Entries Tagged 'saving' ↓

If you had a hole in your trouser pocket, you wouldn’t keep putting money there. Instead you would look to first mend the hole. It is the same with our finances. We work very hard to earn money and then due to bad habits and mistakes we can easily lose our money almost as soon as it enters our bank account.

If we can stop doing these things we will make a huge improvement in our personal finances, for relatively little effort.

1. Eating out every Day

Eating out is an expensive way to live. It can be buying breakfast on the way to work or ordering a takeaway in the evening, you will find both take a high % of your disposable income. Even if we just get a takeaway coffee with pastry in the morning it can become very expensive if we make a regular habit of it. It takes a little more preparation, but eating at home will save us considerable money and it is also easier to eat what we want, rather than what restaurants are serving

2. Burying Your Head in the Sand.

I know many people who have problems with their personal finances and rather than trying to solve them they just try to ignore them. Unfortunately, trying to ignore issues of debt does not make them go away in any way. Instead what happens is that we end up with avoidable charges and interest payments. This is definitely a case where ignorance is not bliss. If necessary take the advice of others and find a way out of the debt.

3. Keeping up with the Joneses

If we are committed to keeping up appearances we can end up spending an awful lot of money on expensive brands. If you feel obliged to buy clothes from certain designer labels try changing your expectations. Maintain shows of wealth and fortune are not a reliable way to bring happiness and peace of mind; there will always be someone with more luxury goods than yourself. Change your mindset and look to buy something which offers good value.

4. Always Buying Brand New

There are many items where you can save considerable money through buying second hand. In particular this applies to cars, TVs and videos. Here you can make considerable savings with no loss of utility. This is not just making small savings, it involves making big savings.

5. Holding debt on Your Credit Card.

If you have a credit card debt and are paying interest at 17% your finances will inevitably continue to deteriorate. It is difficult to pay off the interest charges and reduce the credit card balance. Therefore, you can be paying a minimum payment for years and yet the debt will continue to grow. This is an example of how poor financial planning can make things worse. With a little planning and rearranging of your finances you can try to pay off the credit card debt saving yourself interest payments.

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Despite slight falls in house prices, most first time buyers still face a mammoth task in saving for a deposit. Nevertheless, the break in rising house prices, at least, gives young aspiring homeowners the opportunity to try and save sufficient funds for their first mortgage deposit. These are some suggestions to save money for a deposit, some more painful than others.

Live with parents / relatives.

This may not sound very appealing, but, it can potentially save significant sums on your monthly rent. As this can be the biggest % of your monthly outgoings, it makes sense to look closely whether you can reduce your monthly rent. If moving in with your parents is not an options, look carefully to see if you could find somewhere cheaper to rent. Even a 10% reduction in rent, can save £100 a month. Don’t move to a place where you would be unhappy, but, cheaper doesn’t necessarily mean worse.

Make Saving A Priority

Rather than spending money and saving what is left over. Make it a priority to put aside a certain amount each month. This could be the first priority after receiving your paycheck. By making saving a priority it is possible to make real savings each month.

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Unfortunately house prices in the UK, US and Canada have increased much faster than incomes. Despite the recent slowdown in house price growth, it is not easy to save a 10-15% deposit for a house. However, if you are frustrated with paying several hundreds of pounds a month rent, it is worth trying to save for your first deposit so that you will soon be able to get on the property ladder.

These are some tips for saving for your first mortgage.

1. Be Committed

It is always easy to find something to spend our money on. However, if we really wish to save for a deposit, we have to give it a high priority. One way is to have a target income to save each month. This can be a % of your disposable income or a fixed amount. After getting paid you can put this amount straight into the bank. At least by doing this you will not be tempted to fritter it away on other things.

2. Save on Rent.

The most effective way to save money is to look at whether you can reduce your biggest outgoings. This is likely to be your rent. It is a catch 24 situation. You want to buy a house because renting is so expensive. But, it’s difficult to buy a house because you pay so much for rent.

• To reduce the cost of renting you could look to see if you are able to rent out another room.
• A drastic option may be to live with your parents / relatives. This may create a slight loss of freedom, but, if the rent is sufficiently low it can really give you chance to save a considerable amount.
• A final option is to move to a different area where the cost of renting is lower.

3. Direct Debit

If you set up a direct debit from your current account to a savings account you will make sure you save what you want to. Look upon this outgoing savings as a necessary bill like paying for electricity.

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