Archives for February 2017

The Ultimate List of Budgeting Tips to Reduce Debt

The increase in consumer debt over the past few years, mainly since the recession is staggering. More and more people are finding themselves in a situation where they are battling to cope with their rising debt, with some feeling as though it’s a mountain they just cannot get to the top of, no matter how hard they try which as a result has led to more people within the UK having to use an IVA (Individual Voluntary Arrangement) or Trust Deed to help manage their debts.

Saving monthly, paying the minimum repayment on credit cards and cutting back on things such as travel or eating out – following the guidelines which are published in many magazines and blogs. Feeling like you’re doing the right thing but it just doesn’t seem to be making a difference.

This is why many people are turning to IVAs and Trust Deeds. These can help those individuals and families who are struggling with mounting debt to cope. In the case of an IVA or individual voluntary agreement, creditors will come to an agreement in which the consumer pays all or some of their debts over a period of time.

It’s favourable to bankruptcy as it allows more control over assets. A Trust Deed is also an arrangement where all of a debtor’s assets are transferred to a trustee to manage and pay back the creditors. This will also include paying a regular portion of their income to the trustee to allocate to creditors.

Before choosing to enter into either of these agreements however, try to reduce debt yourself. It IS possible.

Below is the ULTIMATE list of budgeting tips to reduce debt, and following as many of these as possible, will help you to get a lot closer to the top of the proverbial mountain than you have ever been…

Spend less than you earn

This may seem obvious, but many people rely on credit cards to live a lifestyle that costs more than what they earn. Create a realistic budget and stick to it.

Cut up your credit cards

Do this so that you are not tempted to go over your monthly budget.

Pay off credit cards with the highest interest first

Check APR on each card and pay them off from the highest to the lowest.

Implement a weekly meal plan

By planning your meals for both lunches (at work, school or home) and dinners, you will know exactly what to buy. Anything that doesn’t got into one of the recipes, doesn’t need to go into the trolley.

Take your lunch to work

Taking your lunch with you to work can save a substantial amount over time. The same applies to morning coffees.

Look to change your home and car insurances

Insurance companies usually rely on the fact that people will not cancel the automatic renewal each year, but often their prices don’t remain competitive. Use a price comparison website and don’t be afraid to change insurer.

Don’t buy new clothes

There will be times where kids grow out of their clothes and buying new clothing is unavoidable, but the adults most certainly don’t need anything new until after the debt has been paid off.

Downgrade your mobile phone and TV package

It’s an essential part of reducing debt, whether we like it or not. We don’t need the mobile phone package with unlimited minutes or huge amount of data, nor do we need the best TV package with access to the latest box sets. While you are paying off debt, downgrade to the basics.

Track your expenses

Writing down everything you spend or using an app to track can help you to spend less because you are constantly aware of the running total. Put a stop to any monthly subscriptions such as Netflix and Audible. All the small amounts do add up over time.

Put any extra cash towards your debt

Any additional money from overtime or part-time work as well as unexpected cash in the form of a gift or someone paying for you when you had planned to pay yourself, should immediately go to pay off your debts.

Cut back on entertainment

This will only be a temporary measure but will go a long way to decreasing your debts.

Pay a little more than the minimum repayment

Even if it is only £5 extra, always pay something more than the minimum which will bring down the interest you will pay over the course of the debt.

Try implementing just one of each of the above tips per week and within three months you will have built up numerous healthy habits towards reducing your debt.

CFD Trading; A Simple Guide

By Frugaling Leave a Comment

CFD trading has recently become a way to make a bit of extra money from the comfort of your own home, with some reduced risk when compared to standard trading on the stock market. CFD stands for “Contract for Difference” and it is based on the agreement between the two parties involved to settle at the end of a disclosed period, with the difference being the price at the start and the end of the contract, which is the traders profit.

The difference in the price at the start at the end is multiplied by the amount of shares that was agreed upon during the start of the trade and this is then the profit made by the trader. The process is very similar to ordinary share trading, in that they are purchased the same way and in the same amounts, even with the same prices, however, there are a few very clear and very distinct differences with ordinary share trading that are to be explored in the remainder of the article, with some tips and tricks in how to get the most out of a CFD trade and the protocol to think about when entering into one.

The first and foremost thing to consider, is that a CFD trade is operated in terms of margins. This means that the trader can maximise their capital and can often mean less capital is needed to get a good return than could be the case for ordinary share trading. Another point to make is that there is no stamp duty that needs to be paid for a CFD trade and this means a saving of 0.5% over a traditional share trade purchase. The flexibility in terms of short or long term trading can mean a profit can be made from both rising or falling stock and a greater range of financial markets is available to the trader when opening just one account of their own.

The magnified profits made also work the other way round for a CFD trade, so the losses made will also be magnified and you could find yourself losing large amounts of money quickly, as a result. It is therefore important to track each trade and put in place a stop loss in order to cut your losses. The main aspect is you do not have any rights as an investor and in fact, the commission charged on a trade means that they are more suited for short term investments because the longer the trade goes on, the more the costs increase.

There are many things to consider before entering into a trade and these include analysing risk, the trading system and the psychology of the trader. A useful graphic is provided to show the most important factors in becoming successful in CFD trading:

It can be seen that it is the trading psychology that is most important and it is good to get yourself into the right frame of mind before making a trade. It is always important to apply logic to every situation, operate like a robot, rather than a human and have a rigid structure that you will stick to when trading.

In addition, it is important to closely track your losses and profits. Cashing out too early on a profiting trade can be a big mistake, but perhaps the largest mistake is clinging on to a falling trade, in the hope it will start to rise again, it is always best to cut your losses whilst you still can, without draining your account so you can live to trade another day. A definite thing to do is to never dd to losing trades, this may sound simple, but, it is worth mentioning as some people have done this in the past, using a trend line to monitor the trade is a much better way to avoid making this mistake.

There are currently many platforms that are available in which CFD trading can be used to make some money online from the comfort of your own home. These sites include CMC markets, amongst some others that give the trader an easy way to start trading straight away, with welcome offers even being available from time to time.

Why you should get started with investing

By Frugaling Leave a Comment

Investing has never been easier. You don’t need to be wealthy and you don’t need to have any prior experience. There are more options and more choices than at any other point in time. So just how should you start investing?

Build Up that Starting Capital

You need to begin with some starting capital. These days you get started with just a few hundreds. Try to save up as much as you can through building up a savings plan. Start a savings account and wait until you have at least a little extra money on top of an emergency fund. You don’t want to invest it all, get a market low, and exit at a loss.

Find a Brokerage Account

A brokerage account is your main source for buying everything from shares to bonds to funds. Many brokers require you to have thousands of dollars to get started with. But these days, there are brokers specially geared towards those with low starting capital.

They’re different because they don’t offer expensive financial managers or high management fees. Be aware that you’ll have minimal help along the way, however.

Go here to compare the best online brokerage accounts and find the one that best suits your needs.

Know What You Want to Invest In

One of the biggest mistakes people make is to pick a random company or fund and invest in it. This is a sure-fire way of losing your money. You need to educate yourself as to what a company does and what’s likely to influence the value of their shares.

You can do this through the company’s financial information. You don’t need to be an expert in how they do things, just what their financial health looks like. All this information can be found online for free. Don’t fall for the people who demand lots of money for detailed reports.

When you first get started with investing, you should opt for low-risk investments such as index funds through a robo-advisor. Here is a review of Motif Investing where you can get a $150 bonus to sign up.

Use Dividends to Up Your Returns

Remember that investing is a long-term endeavor. When you make your investments, you should think about the impact of dividends. If you have 50 shares in a company and they deliver a dividend of $1 every year that means you can expect to get $50 for doing absolutely nothing. And this is on top of the increasing value of your shares.

The best way to handle dividends is to instruct your broker to automatically reinvest that money. Your returns will increase every single year if you do that.

Don’t Invest Money You Can’t Lose

It’s always nice to be positive about investing, but the reality is you can lose money from it. That’s why first-time investors should stick to low-risk investments. For example, you should invest in an established company and not in that hot new startup . Yes, the returns are lower, but you’re likely to get back at least what you put in.

Have a look at long-term performance when determining whether an investment is a worthy one.

Go Now!

The true value of investing is in compounding. For compounding to work effectively you need to get started early. The longer you procrastinate, the more time it’s going to take to reach your target figure. Those who start investing in their 20s can make millions through low-risk investments, but someone starting with the same strategy in their 50s will barely earn enough to cover a few years worth of expenses.

It’s Easier Than You Think

The message to take away from this guide is that investing is easier than you think. You don’t need a lot of money, a lot of time, or a lot of expertise. Some basic research is all that’s needed to start making your initial investments and securing you and your family’s future.

Are you ready to make the investment in your financial future?