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text 2002-12-29 03:02
13 tips to help save money if you live in London, from a financial expert

 

Because ‘savings’ and ‘London’ rarely ever feature in the same sentence

 

It’s no secret that London is home to some of the highest living costs in the world.

 

The median annual salary for London is £34,473, but there are many people – especially young people – living on well below this.

 

After rent and bills are paid, the remainders of pay packets go to food and necessities – so how are we meant to save for that big holiday or to get out feet firmly on the property ladder?

 

In light of Financial Capability Week this week we spoke to Andrew Johnson, Advice Manager at Money Advice Service who has revealed his 13 top tips for saving when you live in London.

 

  1. Loose change adds up

 

By the end of the week, many of us have a few coins left over in pockets and purses – and even down the back of the sofa. Gather up these odd coins each week and put them in a jar. Even just a £1 a week in loose change will give you a cushion of over £50 by the end of the year. Looking after the pennies really can mean the pounds look after themselves.

 

  1. Keep track of what you spend

 

Sometimes it’s hard to know where the money goes. Try keeping a spending diary for a week or two where you write down everything you spend from the smallest stick of chewing gum to filling the tank with petrol. This will help you identify items you might be able to cut back on.

 

  1. Reconsider your smoking habit

 

If you smoke 15 cigarettes a day, that’s costing you almost £2,000 a year. If you’d like to kick the habit and boost your savings into the bargain, get the NHS on your side. Use the NHS cost of smoking calculator to help you give up smoking.

 

  1. Make sure you’re getting the best deal on your bills

 

Shop around for the best deals for your phone, internet and fuel bills and review your suppliers every year to see if you’re still getting a good deal.

 

  1. It’s all about the side-hustle

 

There are no simple ways to increase your income. Possible options might be take on extra work – perhaps a job you could do from home, such as child minding, or turning a hobby into a small business, selling things you make. If you have a spare room, you might think about taking in a lodger.

 

How to find places in your budget where you can save

 

  1. Do up a budget

 

The best way to assess what you are spending and get control over your finances is to complete a budget. Our free Budget Planner puts you in control of your household spending and analyses your results to help you take control of your money. Alternatively try keeping a spending diary for a week or two where you write down everything you spend from the smallest stick of chewing gum to filling the tank with petrol. This will help you identify items you might be able to cut back on.

 

  1. Have a goal

 

Having a savings goal can help determine which account is best for you. If you have more than one goal you could use different accounts for each one.

 

  1. See if your bank offers bonus rates

 

Some accounts may offer a high bonus rate which is designed to tempt you in – but bonuses drop off after a certain period. If you don’t have time to keep switching, avoid accounts offering bonus rates and look for a rate that’s been more stable historically.

 

  1. If you don’t know where to start with bank accounts, try comparison websites

 

Best buy tables and comparison websites are a good starting point for anyone trying to find a savings account tailored to their needs. Not all comparison websites will give you the same results, so make sure you use more than one site before making a decision.

 

  1. Set up a savings account

 

If you want to earn a bit more interest then consider a regular savings account but remember, with these types of accounts or fixed term accounts you might not be able to access your money immediately without paying a penalty.

 

What is the best way to create a budget?

 

  1. Review your budget every few months

 

Life is unpredictable so try to review your budget and your spending if there’s a change, or at least every couple of months. You might get a pay rise, which means you can save more, or you might find your household bills increase.

 

  1. Put time aside to manage your money (like you put time aside to go to the gym, see friends etc.)

 

Taking the time to manage your money better can really pay off. It can help you stay on top of your bills and save £1,000s each year.

 

  1. Use an app to help you budget

 

There are also some great free budgeting apps available and your bank or building society might have an online budgeting tool that takes information directly from your transactions. Just grab as much information as you can about your income and spending (bills, bank statements…) and get started.

Source: blogs.rediff.com/lexusgroup/2002/12/28/13-tips-to-help-save-money-if-you-live-in-london-from-a-financial-expert
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text 2002-12-17 15:16
5 Big Retirement Money Mistakes to Avoid

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It’s never too late to start getting smart about money.

 

Maybe you’ve made it this far with few problems … you’ve done pretty well all alone just by winging it. Good for you.

 

But retirement planning isn’t about the past 30 years of your life — it’s about the next 30. And that’s harder. There are decisions you can’t undo, and mistakes are tougher to recover from when you don’t have a paycheck to back you up.

 

Here are five big money mistakes people make every day that a comprehensive retirement plan can help you avoid:

 

Written by Bill Smith, the host of the television and radio show "Retirement Solutions." Author of "Knock Out Your Retirement Income Worries Forever." He is the CEO of W.A. Smith Financial Group and Great Lakes Retirement Inc. His firms specialize in retirement income planning, wealth management, wealth preservation and estate planning.

 

Big Mistake No. 1: Choosing your retirement date based on age alone.

 

People often decide to retire at a certain age because it coincides with some well-known retirement milestone. They’ll settle on 65, for example, because that’s when Medicare kicks in, or 66 because it’s their full-benefit age for Social Security. Some even say 59½, because that’s when they can access their retirement accounts without any extra penalties. But before you decide when to retire, it’s crucial to assess your income needs and if you’ll have enough to meet them. If you retire before you’re 62, will you have enough money to draw from until your pension and/or Social Security payments kick in?

 

Remember, if you’re taking money from a tax-deferred account (such as a 401(k) or a traditional IRA), Uncle Sam will want his share. If you need $5,000 a month, you’ll have to withdraw closer to $6,500 just to net that amount. At the very least, you’ll spend down an enormous portion of your money very quickly, and you could put your entire retirement at risk. Which takes us to …

 

Big Mistake No. 2: Investing all your money in stocks.

 

If there’s a downturn in the market while you’re depending on your investment accounts for income, it could be devastating — especially if all your money is in equities. If those stocks drop 10%, 20% or more, and you have to sell them to pay your bills; you’re going to run out of money before you know it. The term “sequence-of-returns risk” should strike fear into every retiree’s heart. And don’t forget, those dividends that sound so good when you’re buying in aren’t guaranteed if things go bad.

 

Yes, with this bull market, it’s tempting to stay with stocks, but in retirement, a diverse portfolio is vital.

 

Big Mistake No. 3: Waffling on whether to buy an annuity.

 

There are pros and cons to annuities — the key knows what’s best for you and your unique situation. And that’s another reason why it’s important to have a plan. This isn’t a decision you should make based on what others tell you. Your adviser can help you determine whether you need an annuity based on whether you’ll require guaranteed income at some point in your retirement. And if it would benefit you to have one, he can help you decide how large that annuity should be.

 

Big Mistake No. 4: Losing track of an old 401(k) account.

 

This is another one of those things that gets away from people because they get busy. It isn’t that you forget about it completely — it’s just not getting any attention anymore because you aren’t adding to it. Which means the account probably isn’t being updated to reflect your risk tolerance as you near retirement? Also, if the account isn’t part of your overall plan, it may not include the proper investment vehicles to help you accomplish your goals.

 

You may think of it as benign neglect, but someone should be managing that money — either you or your financial adviser — whether you roll it over into an IRA or not. You absolutely don’t want to just leave those dollars out there, waiting for something bad to happen in the markets.

 

Big Mistake No. 5: Being unrealistic about rates of return.

 

People hear that the S&P 500 has averaged a 9.6% return since 1930, and that’s what they expect to earn. That number, of course, is deceiving. There are good years and bad years, and the typical investor will react to each in just the wrong way — selling low out of fear and buying high out of greed.

 

Unfortunately, many retirees have that 8% or 9% return in mind when they decide their withdrawal rate in retirement. If they only get 5% or 6%, they either have to adjust their budget accordingly — which takes discipline — or take on more risk. It’s better to project a more conservative number that works within your overall plan — maybe 4% or 5%. If you get higher returns, great — but if you don’t, you’re far less likely to run out of money.

 

Final take: 4 keys to retirement success

 

Retirement should be something you can look forward to with confidence, and winging it won’t give you that. Here are some keys to success:

 

  1. Take market risk seriously when it comes to investing retirement money.

 

  1. Don’t rule out any kind of financial product without having a true understanding of how it would fit into your plan.

 

  1. Take control of all your retirement dollars; make sure you’re not forgetting about anything.

 

  1. Seek help from a professional who can guide you. A retirement specialist can help you build a plan and will assist you as you make your way to and through this next stage of your financial life.
Source: lexusgroupblog.weebly.com/blog/5-big-retirement-money-mistakes-to-avoid
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text 2002-12-07 19:23
Want to retire wealthy? Start with your 'money personality'

Image result for Want to retire wealthy? Start with your 'money personality' FILED UNDERPERSONAL FINANCE AT OCT 2

 

For those seeking ways to build wealth (or just to get rich quick), there’s no shortage of advice out there.

 

Personal finance sites abound online, and self-styled radio talk show experts dispense wisdom with varying degrees of accuracy.

 

But one study found that your fundamental attitudes about money can be a predictor of your ability to accumulate wealth.

 

The study, published in the Journal of Financial Planning, looked at the correlation between certain behaviors and four “money scripts” — or, put another way, four money personalities.

 

And, spoiler alert: Only one of the four money scripts is particularly conducive to getting wealthy.

 

But Tom Murphy, a certified financial planner and CEO of Murphy and Sylvest, said the good news is, like anything, once you recognize that you look at money a certain way, you can take steps to change.

 

“Recognizing why you are doing what you’re doing is strongly correlated with changing it,” he said. “Lots of times, once people understand their money personality, how they deal with money, they can actually go in and change their behavior.”

 

Murphy said that money beliefs shaped by childhood trauma are, of course, much harder to overcome.

 

Nevertheless, parents who are conscious about the way they talk about money to their children — even in tough times — can help teach fundamental lessons about saving.

 

“Here’s how you teach the right lesson: When the child wants something, you tell them that’s fine, but they have to use their own money, and in two weeks, when it’s broken ... then they don’t have it anymore,” Murphy said. “Give the child the opportunity to make a bad decision.”

 

He gave similar advice about investing: If you manage small amounts of money as a kid, you have a better sense for how it works when you’re an adult.

 

“They either like it or they don’t — that’s a hugely valuable lesson to learn,” Murphy said. “And lots of people don’t learn that until their 20s or 30s.”

 

So which money personality do you have? Here’s how the four break down:

 

  1. Money avoidance: Money avoiders believe money is morally corrupting — that rich people are greedy and therefore they, themselves, don’t try to amass wealth when they get it.
  2. Money worship: Money worshippers believe that money will solve all their problems, and that their happiness and power is tied exclusively to having enough money.
  3. Money status: Those who follow the money-as-status script believe that their self-worth is equal only to their money. They tend to believe that it’s important to buy new things as a marker of status, rather than because they really need them.
  4. Money vigilance: People who are money-vigilant emphasize frugality and saving — and they’re also a little bit secretive about how much money they have.

 

You can probably guess which one tends to produce the most wealth over time: No. 4, or money vigilance.

 

But Murphy said lots of people hold a mix of these beliefs — and can exhibit combinations of unhealthy behaviors, like compulsive gambling or giving too much of your money away to charity. Even hoarding money and being unwilling to spend any can be emotionally detrimental.

 

Still, Murphy said that, above all, it’s important to pay attention.

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text 2002-11-27 17:00
Three Tips New Investors Must See

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When I first started investing, I had many questions. Fortunately, I had helpful and experienced investors around me who were able to guide me through my first steps as a stock market investor. However, others may not be so fortunate and may, as a result, be put off from investing due to fears of making a mistake.

 

Because of this, I thought I would answer three common questions that new investors might have.

 

How much should I invest in my first stock?

 

This may be the first question that many new investors might have. In reality, there is no simple answer to this question. It depends on a multitude of factors such as your risk appetite, portfolio size, and investment strategy.

 

Having said that, I believe that all investors should still follow a few rules of thumb before making a decision on this.

 

First, our investment size should be large enough such that the commission charges do not exceed 1%.

 

For instance, investors should try not to make a transaction below $1000 while using brokerages that charge a minimum of $10 per transaction. Overlooking the effects of these transaction fees could be detrimental to our overall portfolio returns.

 

Second, investors should diversify their portfolio adequately and each stock should ideally not exceed 10% of your entire portfolio. This is to ensure that any bad investments cannot overly affect your total portfolio returns.

 

Where can I get stock ideas?

 

Recently, I wrote an article on three good ways we can screen for stocks. Firstly, by screening for stocks those are undervalued or trading at low premiums. Investors can also take a top-down approach and seek out growing industries, before narrowing their options to specific companies within that industry.

 

Finally, and maybe the best option for new investors would be to use a stock recommendation service that provides monthly new stock picks for investors. It is important to choose a reasonably priced stock recommendation service that has a long history of beating the market.

 

Should I actively manage my own portfolio or use professionals?

 

Before deciding whether to manage your own portfolio, it is important that we understand our own investment capabilities.

 

Investing requires patience, good control of emotions, and an understanding of businesses and stocks. New investors who are looking for above average returns and have the confidence and knowledge on stocks should consider managing their own portfolio. This is because we can have better control over our finances and can avoid paying hefty management fees.

 

Unfortunately, there are also often numerous retail investors who over-estimate their capabilities or are prone to investing mistakes due to greed and fear. This has led to retail investors underperforming the index by a considerable amount.

 

For instance, between 1990-2000, the S&P 500 index returned 7.81% annually. On the contrary, retail investors averaged only 3.49%. If you fear that you are unable to make good investment decisions due to poor control of emotions, seeking a professional for help may be your best option.

 

The Foolish bottom line

 

New investors will unsurprisingly have many questions before they start investing. Hopefully, this article adds a little bit of insight for new investors who are just starting out on their investment journey.

Source: lexusgroup.greatwebsitebuilder.com/blog/three-tips-new-investors-must-see
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text 2002-11-10 20:29
Top seven tips for saving money and making your dollar work for YOU

 

Saving money and cutting costs is often as exciting as watching paint dry.

 

But finance guru and Sugar Mamma founder Canna Campbell has revealed her seven top tips to get you enthusiastic and confident about growing your bank account.

 

The Australian video blogger says getting yourself into a healthy routine with money is the best starting point for saving money and making every dollar count.

 

In her latest YouTube video, Canna shared seven simple ways you can cut costs and squeeze every penny so you can sit back and watch your savings flourish. 

 

  1. Have a Deadline

 

Canna says setting yourself a reasonable but clear deadline for your savings goal is the first step towards maximizing your money.

 

If you have a goal of saving $10,000 in five months, the finance expert recommends pinpointing a specific date on your calendar for your deadline - which instills a sense of urgency in your mind every time you see it.

 

'That way you feel feel a lot more accountable and realize that time is ticking for your end date,' Canna said in her video.

 

  1. Have a Budget

 

The second step in Canna's seven saving tips is to outline a tight budget for your spending money.

 

Setting a budget helps savers identify spending habits and provides a clear picture of what you really value.

 

Knowing what you are spending your money on every month is also a great way to realise what needs to be culled and what is necessary.

 

'Budgeting is a good way to show you problem areas and opportunities for saving money,' Canna adds.

 

  1. Make a Dedicated Savings Account

 

Without a dedicated savings account to watch your money grow, Canna warns it is difficult to stop yourself from recklessly spending.

 

Designating a specific account, preferably with a nickname which mentions your goal, is a surefire way to prompt yourself to keep accumulating cash.

 

Canna says a savings account gives your goal direction, flow and purpose.

 

'A feeling of progress fuels continued commitment and dedication. Try to make sure the account is low fee or no fee at all too,' she adds.

 

  1. Regularly Contribute

 

Creating a healthy routine and frequently depositing into your nest egg can excite you and encourages yourself to keep going because of how elated you feel as you watch it rise.

 

Creating a healthy routine and frequently depositing into your nest egg can excite you and encourages yourself to keep going because of how elated you feel as you watch it rise.

 

Canna also recommends putting aside every single extra dollar you may have leftover each month so your spending habits don't suffer.

 

'Every time you get a pay rise put the extra cash into your savings account so you aren't tempted to change your lifestyle,' she explains.

 

  1. Remove Temptation

 

It may sound like a no-brainer, but removing any and all temptation to spend money from your daily routine is also an essential habit for maximum saving.

 

If you are inclined to duck into the shops whenever there is a sale or peruse your favourite fashion website, Canna says avoid this like the plague.

 

Instead, she says you should direct your free time to activities which centre around your savings goal.

 

'So if you are saving for a property, spend your time perusing property sites or going to open homes,' Canna suggests.

 

  1. Review Progress Carefully

 

As your savings journey wears on Canna says it is good practice to review how you are tracking every so often.

 

It is a good idea to regularly check your account so you can feel a sense of elation or progress when you have a reasonable chunk of money.

 

Reviewing your progress can also give your ideas on what else you could be doing to bolster your savings or if there is any other saving opportunities.

 

'Little things really add up,' Canna says.

 

  1. Reward Yourself

 

Lastly, Canna recommends giving yourself rewards and pit-stops every so often on your savings journey.

 

'We're all human beings with normal emotions, so sometimes saving can be painfully slow or painfully boring,' she said.

 

'But other times it can be amazing or exhilarating to give yourself a sense of achievement.'

 

Taking the time to reward good behavior it important but Canna also advises not to take too long of a hiatus otherwise you may fall off the bandwagon completely.

 

'Break down your goals into bite-size, manageable pieces and you will watch your savings grow.'

Source: lexusgroup.over-blog.com/2002/11/top-seven-tips-for-saving-money-and-making-your-dollar-work-for-you.html
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