Author: Jasmine

I get lots of pleasure from writing, it is something that I have always enjoyed. I especially enjoy it if I am writing about a topic which I know is important. This is how I feel about finance as I know it is something which impacts everyone. I know that there are many people that struggle with managing their finances and therefore hope that the articles that I write will be able to help some of them. With very little teaching in schools about finance, we have to teach ourselves and hopefully with articles like mine this will be easier for a lot of people to do.
Online Banking

Is Online Banking Best?

There are many people that use online banking and even banks that only run online. However, there are some people that do not like the idea of online banking at all and so would rather not do it or have anything to do with it. It is good to consider the pros and cons of online banking though to make sure that however you are banking, it is working well for you.

Cost

When you are banking cost is something which should always be on your mind. You will find that banks differ a lot. Costs that you should be looking out for are things like interest on credit cards and overdrafts. You might also use them for other loans which you will find will differ in the costs as well. Even a small difference in interest can make quite a considerable difference to you over time. It is also wise to think about the interest they offer on savings accounts. This is because this can differ quite a lot as well and you are planning on using their savings accounts, then this could have quite an impact on you as you will probably want to take of advantage of the fact that you will be paid interest and so will want as much as you can get.

Flexibility

With online banking you have a lot more flexibility. You can check your balance and make transfers at any time; it does not have to be within banking hours. You can also do this in any location, you do not need to be at a bank branch or an ATM in order to do it. This will enable you to be able to keep better control of your finances. Being able to check if you have money available before you buy things, while you are in the shop or at home before making an online purchase will make a big difference for you.

Security

Some people worry a lot about the security of online banking. It is true that there are fraudsters out there who will try to scam you. However, there are things that you can do which will help to protect your online banking identity. Ensure that you have a good firewall on your computer. Make sure that you have really strong passwords and do not tell anyone what they are. Only log in to a site when you are totally sure that it is your bank – type in the URL directly rather than using a search engine or link in an email. If you are suspicious then always contact your bank to check.

Whether you will enjoy using online banking and find it best for you will depend on what you are looking for in your bank. You will need to think about the advantages of online banking and whether that will make you want to have a go. If you already have telephone banking then you will often be able to use the same details for online banking. It can be very convenient and will mean that you will be able to look at your banking details all of the time. It can also be helpful if you do not have a local branch. Many local branches are closing down and so you may not easily be able to deal with your banking needs without having online access. You could use the telephone, but this may mean waiting in a queue before you can speak to someone and so going online could be better as you are likely to be able to get through much more easily.

Banking

Should I Always Use a Bank I Have Heard of?

There are a lot of people that get nervous of using companies that they have not heard of. This can be for everything from shopping to banking. It is wise though, to think about whether this is a good attitude to have. There are good reasons that you might want to avoid banks you have never heard of but also good reasons why you should use them.

Why I Should use a Bank I Know

If you have heard of a bank then you will probably feel like they can be trusted more. It is likely that you will think that you will want to use one that is well-known because they are more likely to provide a good service. Many people think that a well-known bank will have to provide a good service because they have reputation to uphold. They feel that they will be worried about getting a bad reputation if they do not provide a good service and competitive rates. If you have used a bank before or know someone that has and you had a good experience, then it is very likely that you will feel more positive about using them. Of course, this is important as you want to be able to feel that you can trust the bank that you are using. You want to be sure that not only, they will look after your money, but also that they will help you if you have any problems.

Why I Should Use a Bank I do not Know

It takes confidence to use a bank that you do not know. However, a lot of people do it as new banks do manage to become more well-known. There are reasons that it could be worth using them. Firstly, they will rely on their reputation to get customers. This means that they will need to offer a good service so that they can thrive and get recommendations. If they have a poor review then that could make a huge difference to them, compared with a well-known bank that will be able to easily shrug off a poor review and it will not make a significant difference to them. If you find that the bank has a good deal or an account which really suits your needs then it could be really worth using them so that you can get exactly what you want.

As you can see there are pros and cons on both sides and so it is a good idea to have a think through it all. Each of us has different financial needs and it will be up to you to think about what will suit you the best. It could be that you would be happier putting savings into a bank you trust so you know they will be secure but happy to borrow from a less well-known bank so that you can get a better rate and will not perhaps worry so much about if things are secure. It can be wise to read reviews, have a close look at the website of the bank and get in touch with them and ask them a few questions to see how they respond. Even if you are using a well-known bank then it is a good idea to check these things out. You never know what you might find out and think. If you have not used them before it is always wise to do some investigating yourself to find out what you think as reviews are useful but you have your own requirements and need to see if they will fit them.

Debt

Is Getting into Debt Always Bad?

There are some people that always avoid debt and feel like all debt is really bad. However, you may question whether they are correct and it is something that it could be well worth thinking about. There are lots of things that people borrow money for and are they all bad?

Houses

So many people would not be able to own their own home if it was not for the fact that they can use a mortgage to purchase it. Owning your home has a lot of advantages over renting. Once you have repaid the mortgage you will not need to pay anything in the form of rent once the mortgage is fully repaid. This will mean that it is much easier to afford things then and you will not have to worry about these costs when you have retired and have a lower income. Owning your own home will also mean that you will be able to have more flexibility with regards to work that you have done on the house compared to renting.

Education

Most undergraduates would not be afford their degrees if it was not for student loans. There are also other types of loans that can be used for different types of courses as well. Doing a course will normally lead to us being able to get a better job which will lead to more pay.

Cars

Cars can be very useful for us and many of us will use our car to get to work. Without a car we may not be able to do the job that we do or we might have to use public transport which might be more expensive or take us longer to get to work. We may even need to use our car as part of our job and so having one could be essential. If we cannot afford to buy one then getting a loan from somewhere like Cobra Payday Loans could be really essential.

Emergencies

Sometimes we have emergencies that we cannot afford to pay for. For example, if our fridge stops working and we need to buy a new one, then we might need to get a loan to pay for it. This would be a good use of a loan because otherwise we would not be able to keep our food fresh which would not only be inconvenient but might mean that we will have to eat a very restricted diet until we could afford to replace it.

Luxuries

There are some people that use loans to buy luxuries. Luxuries are items that we can do without and it is not a good idea to use a loan to buy them. This is because we pay money for a loan and therefore, we effectively make anything that we buy with a loan more expensive if we purchase it this way. If we can wait for an item, which we can with a luxury, then it is much better to delay the purchase until we can afford to buy it without a loan. Perhaps this could mean saving up for a while but it will be cheaper to do things this way. So, you can see that there are some reasons for getting loans which are not as good as others. It is therefore important to make sure that you think about what you are going to be using the loan for and then you will be able to judge whether the debt is bad or good. It is not always really straightforward to make this decision, but you should be able to think through whether the item you are buying is something you need right away or not and whether it will have a positive impact on your finances.

Mortgages

How much of a Mortgage Deposit do I Need?

When you start saving for a mortgage deposit it can be tricky working out how much you will need. There are a number of things that you need to consider.

How Much Can I Borrow?

A mortgage provider will tend to have a formula that they use to calculate how much you will be able to borrow from them. It tends to be based on the salaries of the people taking out the mortgage. This will enable you to know what sort of house price you are aiming for which will help you to start thinking about how much you will need to save up.

What Percentages to Lenders Want me to Provide?

The next step is to find out how much lenders will want you to provide. Normally they will want a percentage of the house value and as you know how much you can borrow, you will be able to work out how much you can afford with regards to buying a home and this will help you to be able to work out how much you will need to save up,

How Much is the House I Want to Buy?

The last part of the equation is how much the house will be that you wish to buy. When we first start saving for a deposit, it is unlikely that we will be house hunting as we will need a while to get the money together and the houses we like will probably be sold by the time we do. However, it can be a good idea to start looking at houses selling in the area that you are interested in and it will give you an idea of how much they will cost. If they are too expensive for you to afford with the mortgage that you can get, then you will need to pay a bigger chunk of deposit in order to afford it. Of course, this will mean that you will have to wait longer to save up and you will have to decide whether this is something that you are prepared to do.

There are other advantages in saving up a larger deposit too. Even if you do not need a huge one for the type of home that you want, it can be wise to think about saving more anyway so that you can borrow less. This will enable you to reduce the amount of money you pay for the mortgage. You will pay less interest because you will not owe so much and the interest is calculated base don how much you borrow. You will also potentially be able to repay the mortgage more quickly because you are borrowing less or have lower repayments to make each month.

Therefore, there is not an easy answer to how much you should save up for your mortgage deposit. However, probably the more the better would be a good place to start. You will be able to calculate roughly what the minimum you need to save is but you could find that you will benefit a lot if you can put more towards paying for the house than the minimum. One problem is though, that house prices tend to rise all of the time and this means that you could find that even though you are saving more over time, the price of the house is rising as well, so you are not gaining anything. Therefore you need to find a way of making sure that the amount you are saving is going to be more than the amount that house prices are increasing.

Mortgages

How Can I Save for a Mortgage Deposit?

When you want to buy a home for the first time, you will normally eb expected to save for a deposit if you want to borrow the money to buy the house with a mortgage. There are two reasons for this – the lender will want to see that you are capable of saving as that will give them faith that you will repay the mortgage but it will also mean that they do not have to buy all of the house and so if you miss repayments and they sell it, it is more likely that they will get back enough money to cover their share even if house prices have gone down or if their selling costs are very high. The amount that you need to put together will normally be a percentage of the cost of the house and that will be determined by the lender. Therefore, you will need to find out what this will be and then you will know what to aim for with your saving. But how can you save?

Set up an Account

The first step is to set up an account where you will put the money that you are saving up. It is a good idea to search around a bit to try to find an account that offers a good interest rate. This is because you will find that you will gain interest this way and you will not even have to do anything yourself! Even if interest rates are really low, finding one that is a bit higher can make a difference, particularly as your savings grow.

Pay in Regularly

Once you have your account you need to start paying in regularly. The best thing to do is to set up an automatic transfer that will put some money into the savings account when you get paid. Doing it at this time means that you will know that the money will be available to pay in. However, it is a good idea to think about how much you should pay in. If you have an instant access savings account, then it could be a good idea to make this figure on the large side as you can always withdraw money if you need extra, but if it is not in your bank account to spend, the you will not be tempted to spend it. If you have a cheaper month and have money left at the end of the month put that money in as well. It can also be good to see if you can think of some ways to get more money available to put into the savings account so that you can reach your target more quickly.

Cut Back on Spending

One way to have more money available to save is to spend less. This can be achieved in two ways. You can compare prices on everything you buy and then switch to buying cheaper items. You can also cut down in the amount of things that you are buying and that will enable you to have more money. You could choose to do just one of these, but both will have more impact. You could make huge changes right away or make changes slowly so that it is easier. It will really depend on how quickly you want to have the deposit ready.

Look for Ways to Earn More

It can also be handy to look for ways to earn a bit more. So, anything from doing more hours at work, taking on a second job, monetising your hobby or selling things you no longer need, there are lots of options you could consider which could help you to get the money more quickly.

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