Is Investing Worthwhile?

It is always a good idea to think hard about any financial decision that you are making. There are always pros and cons and it is a good idea to review them before you decide what to do. With investments this applies as well. We can invest in all sorts of things. But the pros and cons can be generalized and so it is a good idea to think about them so that you can decide whether you want to go ahead with investing or not.

Advantages

Investing can generate a lot of money. There are lots of different types, but generally the return on an investment can be higher than the interest that you can get on savings. When interest rates are low this can be even truer as the amount of interest that you can get on savings can be very small. Even if you find a higher interest account, perhaps such as one that you have to give notice on withdrawals or you tie your money up for a number of years is unlikely to give a very high return compared to what you might get when you take out an investment.

You will normally have to tie up money for a long time when you make an investment or else you may not benefit form it. This means that you cannot touch the money and it can be useful for some people to do this. It can always be tempting to spend money when you have a lump sum of it within easy reach and so if you tie it up in an investment then you will not be able to do this.

Disadvantages

When you take out an investment you are taking a risk. When you make an investment you buy an item and hope that it will increase in value before you sell it again. This item is often a share in a company, a house, a painting, an antique or something like this. This means that you buy an item and they you rely on it increasing in value before you sell it. However, there is always a risk that the value of the item might go down. For example, you might buy shares in a company and perhaps that industry suffers and the value of the company goes down as their profits fall and this will mean that the value of the shares go down. This means that you could end up losing some of the money that you have invested and there is even a chance that you could find that the value completely drops and you get nothing back at all. Although this is rare, it is a good idea to be prepared for this and only invest money that you can afford to lose.

The need to tie up the money as well, means that you cannot use money that you need, particularly if you need it quickly. If you invest in a managed account, then it is less likely that you will lose money, but you will still need to keep it tied up for a long time, to make it worth it. Therefore, you need to only use money that you can guarantee that you will not nee din the short term.

Some people with investments will panic and sell up when the value falls. So if they have shares in a company and the value drops, it means that they will sell them quickly, hoping to cut their losses. However, this can mean that they will end with less money than they put in and had they left the money invested, they could have gained something from it. Therefore, it is wise not to buy investments if you think that you will get twitchy and worried and decide to sell up quickly.

How Does Credit Scoring Work?

There are many terms that often get confusing when it comes to credit and credit scoring is one of them. It is a term that is used a lot but it can be tricky to know what it actually is and how it works.

What is Credit Scoring?

When you read certain information, watch some adverts etc it can seem like credit scoring is something that is an agreed practice with a system in place. This would imply that every person has a score and we will know whether that is bad or good and this is used by people such as lenders to decide if we can have a loan. Unfortunately, this is not the case. Credit scoring is not a standardized scoring system. We all have a credit report but there is no score. This term is something which has been invented and therefore credit scoring is not a thing.

How Does it Work?

What actually happens is that someone will look at our credit report and then use the information on there to decide about whether they want to take us on as a customer. It is often used by lenders to see whether they will be prepared to lend us money as they will want to see whether they think that they can trust is. They will all have a different method for doing this though. They will have a look at the different details on the credit report and use that to judge us. For example, they might want to see whether we have repaid loans on time in the past and if we have, they will trust that we will do this again. They might want to see that we are making payments on time now, perhaps for things like utility bills and that could make them think that we will be able to repay them as well as we are managing our money well. They might look at the loans that we have applied for recently such as those offered at Boutell.co.uk and if we have applied for a lot or if we have been turned down, that might put them off an make them feel that we are desperate for money and so they will not want to take us on or they may feel that if one lender has turned us down, that they should as well.

The problem is that they all have different ways of judging people. There are even rumours that some lenders will prefer to take on a borrower that has missed a few payments in the past because they can profit more from them as they will be able to charge them more money. It is very hard to know whether this is correct or not and best to try to pay everything on time so that you do not have to pay the extra fees associated with doing this.

Can I Improve it?

There are a few other things that you can do which will help as well. You should make sure that your credit record is correct as if it is not it could work against you. If it shows you still have outstanding loans that you have actually repaid, then this will not look good so you will need to get that corrected. You should also think about whether you will be able to do other things to help it. Perhaps paying off some loans, not applying for too many loans and trying not to apply for one you will be turned down for. Also, make sure that you make all payments on time as well as repayments to impress them.

How much Shall I set my Spending Budget to?

It can be tricky at times actually working out how you should set your budget. Obviously, the specific amounts that you set, will very much depend on what your specific financial situation is, but there are things that you can do which will help you to decide what it will be, that can apply to everyone.

Work out How Much Comes in

You will need to start by calculating how much money you have coming in. That should not be too difficult as it is often the same amount. Look back at your recent bank statements and you should be able to see how much this is. If you pay varies, perhaps because you get paid per day or because you do not always work the same hours, then this could be a bit trickier to do. You could choose to take an average but it could be better to take the lowest level. This is because this is the worst case scenario and if you can budget for that, then anything extra you get, you will be able to do with what you please.

Calculate Costs of Essentials

The next step is to work out how much you spend on essentials. This is things that you have to pay for either because you need them, such as food and electricity or because you have a commitment to pay for them, such as loan repayments or mobile phone contracts. We do not always pay exactly the same out each month and so this can be tricky as well. It is likely that the amount that we spend on heating, for example, will be more in the winter and we go out more in the summer so spend more on that. It can therefor be a bit tricky. Like with income, it can be worth making a worse case scenario approach and planning for the most expensive months, then you will be able to be really confident that there will be enough money available.

Consider Keeping Some Back for Emergencies

It can also be worth thinking about whether it might be a good idea to keep a little extra money by just in case you get an unexpected expense crop up. This could be less necessary of you have some money in a savings account as that will be there if you need it. However, if you do not have any savings or very few, then it could be worth keeping a bit extra just in case. If you end up not having to spend it, you could then pop it in a savings account and start to build some up.

Once you have done all of this, you will then know how much you have left to spend on treats for yourself. This will obviously very much depend on how much your income is and how much you have spent out of it. Therefore, it is a figure that will be different for everyone. However, you may decide that you do not want to spend all of this but just a percentage of it and you want to work out how much that will be. It can be worth thinking about what you want to buy with it and whether you have any other financial future goals that you need to target. If you are looking to pay off a loan or put money in your savings account, then you may want to allocate some of the money there are therefore reduce the amount that you have to spend on non essentials. However, you need to get a balance as you do not want to feel like you are being deprived of things as this could make you go against the whole idea.

Which Bank Should I Borrow From?

If you are looking to take out a loan, then you will be choosing between different lenders. It can be quite daunting as there are so many different banks to choose from that will potentially be able to let you have the money that you need. There are some things though that you can think about which will make it easier for you to be able to choose between the different banks and it is good to consider these things so that you are able to make sure that you will be using the bank that comes closest to your needs.

Well-known              

Some people like to use a bank that they have heard of. They feel that using a well-known bank will be really useful to them because they feel that they will be a better bank. People seem to think that a bank that is well-known will be better as they have a reputation that they will want to uphold. Unfortunately, this is often not the case. As people believe this, then they will bank with that particular place without checking their reviews and reputation. Some people even assume that as they have heard of a bank it must be good but when asked, they cannot remember why they have actually heard of them. It could be that there was a negative news story, that they pass the branch each day when they walk to work or that they have seen an advert for it. None of these are good reasons to use a bank so it is really wise to consider whether banking with a company that is well-known is actually a good idea at all and it might even be the case that it could be better to use one that you have not heard of.

Good Reputation

It can be interesting to a lot of people to look into whether a bank has a good reputation or not. They might want to ask people they know about this. It can be good to ask them about whether they like the bank that they are with and if they would recommend them or whether there is something about it that they do not like. If they either like or dislike the bank strongly, then it is a good idea to ask then why and that will help you to decide whether you agree with their reasoning and think that you would agree with it.

Good Reviews

It can be a good idea to also look at the reviews that the bank has got. These can be biased, but they can also be a useful way to find out more about them. It is wise to use a trusted website to try to find reviews on; one that you know is less likely to have bias. It is not always easy to tell, because ethe bank could of course, pay people to give positive reviews, review themselves positively or even leave negative reviews against other banks. However, hopefully, there will be enough reviews to allow you to be able to make up your mind about them.

Easy to Use

It is also a good idea to think about how easy to use the bank will be for you. Some banks will offer just one way and others a mixture, for example you may have to deal in branch, by post, over the telephone or online. It is good to think about whether there is a particular method that would work better for you and therefore whether that is something that you will be looking for in the bank of choice.

How to Repay a Payday Loan

When you are thinking about taking out any loan, it is a good idea to make sure that you think about how to repay it. This is because this is the most important thing to consider as if you miss a repayment, you will always have to pay additional charges and therefore the loan will be more expensive. Even if you are able to repay it, you will need to make sure that you are also able to pay for everything else that you need as well. Things like food, travel, utilities, rent and other loan repayments will also need to be paid for and you will need to make sure that you have enough money for those as well. There are things that you can do which will make it easier for you to be able to repay any loan. With a payday loan, this can be even trickier as you usually have to repay it all in one go on the next day you are paid. It is therefore even more important to be well organized and make sure that you plan things properly.

Find out How Much you need to Pay and When

It is important to start off by working out how much you will need to pay and when. This means that you will be able to plan better. It can be tempting to guess this, but it can actually be quite complex. As well as calculating the interest added on there may also be fees too. Therefore, it is a good idea to think about actually contacting the lender and asking them for the figure so that you can be completely sure that you have got it right. With a payday loan you should know the repayment day as it will be the day that you are paid.

Calculate How Much You Can Afford

It is good then, to have a look at a few of your previous bank statements, so that you will be able to see whether you can afford the repayments that you need to make. This will be a case of looking at how much money you have coming in and seeing whether that will be enough. Not just to cover the cost of the loan repayment but also all of the other essentials that you need to pay for as well. Think about the regular payments you make and the items that you need to buy. Add up the cost of all of these and take this away from your income and you will then know what you have left available to spend on everything else, including a loan repayment. You will then know if you have enough money and it will help you to decide whether the loan will work for you. Of course, if you have already taken out the loan, then you will need a plan.

Consider Other Ways of Getting Money

There could be some different ways that you can get the money that you need. This means that you will be able to hopefully raise the money and not have to be so concerned about repaying the loan. There might be different things that you can try as well. It can be a good idea to start with looking at the items that you are buying and seeing if you can buy cheaper ones instead. You might be able to compare prices on items and pay less. You may also be able to delay buying some things for a while until you can afford them. You may also be able to find some opportunities to make a bit of money, perhaps selling things you own and no longer need, doing some online or freelance work, finding some temp jobs or something like that.