How to Grow Your Savings in these Tough Economic Times

November 22nd, 2013

Introduction

Although there are some signs indicating that Britain is coming out of the recent double-dip recession, many are still feeling the full effects. The increased cost of living has forced many to make cutbacks on their spending or take on some extra hours in order to compensate.

There is however a select few who have managed to save some money, however with savings rates struggling to beat inflation, these people are now left with the dilemma of where to stash their hard earned cash.

Throughout this article we are going to discuss the various options available to you, weighing up the advantages and disadvantages of each account:

Instant access accounts

If you’re looking to grow your savings then realistically, an instant access saver is not the best option for you. Rates rarely beat 1.5% and with inflation sitting at around 3% – you’re money isn’t going to be growing.

However, where instant access accounts are helpful is when you’re looking to build an emergency fund. The fact that you can access your money as and when you need it makes them the perfect emergency saver account.

Fixed Rate Bonds

Fixed rate savings accounts offer better rates than instant access accounts however they are not going to set the world alight! The top seven year bond offers 3.5% interest; however you will need to lock your money away for seven years before you can have access to it and anything you do earn will be subject to tax.

Often fixed rate bonds will require a minimum initial deposit of £5000 so these are generally designed for those with larger amounts of savings rather than someone who is just looking to establish some.

Cash ISAs

Generally, the fixed rate cash ISAs will offer the best rates with the current market-leading four year deal offering rates of 2.75%. However, if you want instant access to your money then you’re only likely to get rates of around 1.80%.

The main attraction of Cash ISAs is the fact that anything you earn is tax free which means that rates you see are the rates you get.

Peer-to-peer savings

An alternative option to the traditional savings account is to become a peer-to-peer lender. This works on the basis that you lend your money to borrowers and then receive interest as and when the borrower repays the loan. Despite being subject to tax, the interest you will receive by becoming a peer-to-peer investor will be very attractive – even a higher rate taxpayer could earn almost 3.5% net interest.

The great thing about peer-to-peer investing is that you choose how much money you lend, how long to lend it for and your projected return. You are then free to do whatever you want with the monthly repayments you receive.

Conclusion

Despite savings rates being at their lowest point for a number of years, you shouldn’t be completely put off the idea of saving. After all, having some savings ultimately safeguards you against financial problems that you could run into.

When deciding what savings account is most suitable for you there are a number of things to take into account:

  • What are your savings intentions?
  • Will you need instant access to you money?
  • Have you already established savings or are you just starting out?

If you’re just starting out and need instant access to your money then an instant access account or a cash ISA maybe the most suitable option for you. If you’ve already established a relatively significant amount and are looking to get the most you possibly can out of it then a long term fixed rate account or peer to peer investing may prove the best option.

 

Talking About Money – Why Don’t We Do It?

October 4th, 2013

You may find it easy to talk to your friends and family about anything; illness, relationship problems, your plans for the future…so why do we balk at speaking about money? Some may even say it’s the last real taboo. How many times do you make assumptions about how your friends are doing money-wise? If your neighbour gets a new car, do you automatically assume that they’re doing well financially? Or perhaps they’ve downsized and you’re left wondering if they’ve got issues?

Making assumptions is easy to do but ultimately gets you nowhere. That friend you’ve got who always has something new to wear, gets her hair done regularly and likes to splash the cash on nights out may not be worth your jealousy. The only way to find this out is to know what she earns and how she manages her finances, and it’s unlikely that you’ll ever find out all the details.

We all like to put on a bit of a front and pretend everything is okay. This is a natural defence mechanism, so when something goes wrong, it can be difficult to bring down these barriers. However, this is exactly what you should be doing in a problem situation; without help and advice, sorting out money problems can be very difficult indeed.

Speaking to family about money is essential, especially older relatives, as they may have specific instructions to pass on to you in the event of their passing. Although it may seem morbid, sitting down with immediate relatives and discussing their wishes may well help you when the time comes, as being faced with the task of sorting out a loved-ones finances having previously known nothing about them can be confusing and stressful.

Talking to friends about finances may be slightly harder, especially if you feel that your reputation could be damaged if they knew about money problems you’re having. Although it can feel scary, being open about your finances could be a huge relief to them – they may be having the same issues and may welcome your support and input. You may find that your friends have some excellent advice for you, and that mate who always seemed to have the best of everything may even reveal their secret.

If you’re in a serious relationship, and especially if you’re living together, talking about money is very important. Working out who pays for what, where you both stand on debt and if you’ve got similar plans for the future from the get go can help you to avoid arguments in the future. Once you’ve broached the subject of who makes what, then future conversations about money should come a lot more easily.

Being more open about money in general can help you if you get in a pickle, or if you’re keen to understand something which has caused you some confusion in the past. Being confident to ask for help is important for many reasons, not least the speedy recovery of your finances if you get into difficulties.

 

 

 

Manage your Homes with Personal Loans!

July 18th, 2013

People seem to be running out of funds almost always. Most of us are always in search for loans to settle debts incurred due to various causes. Even the rich people are in need of funds. The only comfort for the homeowners who are in need of loans is that they own a house which can come to their rescue while applying for loans.

Home equity can be increased with the use of personal loans irrespective of the credit score. It is a good job to invest in home to increase the equity value. Bad credit personal loans can be the best option to make it possible.

For those who are trying to obtain a refinancing loan, it is not easy to get the offer with low interest rate due to the low equity value of the home. The poor credit will be the added setback in availing loans for the nominal rates. It becomes necessary to seek a personal loan for increasing the home equity. By investing a greater amount of money into the home can increase the equity. This has an impact on the interest rate for the refinancing loan that you intend to avail. Poor credit personal loan helps to increase the equity of home effectively.

There are lenders who are willing to offer up to $20,000, even if the credit score is bad. This is a potential amount that could be used to increase the home equity and hence the home mortgage refinancing loans can be availed with lower interest rates. However, you can opt for small amount of loans as per your requirement. The interest lowered will be highly beneficial in the long run. Consulting a financial expert will guide you as to how you can increase the home equity with unsecured loan.

As a homeowner, a huge amount of your money must be tied up in your house. A home owner personal loan can enable you release the equity tied up. You can do that without selling the house. You can continue to live in the house and obtain funds against it. Since the lender offers against the home, the loan is considered to be a secured loan and the borrower can enjoy the benefits that come with the secured loans. The rate of interest is the biggest advantage over the unsecured loans in which you are charged high interest rates. The repayment terms are also flexible and the monthly payments are lower as the interest rates are lower. And the approval is instant as the lenders have no risk in offering the loans against the house.

The homeowner personal loans can be used for any purpose and since you can get a huge loan amount, you can use it for home improvement. For those who already have a loan against their house, they can obtain a remortgage at a lower interest rate than that of the existing loan. This enables saving money and also to release the tied up equity.

Make the Best out of Personal Loans!

July 18th, 2013

Whether to consolidate the debts incurred through credit card usage or to renovate the homes, or for any other purpose, personal loan is one of the common solutions. With various options available, you should learn how to choose the plan that suits your needs.

You need to get the personal loan comparison guides and make a comparison to choose the best. The interest rates of various companies should be noted. Though there can be changes in the interest rate when the deal gets closed, the change could be based on the one that is mentioned in the initial quotation.

The repayment plans can be favorable in some companies and there may be nominal fees in some other companies. While being particular about the interest rate, there are chances that you need to pay more towards fees. An accurate calculation should be made to get more or less an exact cost of the package.

There are basically two types of loans for bad credit, secured personal loans and unsecured personal loans. To obtain a secured personal loan, you need to produce collateral and the interest rate will be lower compared to unsecured personal loan in which the borrower is not required to submit collateral. The secured personal loan is less risky for the lender as there is something to rely on if the borrower defaults on his loan.

This is the reason for the lower interest rates in secured personal loans. However, secured personal loans are risky for the borrowers as there are possibilities of losing the property set as collateral in case the borrower is unable to make repayments in time. Mostly, the house is presented as collateral in secured personal loans. The low interest rates in secured personal loans can be considered advantageous. When you plan to avail loans, you can estimate the affordability to repay. This will reduce your stress while repaying. Your house can be retained with prompt repayments. If you manage your finance wisely, you can save a substantial amount and that could be diverted to make extra payments monthly and by this method, you can settle the loan earlier than the specified time and your credit ratings will improve as well.

There are bad credit personal loans for those whose credit ratings are poor already. Here also we have secured and unsecured loans. The interest rates are extremely high in unsecured bad credit personal loans as the lender has nothing to rely on, neither your credit nor any collateral. If you credit rating is poor and if you can offer something as collateral, it is good to select secured unsecured loans as the interest rates are not high as in unsecured bad credit personal loans.

Depending on your financial condition and your needs, you can make a proper plan and calculate the needs and ability. This will help in availing loans that fit your requirements and your capacity to repay. Since the cost depends on the type of loan that you select, the savings also depend on what type of loan you need. By thorough understanding of the terms and conditions of the loan and your needs, you can do the best to save on personal loans.

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