Working out a budget is important. It is easy to see how so many people have found themselves deep in debt and unable to climb out as paying for items on credit always catches up, particularly when you consider the interest rates that are being paid. The only way to avoid this type of hardship is to ensure that you avoid credit where you can, budgeting an amount for items you want or need to have.
The key to an effective budget is working out a realistic budget. A spread sheet that shows income in and bills and food out is not going to work for very long. Within your budget you need to account for things like birthdays, holidays and entertainment. Clothing and footwear needs to be included as does money put aside for emergencies. When setting yourself a long term budget you need to look realistically at what you do spend and what you need to spend or put away each month. For example, putting away a monthly payment towards the next car tax disc so that when the bill comes in you have funds ready to cover them is much more organised than having to pay on a credit card as you don’t have an extra couple of hundred pounds spare in your wages (chances in Car Tax mean that motorist will soon be able to opt for a monthly direct debit to pay for their car / road tax).
Cutting your excess spending is the first step to reducing your outgoings and putting together a budget that is easier to stick to. Consider for example whether you need Sky with all of the extras. Reducing your packages for entertainment for example doesn’t mean stopping them altogether but cuts the cost and an extra £20 a month might be used for the MOT bill or Christmas budget.
Keeping an eye on your finances is an important part of living within a budget. Using a spending diary or keeping an eye on spending via online banking will help you to ensure that you are not overspending. Similarly, try and use cash more when out and about. It is a lot harder to hand over a crisp £10 note from the cashpoint for a frivolous magazine and takeaway coffee than it is to simply enter your chip and pin code and use “unseen” money. Using cash helps you to keep an eye on what you spend and similarly discourages unnecessary spending.
Cutting the cost of all of your purchases will help you to keep within budget and still enjoy the food, entertainment items and more. Shopping online for many items does work out significantly cheaper, especially as you are able to compare prices and deals with ease. When shopping online you have to again think twice about the amount you are paying as you fill in all of your delivery and cash card details and this is not necessarily a bad thing. For those must-have or really-want items search reputable sites for discount codes and free delivery offers to again shave pounds off.
It really is easier than you think to get a handle on your personal finances, cutting your outgoings and living within your means if you do a small amount of planning and assess and alter your spending habits.
Recently we’ve been looking at our finances with a different eye. We’ve been pondering pensions (being self-employed I need to sort this out!), savings and even investments. Finding your way through all of the information out there is like play hop-scotch in a minefield and so we’ve decided that at some point we will be looking at getting professional help to advise us.
A while ago I was asked to work on a project all about classic cars and how they make a great choice for investments. I absolutely LOVED the idea, especially when reading through my research at the return rates and besides, how sexy are classic cars??!
Up here in North Yorkshire we have access to some amazing events which feature classic cars and regularly see collectors and enthusiasts travelling through the town (my oldest used to shout “It’s BRUM!”) regularly. I’m not much of an expert when it comes to classic cars however I am more definitely a fan.
For those who are interested, I’ll share some of what I found when looking at classic cars as a possible investment option.
Basically, experts are telling us that the when investing your money in classic cars that you are pretty much guaranteed a good return. “Pretty much” is the best anyone may offer you these days as of course with any investment there is an element of risk. That said, over the past ten years or so the value of some classic cars has risen as much as 400%. That is a return hard to beat. Generally speaking fine wine, jewellery, watches and the other more common investment pieces are known to give a return of anywhere between 78% and 216% , impressive but £400 AND the opportunity to have your own classic car to stroke?
One case study I came across about investing in classic cars was about TV presenter / radio presenter Chris Evans. He bought in 2010 a Ferrari 250 GTO for (it was reported) ELEVEN POINT FIVE MILLION. Anyone would think spending that on a single car was insane to say the least until he sold in on two years later and netted an impressive £6.5million profit.
You don’t have to have millions of course to invest in classic cars as some models start out rather reasonably. Some people have a number of cars, polished daily and put away so as to protect their money as best they can, while others organise specialist classic car insurance and enjoy their investment piece. We’d probably be the latter and knowing our luck scratch or dent the car to the extent that we’d lose out however the option is there and down the road we’ll definitely consider it.
Fact and figures aside what would you love to invest in? Google seems a safe bet, classic cars a very good bet even; what about something quirkier? Let me know (I’m nosy!).
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