Monthly Archives: June 2014

Clean up your Finances

Tips for sorting out your personal finances.

There is a philosophy that says you should ‘spend a third, save a third, invest a third’. For most people this is unattainable but it is something to aspire to!

The last thing I want to do is tell people how to spend their money but if you are interested in spending a bit less or saving a little bit more or paying off debts here are some tips. Mostly common sense things that we’ve all heard before but sometimes we can all do with a reminder to get a grip on the situation.OLYMPUS DIGITAL CAMERA

Here goes:-

Change your attitude towards spending your hard earned cash. Aim to consume less and cut unnecessary expenses. Place less value on material things and more on experiences.

If you’ve ever done a car boot sale you’ll know what an awful experience it is, standing in a damp field at 5am on a Sunday morning with people refusing to pay 50p for something that cost you £20 only a few months ago. A good thing to come of this awful experience is that it makes you look at things differently. When you go to purchase something, think ‘will this go in the car boot pile in a year’s time?’ If the answer is yes then you really don’t need it. It’s usually impulse buy decorative ornamental nick nacky cheap plasticky kids gimmicky toy type things that fall into this category.

Set financial goals for motivation – what are your priorities and what dreams do you want to turn into reality? Create a plan and make it happen.

Try to save something each month then aim to increase the amount every so often.

Track your spending, including the little things like Costa’s and newspapers as they really add up. Create a budget, then stick to it.

Go through every item of your expenses and try to reduce them where/when possible. For example never just renew insurances, always shop around. Change your mobile phone contract as soon as you are able, I changed mine from £37 per month to £11 per month for better usage allowance with the same provider. Our AA contract had gone up year on year, when it got to £230 (including our ‘valued customer discount’) we looked online to see they were offering the same deal to new customers for just £99. When we queried this with them they told us you should phone and cancel every year and then renew online to get the best deal.

Again, look at the little things, Costa’s – buy a flask, newspapers – get the Sky or BBC News apps and read the important stuff for free, everything else is pure trash (although I also have the ‘OK’ app to keep up to date with the trash/gossip). I don’t think I’ve ever bought a newspaper. I could go on and on with things like this and it depends on how much disposable income you have or how much you want to save. If you are seriously strapped for cash you can save loads on the little things.

Move your credit card balances to get better deals.

If you have debt you need to decide whether you should still save or put more into paying off the debt. The general rule of thumb is to first save an emergency fund and keep it for real emergencies. Then start paying off debts with the highest interest rates. If you are left with debts with interest rates of less than 5% it may be better to invest rather than pay off. If you debthave several debts it can be motivating to pay off the smallest ones first. As each debt is paid off use the money you are saving each month against the next debt to create a snowball effect. The more you get paid off, the more you have available to pay off the next debt.

Cancel any payments you no longer need – subscriptions, extended warranties, unused gym memberships.

Don’t pay for things twice, e.g., when you bought your freezer did they sell you extra insurance to cover your freezer contents if it breaks down, this is usually covered on your home insurance.

Don’t be afraid to change your current account even if it’s with the same bank, it’s not as difficult to do as you may think. Try to get a better deal for your circumstances, e.g., I pay £2 per month for my account but I get back around £12 per month in cash back (partly because my mortgage is with the same bank and I get cash back on the mortgage payments). But beware if you regularly go overdrawn this type of account can be very expensive.   It has to suit your circumstances.interest-rate

Check your savings accounts interest rates, including ISAs. Banks are forever lowering the rates for existing accounts and then bringing out new accounts with higher rates. It’s usually really easy to stay with the same bank but just switch to their latest offering.

Just one final point, a friend of ours is a mortgage advisor and he is on a crusade against payday loans. We all know they cost a fortune if you don’t repay in time but what you may not know is that even if you repay every penny on time it will seriously dent your credit rating. If you try to apply for a mortgage after you have had one of these loans, most banks will not touch you with a barge pole because you are deemed to be not very good with your finances if you have had to resort to that type of loan. It is stereotyping people and unfair if you did repay on time but that is how it is.

 

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For the Love of Lists

Lists – I love them, always have done. There’s something deeply satisfying about ticking off items on your lists. I guess that’s why I took to accountancy, it’s basically just lists of income & lists of expenses.

When you have lots to do or lots to remember and everything is whizzing around in your head itbigstock-The-word-Everything-on-a-To-Do-45656401-300x300 can seem like double the amount of tasks you actually have to accomplish and can seem quite overwhelming. By writing the tasks down in a list it helps to clarify, organise and prioritise the tasks and then when you can see exactly what’s to be done and you know you won’t forget anything, it suddenly all seems less overwhelming.

As humans, we tend to have a natural state of ‘slackness’, lists help to focus the mind. Shopping lists, reminders and ‘to do’ lists are all variations on productivity based lists that we use to help us stop procrastinating. The ‘to do’ list is the one we spend most time on. We don’t seem to struggle to write a shopping list and then buy everything on it but getting tasks on a ‘to do’ list done is a whole different matter.

Tips for your ‘To Do’ list

Don’t make tasks too large, break them down into smaller tasks, you’ll have more to tick off and will feel like you are achieving more.

Prioritise – put the list in order of urgency.

Be realistic with your planning. It will have a negative effect if you are unable to accomplish your tasks in the time you set yourself.

If you can’t get motivated try doing the simplest, quickest tasks on your list first. Ticking off some items will help you get going.

Find methods that work for you. You may need a list of long-term tasks and then make sub lists for smaller more immediate or daily tasks.

My Lists

In my personal life I have lists for everything, shopping (I have an app for that one), packing, camping, finances, birthdays, bucket lists etc, etc but we won’t go into those as some may think it’s a bit sad.

In work, although I have many lists to organise and keep track of things in my business, my ‘to do’ list is the most essential. (That and the list that shows who owes me money.)

I do a monthly to do list so on the first day of each month a new blank list complete with tick boxes is printed off. First I put on everything that was left to do from the last month. I draw a red line under these so I know they were from the previous month and that these items must be done by the end of the new month, that way I am never too far behind with anything. Then in a separate section I write in anything that I know has to be done in the month and the date it has to be done by, items such as PAYE submissions, Companies House annual returns, VAT returns etc. Again a line is drawn under these, then any new work that comes in during the month is listed underneath and whilst I try to get as much completed in the month, I know it’s ok if these have to be carried over to the following month.

Click link to my blankTo do list

Some days when there seems to be a lot of little bits & pieces to do, I will write a sub list just for the day. You need to be flexible, I do not always do the items in order of the list, if you know you only have 20 mins to spare, just chose a quick task to tackle, it’s not always practical to start a task you won’t be able to finish.

Lists can help a lot but don’t be ruled by them, sometimes life just gets in the way of your goals.

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