Bank Accounts

Is it Worth Switching Current Accounts?

We see a lot of advertisements from various banks and building societies trying to tempt us to switch to banking with them. We also see advice saying that we should try to make the most of our current account. There may be features to entice us or perhaps even interest on the accounts that could look tempting. However, how can we decide whether it is worth switching?

It is worth starting by thinking about what you want your current account to provide for you. Most of us will want to have a debit card on the account, some will also want a cheque book and we may want an overdraft facility. It is likely that we will want to be able to be able to pay money in and draw it out easily, which may mean that we need a branch nearby unless we can do this in a post office or cash machine which we can access locally. We may want the account to be free, we may want interest on any balance we have in the account or we may be prepared to pay for an account if it comes with freebies that we will make use of such as insurance or interest. It is worth thinking through what you want from the account. You also need to consider whether your account offers all of those features or whether you would like to see if anyone else does.

Once you have your list of requirements you will be able to see whether there are any places that offer what you want. If there are some that offer lots of things which are better than you are currently getting, then you will need to consider whether you want to switch to them. Many people hold back from switching because they think that it will be difficult, take too much time or cause confusion with regards to their income going in and bills going out. However, these days it should be easy to switch in most cases. Banks have to help each other with this process by law and therefore it should not be complicated or problematic.

Whether you think that it is worth switching is very personal to you. You will need to take a look at what you could gain, if anything, by switching and whether you think it is worth it. You may be loyal to your bank, like the people in the branch, have dealt with them for a long time and therefore feel that it is right to stay with them. You may not like the idea of change and feel that anything that any other financial institution offers you will not entice you. However, it is worth thinking about what you could gain from switching as well as what you could lose. Consider whether that loyalty is worth it if you could get a better deal elsewhere. You may find that you get an even better service elsewhere and gain things financially as well, whether that might be some interest on your money, cheaper overdrafts or other good offers.

Another aspect to whether it is worth switching is whether you are happy with what you have already. There are some people that do not like their banks. They may feel the customer service is not that good, the charges are too high or whatever. If this is the case then you are more likely to switch. However, do make sure that what you are switching to really is better as you may find that although you do not like what you have, you are actually doing quite well compared to others.

So make sure that you do your research first and think about your expectations, whether your bank is living up to them and whether you think another may do a better job. Also remember that you can always switch back to your previous bank if you do not like your new one. Some people switch regularly so that they can keep taking advantage of good deals and others just do so occasionally when they seem something really worth switching for. It is worth calculating how much money you may save from switching as well as thinking about the advantages on top of the monetary ones.

Budgeting

Tips for Budgeting Towards a Big Purchase

If you want to buy something big, then you will have a selection of options available to you with regards to how you are going to afford it. Unless you have the savings available to pay for it, you will need to either save up for it or borrow money and then repay the loan. Either way you will need to find extra money to put towards the cost of it and doing this is not always that easy.

It is worth taking some time and thought to find a solution to do this. It can actually be quite straightforward but you will need a plan to stick to. If you normally save a certain amount of money each month anyway and you know this will be enough to cover either the amount that you want to save or the amount that you will have to repay on the loan, then you will not have to worry about it. However, it is most likely that you will need to find some extra money from somewhere and this can be difficult.

It is best to start by looking at what you normally earn and spend in a month and look at whether there are some changes that you can make. There may be some changes that you can make which will not have a huge impact on your lifestyle but will help you to save money by spending less. Switching companies for various things is a great way to save. So for everything you buy such as insurance, banking, loans, electricity, gas, TV, phone, broadband and even clothing, food etc, it is worth comparing prices to see whether you can switch suppliers or retailers and save money. If you change your electricity provider, for example, you will just need to spend a little time looking to see which is the cheapest and then you will be able to make a few calls and start paying less, it is very straightforward and probably similarly easy to swap gas, phone, TV, broadband or insurance companies as well. Put a note in your diary to compare prices each year as you may be able to swap again. This can be a great way to save sometimes a significant amount of money without having to put in lots of effort.

It can also be wise to have a think about how you could possibly earn more money and use that to boost your savings or more easily manage the loan repayments. This could mean trying to get more money in your current job; perhaps asking for a pay rise or working more hours if you can. This may not be possible in your main job, but it could be worth considering whether you should get a second job. This can sound very daunting, particularly if you do not have a lot of spare time, but there are a lot of opportunities which you could consider which do not have to be really time consuming. You could take on evening work or weekend work, but alternatively you could also consider taking on some work from home. There are more opportunities available now than ever before for work from home jobs and so it could be well worth thinking about them. Consider what you might like to do and you should be able to find a way of doing it online. It may not be consistent work or paid as well, but being able to earn money while you are at home can be a great way to get some income but still be in a relaxed atmosphere. You could try all sorts of things, perhaps something similar to the job that you do; if you are allowed to or something completely different. It could be related to your hobbies or interests, perhaps or just something that you have always wanted to do.

Spending less money is also an option to perhaps try as well or to do instead. Obviously, comparing prices, as described above and switching who you buy from can be a great way to save money, but if you need more than this, you may need to try other things as well. It can be worth considering whether you can cut down on the amount of things that you are buying as well as buying cheaper things. It is good to think about every single thing that you are buying and thinking about whether it is really necessary for you to buy that item. It can be difficult to remember to do this at first, but with time and practise it becomes easier and you will be able more automatically ask yourself whether the item that you are considering buying is really necessary.

Borrowing Money

The Cheapest Way to Borrow Money

There are many people that look for loans when they need to buy something or they are running short of money. It can be very easy to run out of money before you get paid or to want or need something expensive and not have the money available to pay for it. Any sort of borrowing is expensive as well though and so it is wise to find out what the cheapest way to borrow is so that you do not have to spend more than necessary.

It can be tempting to just compare the interest rates between the different lenders and types of loans to see which is the cheapest. Although this will allow you to know what the lowest interest rate is, it is not a true reflection of the total cost of the loan. It is important to do a bit more maths than this. It is not difficult though. You need to think about how long you will be making the repayments for. The interest will be charged for as long as the debt is outstanding. Therefore if you do not borrow the money for very long, you will make less interest payments than if you borrow the money for a long time. The amount of money that you are borrowing also has a bearing as the more you borrow, the higher the amount of interest and the longer it is likely to take you to pay it back. Sites like Emu.co.uk with their representative examples make finding out this information easy.

For example, you will find that the interest rate on a mortgage will be very much lower than that on a payday loan. However, on a mortgage you will borrow hundreds of thousands of pounds over decades and it has been calculated that you will pay back the original value of the home three times before you pay off the mortgage. However, with a payday loan, you will borrow a small sum of money and pay it back within a month normally and may pay back half again what you borrowed, which will be a much smaller sum than the mortgage. Obviously, these are extreme examples and you will not be comparing these two types of loans, but hopefully it can help you to see why it is important to compare the amount you are repaying in interest rather than just looking at the interest rate.

It is also wise to find out what fees there are associated with the loans. There may be an administration fee for setting up the loan in the first place, for example. There will be fees for late or missed repayments, which are worth being aware of. There may be fees for repaying the loan early. It is worth looking at all of these.

Once you have all of this information, you will then be in a position where you can compare the loans and see which will be the cheapest for you. It will take time and effort to do this, but will be worth it because you will be able to save money on the loan costs. This can make a considerable difference to the overall cost of the loan. If you are not confident in making these comparisons then it could be worth asking a financial advisor for help. You will have to pay one if you want independent advise, but it can be worth it if you are borrowing a lot of money as you can save more than you pay out in fees to them.

It is worth noting that the advertised interest rates are not always the ones that you will get when applying or a loan. Be prepared for this when comparing as you may be misled into thinking that one is offering you the best deal, when it is not. The reason the rates may be different could be if you have a poor credit record and the lender thinks that you are a risk. They will then offer you a higher interest rate because they want to make more money out of you initially in case you get to a stage of not being able to pay back the loan. It is therefore worth checking that your credit record is correct, which you can do for free online and making sure that you do what you can to make it as good as possible before applying for any loans. Then you are more likely to be able to take advantage of the better deals that are available out there.