General

How to Future Proof your Borrowing

If you have loans then you may worry about how they might affect you in the future. There are many things that could change in the future with the UK economy, the companies we are borrowing from and in our personal lives which means that we need to be careful to avoid getting into financial trouble as a result. There are things that we can do that could help us to manage better if interest rates go up, wages go down and our lenders start charging us more.

Put away some savings

If you have some savings behind you then you will have some extra money to help you to make ends meet if you should run out. This will provide you with peace of mind and could actually get you out of a hole should you need to be. If you do need extra money and you cannot borrow or you are running short of money for repayments then you will have this money to fall back on. The best way to save is to set up a direct debit to pay some money into a savings account each time you get paid. Then try not to spend that money unless you have no other choice and really need it. It can take quite a bit of self-discipline to save money and not be tempted to spend it but setting up the direct debit helps you to remember to save and hopefully if you keep in mind the purpose that you are saving to help you nit be tempted to do so.

Compare all prices

If you get into the habit of comparing prices all of the time it can really help. It can firstly help you with being more aware of how much you are spending on things and you may decide to change your spending habits as a result. You may also decide to opt to buy cheaper things so that you will have more money available to save. Even if you do not decide to change your spending habits at this time, if you continue to make these comparisons then if you do need to reduce your spending you will know where you can then change your spending habits.

Reduce spending

By reducing spending you should be able to have more money to spend or save. Then you will be able to put money into your savings account or put it towards paying back interest payments that have gone up. Look to cut down first on things that you can manage without; luxury items. Then look to spend less on necessities if you have to. You can do this all of the time and get into good spending habits and save up some money or just do it occasionally and really put it into practice when you need to.

Find a permanent job

Having a permanent job can give you a lot of security for the future. You will know that you have a regular income and that it could last. There are many people these days that have contracts where they are not permanent employees and this means that they do not have all of the benefits associated with a permanent job. So they will not have a pension scheme, sick pay, holiday pay and things like this. More importantly they will not have any job security. If you are worried about your financial future then having a permanent job is the best way to get job security. Although these days people tend not to work for the same company for their who career in the way that people did years ago, it can still feel good knowing that you are more likely to still have a job in the future.

So there are many things that you can do to make sure that you are financially secure in the future. This will enable you to feel confident that you will be able to repay your debts in the future as well as now. It is wise to get into good spending habits, save money and get a permanent job. All of these things should help you to protect yourself against anything that might come along in the future that could make it harder to repay your debts. Increases in interest rates, increases in inflation or pay cuts will make things tricky but if you have some savings behind you, know how to spend wisely and have a secure job then you should find that you will be able to cope or at least be better able to cope than many others. So even if the economy is in trouble, your lender runs into difficulty or you have personal finance troubles you will hopefully have the resources to be able to get through it.

Read More
Store Cards

Should I use a Store Card so that I can Borrow More Money?

Store cards offer us the opportunity to buy items from shops without paying for them immediately. They work in a similar way to a credit card where you use the card to pay, then will get sent a bill after a while to give you the option to repay the full balance or a minimum amount. If you repay less than the full balance you will be charged interest on it. There are advantages and disadvantages to using a store card.

Offers from the store

As a store card holder you will often get offers form the store which are exclusive to card holders. This might be a sale preview evening, special discounts or things like this. This can be great as you will be able to save money compared with those that do not have a card. Often new card holders will get the best offers, but you will probably find that there are some advantages for all card holders.

Convenient

It is so quick and convenient to use a card when shopping compared to fiddling about with cash. You can just quickly get out your store card and have it scanned and then move on without having to have money with you and fiddle about finding the right amount and waiting for your change.

Expensive

One problem with these cards is that if you do not repay them in full they will be expensive. The cost is very similar to that of a credit card but usually a bit more expensive. You will not get charged if you repay the full balance but if you do not pay off all of it then you will get charged interest until the full balance is repaid. It could take you a while to do this and all of the time you will be being charged interest on what you owe.

Limited spending

You will be limited on where you can use the card. Unlike a credit card, which is very similar but can be used in most shops, the store card will limit you to only spending it in the specific store it is from and any other branches across the country. You may also be able to shop in stores owned by the parent company. However, you will still be much more limited than you would be with a credit card. This means that if you want items form a different store then you will either need to use your credit card or get a store card form them as well. If you have lots of cards you could find shopping confusing and it will be harder to keep track of your spending and make sure that you budget properly.

Overspending

It can often be tempted to spend more than necessary with a store card. Firstly it is possible that you will spend extra money just because you have the card. Any special offers could also tempt you to buy things that you may normally not have bought. Offers do this to people as they feel they are getting a bargain even if they are buying thangs that they do not want. If something is cheap it is only a bargain if you were prepared to buy it before it was reduced.

You will also be restricted to just spending in a few shops, This means that you may tend to go there and buy things because of having the card without properly looking elsewhere. It could be that there are cheaper places to buy those items and you are paying more than necessary just because the cad is restricting where you can shop.

Extra credit

So if you have a store card you will have access to extra credit. However you can only use it within that store. You will also be charged a lot if you do not pay off your bill on time. Having extra credit has advantages and disadvantages. It can mean that you can buy more things because you can borrow more money to be able to do so. However, you will also be spending a lot more money and increasing the chances that you will not be able to repay your bill. If you are happy to leave the debt unpaid for a while, this could mean that you will end up accumulating so much debt that it is a totally daunting amount to be able to pay off. The charges could go up and up and if interest rates go up as well you could find that you have a lot of debt that you are having difficulty coping with. So although having access to extra credit seems like a good thing, it can all depend on the circumstance. If you just want it to fall back on and intend to repay the card on time each month then it will not matter so much but if you only pay off a small amount and let the debt mount up then the charges will go up as well.

Conclusion

So it is really important to consider the cost of a store card before you get one. Think about how much extra you will have to pay if you do use the credit and not pay off your bill in full.

Read More
Back To Top