarely talk about.
It’s natural and fun to want to share successes in life -from new relationships and adventures, to the less/more significant news of a new high score on Angry Birds.
But if you start doing well financially: meeting your savings goals, staying within your budget or even increasing your income, then sharing becomes less socially acceptable.
…but to share your achievements too much with others might be considered boasting or vulgar.
The subject of financial success is different to other topics because everyone’s experiences are different.
Personally I think it’s a shame people do not share more, but I understand how to talk of money can change the dynamic of a conversation or a relationship.
…and after working really hard to achieve financial goals you should have an opportunity to share your success with others:
Even if you only share anonymously, take a minute to leave a comment below telling everyone about the financial goals you are either working towards or have accomplished and the ones that you are most proud of.
Here’s to enjoying the journey to financial success and everything that it enables beyond it.
{ 3 comments }