- A basic level of maths know-how is essential if you want to get the best deals, make sure you are not being ripped off, and at the very lest, divide up a restaurant bill fairly. And with calculator apps these days, there is no excuse.
- Stand on your own financial feet. Don't rely on your partner or spouse 100%. Even if they are the best at money management, it leaves you in a vulnerable position (e.g. post divorce or break up).
- Everyone needs an emergency fund that can be accessed at short notice and without exit penalties. You need a float of at least 3 months income. Set up a direct debit at the start of each month with all other key expenses. The fund will help at times of job loss, long term sickness or big reapair bill on house.
- Be sceptical. (1) Take advice from bank and building society with a pinch of salt - the staff are there to sell their financial products. Always do your own research. (2) Loyalty doesn't pay. Use insurance renewal reminders as a prompt to look at comparison sites to get the best deal. (3) For energy suppliers use cross compare on two comparion websites and make up your own mind who offeres the best deal.
- If you need help, ask. It's frighteningly easy to get into a financial mess. If this happens, don't agonise, just sort it out before it gets any worse. Ask a savvy friend or family member to sit down with you and help you focus.
- There's no such thing as a free lunch. If you see a deal for a free gift or holiday, check the small print. You need to know what's in it for the company (there is always something) and ask 'how much is it really costing me?'
- Look after number one. You may be the one who manages everyone else (children, partners, friends, elderly parents) but make sure you never neglect your own financial health. (1) Save money for you - put as much as you can in a cash ISA as you will pay no tax on interest you earn. (2) Don't underestimate the importance of paying National Insurance contributions, whatever stage of life you are at. NI gives you certain benefits and the right to a state pension. If you take a career break or don't earn very much, find out about paying voluntary contributions. (3) Don't kid yourself your state pension will be enough for you to live off. Go to gov.uk/calculate-state-pension/ to see what you will get. Hard to think about saving for retirement? Imagine what life would be without your current salary. (4) Auto-enrolment in your company pension scheme is a no brainer. Your employer contributes as well as you (and your savings benefit from tax relief). If you decide to opt out, effectively you are losing money.
- Do yourself a favour. Teach your kids good money management as soon as they start getting pcoket money and don't stop until they leave home. They'll be more financially independent as adults.
- Find a good money mentor. Someone who is financially astute and can learn from.
- Pick your plastic. (1) If you struggle to clear your credit card each month, don't use one. Otherwise a growing chunk of your monthly income will be swallowed up in interest, which is a pointless use of your hard-earned cash. (2) If you always pay off your card at the end of the month, get one that gives you cashback on spending so you make a bit of extra money for the zero effort. (3) Even if you are not a fan of credit cards, it's worth having one to use when buying big items and spending online. This way you can keep an eye out for fraudulent activity and get protection under Section 75 of the Consumer Credit Act (redress against the credit card company as well as the retailer if anything goes wrong).
Friday, 28 August 2015
Be a Money Expert
Top ten pieces of advice on money matters.
