If ever there was a time that demonstrated the uncertainty and unpredictability of life, it’s now. Even if you’re young and you’ve got a stable income, it’s beneficial to start planning now to reduce financial stress in the future. Here are some steps you can take.
Saving
With many people facing a very uncertain few months ahead, the benefits of saving cannot be underestimated. Budgeting and putting money aside can help to prevent overspending and create a nest-egg. If you don’t already save money on a monthly basis, it’s a good idea to set up a direct debit on your payday. If you can afford to put even a small amount of cash aside each month, this will help to create a more stable, secure future. Use budgeting techniques or apps to work out how much disposable income you have in an average month and save whatever you can. If you transfer a lump sum as soon as you get paid, this will enable you to plan the rest of the month and reduce non-essential spending.
Retirement planning
If you don’t plan to retire for another 30 years or so, you might not think that you need to worry about pensions or investments at the moment. The truth is that the sooner you put plans in place, the better. If you don’t have a pension already, or you’re unsure whether your current pension is the best option for you, it’s worth seeking advice. If you’ve already taken out a pension, and you’re concerned that you have been misled, it is wise to investigate SIPP pension claims. To avoid finding yourself in this situation, if you haven’t already got a pension, research before you sign on any dotted lines and don’t hesitate to ask for help if you’re not sure which product is best for you.
Creating an emergency fund
You only have to read the newspapers or listen to the headlines to see that a bolt out of the blue can cause financial problems for anyone. Even when life seems to be rosy, nobody knows what is around the corner. Having an emergency fund will provide peace of mind and financial support if you do find yourself in a difficult situation. An SOS fund could help to cover you if your hours were cut at work, you lost your job, you had an accident, or your home or car needed urgent repairs. Start saving on a regular basis and look out for savings accounts that offer high interest rates or the ability to save on tax, for example, an ISA. It’s also worth ensuring that you have insurance policies to protect your home, car and family. If you have insurance, this can cover unexpected costs and reduce anxiety linked to money problems.
Nobody has a crystal ball, and you never know what the future holds. Taking action to manage your finances and start saving, and planning for the future now will be beneficial in years to come. Try and save more each month, take advice from experts on board and plan for your retirement.
When a loved one dies, some of us may expect to inherit money. This could be money tied up in property or funds in a bank. Some of us struggle to know what to do with this inheritance – should you invest it, and if so where? Below are just a few tips on how to handle money that you have inherited.
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Don’t spend it all straight away
There’s nothing stopping you from splashing all the money straight away. After all, it’s your money. However, you may want to consider all the choices that you have rather than splurging half of it on an impulsive shopping spree. It could be money to spend on travel or it could be money to spend on a down payment on a home. Compare all your options before spending your money.
Find out if you have to pay tax on your inheritance
In the case of large amounts of money, you may have to pay inheritance tax. The exception is money that was given to you before your loved one died – this could be money left in a trust or even a property that was transferred over to your name before your loved one passed away. If the money is liable for tax, it could be important that you pay this tax first before spending it all.
Prioritise paying off your debts
If you have debts, it could be sensible to pay these off with your inheritance. It may not be as exciting as using the money for other purposes, but it will save you a lot of money in the future, possibly giving you a lot more disposable income to use. Paying off debts could be particularly necessary if you’re falling behind on payments or it’s affecting your credit score.
Get professional advice when investing
There are many ways you can invest your inheritance from savings accounts to stocks and shares. It could be worth getting professional advice using a service such as Equilibrium so that you can find the best place to invest these funds. After all, you don’t want to gamble away this money or put it in the wrong saver where it may only accumulate minimal interest.
Give money to family and friends
There may be family members and friends that can benefit from the money you’ve inherited. For instance, you may have kids that you can give the money to. If there was conflict within your family, realise that some people may have been deliberately left out of a loved one’s will – if you share your money with these people, realise that it may be going against your loved one’s wishes. That said, it is your decision how you spend your money.
Consider giving some to charity
If you’ve inherited a lot of money, you may feel like giving some to charity. This could be a charitable cause that you feel strongly about or a cause that affected your deceased loved one (a great way of honouring them). Take your time to compare charities that are out there using sites like Charity Choice. You may even consider setting up your own charity if you inherited a particularly large amount of money.
Take a look at the infographic below which has some great data and suggestions courtesy of Annuity.org
Whether you’re keen to move around the corner, or you’re thinking of upping sticks and relocating to a different city, county or country, it’s wise to plan ahead if you’re selling your home. Unless you find yourself in a situation where you need to sell unexpectedly, it’s worth taking a few steps before the for sale sign goes up.
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Sprucing up your property
If you’re preparing to put your house on the market, it’s natural to want to get the best price. Before you invite agents around, or start taking photographs for galleries and brochures, take a tour of the property, note down any jobs that need doing and give your home a spruce. Simple things like freshening up the paintwork, fixing broken doors and cleaning the windows can make a huge difference. It’s also a great idea to clean and tidy up and to declutter.
Many people will judge properties based on aesthetics and the images they see when they look online. It’s also important to note that your home will attract attention when there’s a for sale sign up outside, so enhancing curb appeal is a good idea. Paint the front door, add plants or a hanging basket to make the property more welcoming and tidy up the driveway and front garden.
Choosing an agent and exploring selling options
When it comes to selling your home, there are several crucial decisions to make, including how you’re going to sell the property and which agent you’re going to choose to market your home. Most people sell through estate agents that manage viewings and the negotiation of offers, usually over a period of time, but auctions are becoming more popular. If you’re keen to sell quickly, or you want to maximise your chances of getting a good price and wrapping up the transaction without any ups and downs and unexpected turns, you might be interested in considering an agents property auction. Some agents deal with auction properties, as well as traditional sales. If you are thinking of selling your home at auction, it’s important to think carefully about setting a reserve. Whichever method you choose, it’s worth doing some research into house prices in your local area and asking a series of agents to provide you with a valuation. The valuation will not dictate how much you get for your home. You might find that there’s a significant difference between the valuation and the offer price, especially if the supply of houses outweighs the demand in your neighbourhood.
Putting future plans into place
If you’re looking to sell, it’s wise to think about and plan your next move. Selling houses can take months, even years, but in some cases, the entire process can be completed in 6-8 weeks. If you’re thinking about buying property, figure out a budget and start searching for houses that match your criteria. If you’re toying with the idea of renting, contact local agents, arrange some viewings and create a short-list.
Before you put a for sale sign up outside your home, take these steps. Hopefully, they will lead to a quick, seamless, stress-free sale.
Claiming benefits of different kinds will help you to maintain an income that supports you and your family. There are some benefits that you might claim when you are out of work, but also many benefits that are available to people in work. When you are claiming any kind of benefit, you’re sure to want to make the most of the money that you receive. It can be very helpful to have that money coming in, but it’s often not enough for you to feel as if you can live comfortably. If you are in receipt of any benefits or think that maybe you should be, there are various ways that you can make the most of them.
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Check You’re Receiving the Right Benefits
The first thing you should do is check which benefits you might be entitled to. There are many different benefits and tax credits, and they are even overseen by different governmental departments. This means that it can all get quite complicated, and you might be unsure which benefits you could have access to. The best thing to do is to use a benefits calculator, which you can find online, or get advice from an advice agency. Citizens Advice is one useful resource that you might find beneficial.
There are several different circumstances that could mean you are able to get help. You might be able to claim benefits if you are disabled or the carer of a disabled person. If you are a parent, you can look into child benefit and child tax credits. If you are not working or have a low income, you may also be eligible for some help. Other circumstances could make a difference too. For example, if you live alone, you can claim a discount on your council tax bill. If you are an older person, you might be eligible for the Winter Fuel Payment.
Claim Benefits While Working
The various benefits that are available aren’t only for people who are out of work. If you are working but still need help with money, you might be able to top your income up in various ways. Some benefits are based on how many hours you work or on your income. For example, you may be able to claim Universal Credit if you are on a low income, or you may be able to claim “new style” Job Seeker’s Allowance if you work less than 16 hours per week. Universal Credit has replaced some benefits for most people. For example, it has replaced Working Tax Credit and Child Tax Credit.
Other benefits available for those in or out of work include Child Benefit. Child Benefit is available for children under age 16 or under 20 and in education or training. However, some of it may need to be paid back if the claimant or their partner earns over £50,000 per year. If you are pregnant, you might also be able to access the Sure Start Maternity Grant if you already receive other benefits, and you are expecting either your first child or a multiple birth.
Know How to Manage Your Benefits
When you receive benefits, it’s also very beneficial for you to understand how they work and how you can manage them. This isn’t always easy, but it’s often necessary to avoid getting caught out. Not only will it help you to know what you’re entitled to and what your rights are, but it will prevent you from accidentally spending overpayments and make sure you know what to do if any of your benefits are stopped. It’s important to know how you can manage your benefits, for example through using an online account, as well as who you need to inform if you ever have a change in your circumstances. You should know who to contact if you ever have an issue or need to query any decisions.
Appealing a Decision
Sometimes you might apply for a certain type of benefit, and your application might be rejected, or you might be awarded less than you think you are entitled to. When this happens, you might need to appeal the decision. Before you can appeal, you need to ask for your decision to be looked at again. This is known as a mandatory reconsideration. Within one month of receiving this, you will need to appeal to the Social Security and Child Support Tribunal. After submitting an appeal, you can provide evidence, and the appeal will be decided at a tribunal hearing.
Avoid Overpayments
One issue to be aware of with many types of benefit is overpayments. If you are accidentally overpaid, you will be required to repay the money. An overpayment might occur because you haven’t told the relevant body about a change in your circumstances. It could also happen due to a mistake by the other party. However, if you receive any overpayments, you need to correct the issue as soon as possible. This is why it’s also important to know how much money you should be getting and when. It will allow you to notice when you might be paid too much and question the amount.
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Understand How Income and Savings Affect Your Benefits
It’s also necessary for anyone who receives benefits to understand how your income and savings will affect your benefits. If your income rises or drops, it could mean the amount you receive in benefits changes. Even having savings can make a difference to what you are entitled to. If you have savings of up to £6,000 (or £10,000 if you are over state pension age), it won’t affect any claims. If you have savings between £6,000 and £16,000, everything above the lower amount is treated as a monthly income of £4.35 for each £250. If you have more than £16,000 in savings, you won’t be entitled to any benefits affected by savings.
Create a Budget
Having a budget is always helpful, but it can be especially useful if you receive any benefits. A good budget will help you to make sure that everything you receive is put to work, and that all of your essential expenses are covered. It can be worth spending some time looking at your essential outgoings, including rent, utility bills, food, clothes, and anything else that you need to pay for day-to-day. When you create a budget, it can help you to find the different ways you might be able to save money. You will get a clear picture of the money you have coming in and going out.
Get Help with Home and Transport Costs
There are many ways you can access help with various expenses at home and transport costs. For example, the Winter Fuel Payment can help you with energy bills during the cold winter months. Another way you might be able to get help is through the various transport schemes. If you receive the higher rate PIP or DLA payment, you can use it for the Pentagon Motability Scheme or similar. There are also railcards and bus passes, for example for disabled people and pensioners. You might need to be receiving other types of benefit to access some of these schemes.
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Benefit from Free NHS Services (Dentist, Optician, Prescriptions, Etc.)
When you are receiving some types of benefit, you might be eligible for free health care when you otherwise would have to pay. For example, if you are receiving some types of low-income benefits, you don’t have to pay for dental treatment with an NHS dentist. You can also access free eye tests, as well as free prescriptions. It’s important to note that the criteria are different for people receiving Universal Credit. To be eligible for help with healthcare costs, you need to have had no earnings or had net earnings of £435 or less in your last assessment period, or £935 or less, depending on your circumstances.
Look for Discounts and Concessions
Receiving certain benefits, or the reason you receive those benefits could also help you to access discounts in other areas too. For example, many venues or shops will offer discounts or concession prices to disabled people and their carers or to people on low incomes. One example is that many arts venues want to encourage people from lower-income backgrounds to attend performances and exhibitions, and so offer discounted prices to make it possible for more people to attend.
Find Other Services Your Benefits Will Help You to Access
You may also find that your benefits entitlement can help you to access other services if you need them. This can include being able to attend a food bank, for example, if you need an emergency food package. You might be able to access grants from charitable trusts to help with other expenses, such as your utility bills. There are various organisations that are not run by the government, but that do offer their services to people receiving benefits. You can even get help with vet treatment from PDSA.
Make the most of the benefits that you receive by educating yourself and getting a good understanding of the benefits system. Once you know what you should be receiving, you can plan to spend it wisely.
Being a business owner means balancing your business’s finances and your personal finances. As well as making sure your business is bringing in enough money, you need to keep your own finances healthy. If you’re not personally doing well financially, it will make it difficult for you to continue running your business. Entrepreneurs can face some unique challenges because they take on a lot of risk, and they don’t have any support from an employer. If you’re trying to run a business while also fulfilling your own financial goals, there are a few key moves that you can make.
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Have an Emergency Fund
An emergency fund is the savings that you can rely on when you have unexpected expenses. Everyone should have one to help cover costs, such as home repairs or medical expenses. It’s even more important for entrepreneurs to have an emergency fund if they rely on income from their business. If your business has a slow month or anything starts to go wrong, you might be unable to pay yourself your usual salary. An emergency fund will help to keep you afloat. Building a fund worth at least three to six months’ expenses will give you a strong safety net.
Be Careful with Credit
It’s important to manage your business credit, but you also have to pay attention to your personal credit. It’s best to stay out of debt if you can and to balance any credit that you do have to make sure you’re not borrowing too much. Keeping your credit utilization ratio below 30% is smart. You should try to maintain a clean and solid credit record, so keep up with any payments and avoid missing any, even if you can only pay the minimum payment. This will help you if you want to secure any long-term debt, such as a mortgage, which can be tricky if you’re a business owner.
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Prepare for Your Future
Many entrepreneurs don’t think enough about their financial future. They might feel they can’t afford to save for the future or simply don’t consider it because they don’t have the benefits they might get from an employer. But by accessing some advice on retirement planning for entrepreneurs, you can start getting set up for your future. You can still be prepared for your future and ensure you will be able to retire, even if you don’t have help from an employer.
Give Yourself a Pay Raise
As your business grows, you can consider whether you can afford to pay yourself more. At certain times, it could be the right moment to give yourself a pay raise. Of course, you don’t want to do this too soon, when it’s also important to have money to invest back into your business. However, as your business grows, make sure that you are rewarding yourself for your hard work too. You deserve to benefit from the growth of your company.
Although you need to spend a lot of time working on your business, don’t forget about your personal finances. It’s important to pay attention to them too.
