Christian – Staffin Loans

What are the Risks of Investing?

When you think of investing, you probably think about people that make a lot of money. We often hear about how the stock market can outperform savings account many time or how putting money into a home can give a really good return. However, it is a sensible idea to think about what the risks are before you go into it. These are perhaps something that we do not hear much about, but we need to think about them and make sure that we are aware of them before we make any investments.

You Could Lose Money

It is worth knowing that you could easily lose money when you invest. When you take out an investment you are buying an item and hoping that it will increase in value. Whether this is a house, a painting or a share of a company, there is always a risk that the value will go down. For most investments the value will fluctuate a fair bit in the short term but in the long term it will tend to go up. However, this will not be the case with everything and it is not always easy to tell what will go up and what will go down in value. There are often surprises and so you will have to be prepared to take a risk and hope that you are doing the right thing. This means that any money that you invest, you need to be prepared to lose. You need to use money that you know that if you lose it, you will still be able to manage in the future.

You May Have to Pay Costs

With many investments there will be costs involved which you hold them. With shares, for example you might have to pay an account manager or a company to hold your shares for you. If you buy a house, then you will have to insure it, pay tax and keep it maintained. If you buy a painting you may have to pay to have it stored, restores and cleaned or if you keep it at home you may need a burglar alarm and you will need insurance. It is therefore wise to make sure that you are aware of these costs so that you can allow for them when you are considering whether an investment will be the right idea for you.

You May Not be Able to Get Your Money Out

It could be the case that you buy an item as an investment and then you will not be able to sell it. This can happen with shares where sometimes a hold is put on shares to stop people selling them to try to keep the value high. With a house you may find that it is a time when houses are not selling or maybe the house is in an area where houses are not selling and so you find you just cannot sell. The same could happen with art as it might just be that the artist becomes unpopular for some reason or that style just goes out of fashion.

This is just a few of the risks that you are taking on when you make an investment. While there are advantages, or else so many would not be investing, you need to be aware of the risks as well. You need to decide whether you are prepared to take those risks. Try to imagine how you would feel if you could not get your money back or if the investment was costing you a lot of money and think about whether you feel that it would still be worth going ahead with them.

Budgeting

Will Budgeting Suit Me?

You may wonder whether using budgeting will actually suit you or not. There are lots of advantages to doing it and lots of reasons why it could be helpful in specific situations, but there are still people that may wonder whether it will be a good idea for them or not. It is a good idea to understand a bit more about how it works and that may then help you to decide whether it is something that you should consider doing.

What is Budgeting?

Budgeting is when we allocate money in certain areas and only spend a certain amount. It means that we will decide how much to spend on certain things in order to ensure that we do not spend too much. So, we might decide that we will spend a certain amount on essentials and a certain amount on non-essentials or allocate a certain amount to a certain more specific area such as groceries. The idea is that you set a realistic budget for each area and this will mean that you are then able to know that you will have enough money to spend on the things you have to buy and that you will have enough left for other things as well. There are different ways to budget.

How Does it Work?

There are different budgeting systems and it is good to look into them and choose one that you think will suit you or even come up with one of your own. The important thing is that you will need to find out how much money you need and how much you have and make sure that you are spending your money on the right things. It is a way of making sure that you have enough to pay for the things that you have to buy and do not have to borrow money due to a lack of control over your money.

If you wonder whether it will suit you then the answer is always yes. This is because you can change the way that you do it so that it suits you. There are some people that have different bank accounts and put chunks of money in those accounts and use that money to pay different things. Others keep it all in the one account but pay off all their bills at the start of the month so they know that what they have left, they will be able to send. There are different ways to approach it and it means that you will be able to sort something out that you think will work for you. You may have ways of managing your money already, perhaps they just need tweaking a bit or they need a complete overhaul. You might want to stick with certain things and so it will be a case of you choosing a method that will work together with that that. You may feel that it will be too time consuming or difficult, but once you have decided what you want to do and got a plan, then there should not be a lot of work. You will of course, need to stick to it, but hopefully you will be able to come up with an idea that will work well for you and that you will be able to stick to easily. It can make managing your money so much easier as you will know how much you will need for different things and how much you can spend on treats for yourself. It can give you a sense of freedom as you will no longer feel like money is restricting you or stressful because you will always make sure that you have enough for the important things and that will mean that you will not need to worry so much about being able to afford those things that you need.

Budgeting

Is Budgeting Better than Borrowing?

There are lots of different approaches to managing money and it is not always easy to know what will be the right approach for you. It is good to think about the different options though as it can be really important to make sure that you get it all right. It can make a big difference with regards to the cost as well as with regards to the stress that you might feel too. Therefore, it is good to explore the different possibilities and options that you have to make sure that you are doing things in a way that suits you really well.

Advantages of Budgeting and Saving

If you save up for something, then you will not have to pay the costs of a loan. You will always have to pay if you borrow money and this means that the items that you are buying will be more expensive as you will need to add on the cost of the loan to it. This means that if you wait a while you will find that it could be worth it financially. However, it is also a good idea to think about other advantages as well. This means things like the fact that you will have to time to think about the purchase and decide whether it is a good idea. While you are saving up you might change your mind. You may see something better or better still something that offers better value for money or you might just decide that you can do without the item altogether. You might learn some useful budgeting techniques that you will be able to use in the future to help you when you need to buy expensive things again or if you want to have more money available to put in your savings account or to pay off a loan. You may even identify ways that you can spend less or earn more that you are happy to do all of the time and it will mean that you will free up money that you can use for all sorts of things, perhaps even treating yourself.

Advantages of Borrowing

If you borrow the money then you will be able to have the item right away. This means no hanging around and waiting. It means that you can start enjoying it or getting the benefit of it right away. Sometimes, it might be that you need the money in an emergency. You need to get it quickly as you cannot wait. It could be that you have had an unexpected bill arrive or that you need to replace a broken white good or need an emergency house repair. If it is something like this, then saving up will not really be an option. Some people may also find it very hard to save up money. So even if they could wait to purchase the item, this is not a realistic approach for them as they will just spend the money rather than save it up and therefore just not be able to achieve their goal.

Which to Pick

It makes financial sense to save up rather than borrow. It will be cheaper even though you will lose interest if you use savings to buy things, this will still be a cheaper option than paying for a loan. You might also be able to make a bit of interest on the money while you are saving it up anyway. However, if you are in a hurry for the money, then borrowing might just be a much better option for you. It will very much depend on what you need the money for. You will also need to think about whether saving up will be something that will work for you or whether you will feel that you will not have the self discipline to do it.

Banking

Is a Bank’s Reputation Important?

There are quite a few people that will think hard about the reputation of a bank when the are trying to decide whether they should use them. However, some people are not really that worried about it and will just look at the products that they are offering and use those as a way to decide which bank to go for. You may wonder whether it is a good idea to use a bank which has a good reputation or whether this is something that is important or not.

What is a Good Reputation?
It is a good idea to think about what you feel a good reputation is. There are different things that different people might think means that someone has a good reputation and therefore you need to think about what your ideas are.

Well-known – there are some people that think that if a bank is well-known that that means that they will have a good reputation. They have the idea that a company ill want to make sure that they treat their customers well and provide a good service because they are well-known and will want people to think highly of them. However, this is not always the case because just because a bank is well-known, it does not mean that they have a good reputation. In fact, they might be able to get away with poor customer service as they will be able to gain customers just because they have a well-known name and so they can get away with not provide such a good service as a result of this.
Reviews – some people might think that if a bank has a lot of good reviews then it means that they are going to be really good. Obviously, this does seem to make a lot of sense as we are likely to feel that a good review is something that we should take notice of. However, there is the possibility that it might not be what it seems. There are fake reviews and it is getting more common for companies to either pay people to leave good reviews or get employees to do it. There is also the opposite possibility where companies may trash their rivals or people might troll a company and leave them bad reviews without good reason. It is therefore a good idea to make sure that if you are looking for reviews that they are form a trusted website or company and perhaps that you do not rely on them too much for information and guidance.
Recommendations – personal recommendations can be a much better way to judge. This is because you actually know the person and you will know whether they are likely to be biased or not. It is most likely that they will have your best interests at heart and will want you to benefit form the help that they are giving you. If course, your personal contacts will be limited and so you will may not be able to gather lots of information using this method but you could still get quite a bit.
Used before – if you have used a bank before then this will provide you with really useful information. You will know whether they were good or whether you think that it would be better to go elsewhere.

Is it Important?
It is also well worth thinking about whether this is a really important factor. Consider what other things you could be thinking about. Things such as how much they charge, how easy they are to use and how good their customer service, could be factors that perhaps you should consider more.

Payday Loans

Are Payday Loans my Only Choice in an Emergency?

If we need money in an emergency, it can be easy to panic and not really know where to turn. It may be that most people will only have the option of borrowing and they may think that payday loans will be their only option. While they will be an option available to most people. There could be other borrowing options and possible other different options available too and it is a good idea to think about as many options as possible before making up your mind completely.

Payday Loans

A payday loan is a way that you can get money quickly. They can sometimes be arranged in a s little as few hours and most people will be accepted for one when they apply. However, you can only borrow up to £1,000 which may not be enough, depending on how much money you need and some lenders will provide even less money, so you will need to check. You will only be allowed to keep the money until you are next paid and then you will have to repay it all with interest. This can suit people in an emergency as they may only need money to keep them going until they are next paid but it will depend on whether the borrower will be able to afford to repay it that quickly.

Overdraft

If you have an overdraft facility then it can be a great way to get some money when you need it quickly. It is something that will be there for when you need it and then you can use it by just drawing out cash or transferring money to where you need it. Repaying is simple as any money paid into the account will just automatically repay it and interest will be charged until it is repaid. It can be very useful but not everyone will have access to one or some people may have already used them.

Credit Card

A credit card will allow you to buy things and delay paying for them. You can either pay for them when you get statement or you can choose to wait and delay paying for them but pay interest until it is paid off. This can be convenient if you need to buy items and from a place that accepts credit cards. However, you could find that you need cash and a credit card could also help you with that as they can be used to draw cash out of the bank. However, you will need to be careful because if you use a credit card to draw cash, you will be charged interest on it right away. Not everyone will have a credit card either and there is a credit limit on them, so it might be the case that there is no more money available on it to use.

Other Options

It is well worth considering other options as well as borrowing. This is because they might be cheaper and easier. If you have savings, then using them could be a great option. It can be hard to part with savings, but they can be very useful and it is always worthwhile thinking about whether using them will be something that will be advantageous to you. You may also be able to raise some money by selling things that you own and no longer need. You might be able to find some other ways to earn some extra money as well which might provide you with the money that you need in time. You may also find that you will be able to spend less in other areas which might help you get the money that you need.

ALL POSTS BY: Christian