Tuesday, February 28, 2017
Everyone struggles with money from time to time (...to time again), unless you have inherited 40 million from your dad’s company (if only) or sold your soul to the Devil (I’ve considered it). In reality, most of us needs a bit of help. So Auto Advance Loan Company have a few pointers about how and why you should budget, that will hopefully make your life that little bit easier.
1. You won’t run out of food by the end of the month. There is nothing worse than having to quite literally scrape the barrel to find food when your money has all but evaporated into the ether. Therefore it is important to stay on top of your cash by planning out how much you need each week till your next payday. Work out each bill due for the month, add it all up and divide what is left for eating. That way, all your bills are paid and you won’t be playing catch up next month, and you won’t be eating stale cereal for tea. If all else fails, selling some old junk like dvds and games can help take a little pressure off, or you could get a payday loan just to tide you over if you’re in a desperate situation.
2. Saving what you have left over at the end of each month is great; if you can do it, do it. It means you’ll be covered for any emergency, eg car repairs or for things like birthdays and other holidays that demand you hand over your dollar. Giving up expensive luxuries is a good way to start trying to save. When you do your shopping don’t go for the priciest options but rather shop around. You may find it's more beneficial to go to three different shops as opposed to buying everything from one. You might find your shopping bill is halved by doing it this way and it's worth the inconvenience at the end of the day. Later down the line, your savings will improve and they won't be there just to cover the cost of your MOT or next Christmas, eventually they will be substantial enough to go towards owning your own house or going on a steam holiday. No time like the present to start saving.
3. Look to the future, because different months are going to demand different things, speaking from experience, there's always something. Think about the different rooms in the house, what can go wrong in those rooms, how likely will something need repaired, how essential is it, and what would it cost? You may find a period where you have nothing extra to pay for, everything is in good working order and it's nobody's impending birthday, so you have a bit of extra cash. You're going to want to spend it and there's nothing stopping you from enjoying yourself. Just take a moment before clicking Proceed to Checkout and see if you could put some of that money away for a rainy day, or to use as emergency money for when your washing machine conks out.
Monday, February 27, 2017
Well done – you finally did it! After months, or even years, of funneling your income towards that lingering cloud of debt, you’ve made your last payment and will never have to worry about that particular payment again. Now that you’ve shrugged off this burden, it can be hard to know what you should do next with your money. Here are some good next steps to consider…
Okay, a tendency to spend on some of life’s luxuries could have been what got you into debt in the first place. However, if you’ve been shackled to this debt for a long time, and it’s been dictating every little purchase you’ve wanted to make, use this relief to reward yourself for all your self-discipline. A special meal out, a luxury purchase you’ve been putting off, or even a little getaway could all be in order depending on the kind of debt you’ve managed to rub out. Just exercise a little moderation, and don’t start the process of racking up debt all over again!
Re-prioritize your Goals
After you’ve had this celebratory spending spree and come back feeling refreshed, your next important step is to prioritize your remaining financial goals. It’s pretty common for people to pay off a debt that’s been hanging over their heads for some time, and then relax the financial part of their brains, figuring that they don’t have much else they need to be worrying about. However, when you’ve managed to free up some of your personal cash flow, you’re presented with a great opportunity to start planning for your next big goal. Whether you want to use up spare cash investing at a binary options broker or simply move onto dealing with the next big debt, don’t lose your sense of structure!
Bolster Your Emergency Fund
If paying off your debt has caused you to dip into your emergency savings, then re-building this should take priority over any of your other financial goals. After all, the next time a big, unexpected expense gets dropped on your head, you don’t want to be left with no resources to tackle it! If you’ve totally depleted your emergency fund, then start it up again with a nice big contribution; around half of what it was before you used it to pay off your debt. Then, aim to contribute around a half of this every month until your emergency cash cushion is looking healthy again.
Start a Savings Plan
If you’ve spent a fair length of time paying off this debt, there’s probably going to be at least one big purchase that you’ve been putting off thanks to the financial burden. Now that you’ve been able to free up some of your money, you should set out a savings plan for the next big purchase you’ve been putting off. Whether it’s a new car, a trip of a lifetime or a big home renovation, set yourself a rough budget and then give yourself a marker for making monthly contributions towards it. This is one more thing that will give your personal finances a firm sense of structure.
Sunday, February 26, 2017
Unfortunately, not all countries offer universal health care to their citizens. That mean that it is often down to the people themselves to find the finances for their own medical problems and procedures. This can be a huge stress on top of an already difficult time. So it can help to know just what your options are in this sort of situation. Read on to find out more.
The number one way of making sure that you and your family are provided for when they get sick is to insure everybody. This means paying a premium every month that will cover a certain amount of treatments, consultations, and tests.
However, before you enter into a medical insurance contract, you should do two things. The first is to shop around for the best deal. Remember you are looking for a policy that includes cover for the most items, or the one that you are most concerned, about at the lowest price.
The second is that you should make sure that your medical insurance is good for the state in which you live. You also need to do this when you move states as well. It is common for folks to be caught out in some states, as they charge separately for the medical team and the anesthetist. So be careful of this.
Then, there's always the option of going to a free clinic to get some help with a medical issue. But that will only work if you can find one, as they tend to be as rare as hen's teeth.
It is also worth bearing in mind that they may be able to help treat less serious conditions that don't need a lot of follow-ups or palliative care. But for serious and chronic issues, they often don't have the resources to be that helpful. So trusting in this service alone could be putting your life expectancy in danger.
Another way of finding the funds for medical treatment is to recruit the services of a personal injury lawyer. Of course, this is only appropriate in some situation. Such as when you have been involved in an auto accident or an incident at work that has contributed to your poor health.
However, it is worth doing. This is because a good lawyer can negotiate compensation from a winning case that will cover your medical bills. Sometimes they can even get a little extra for the inconvenience and suffering that you have been put through.
Some folks choose the option of getting a loan to pay medical bills. Obviously, this isn't an idea as you are getting into debt just for the chance to be well.
Remember too that, if you or a family member is in a seriously enough condition that you need to take a loan out to help them, it is likely to affect how the family functions. So could decrease your ability to earn enough to pay it back.
That is why a lot of cases end up going to debt collectors. That means if possible, only use this option as a last resort.
Saturday, February 25, 2017
Whenever you hear the word invest, most people immediately start thinking about stocks, shares and Wall Street. They think about the impossible to read graphs that change on screens, and those figures with decimal points , flashing above manic trading floors, figures that jump up and then down and the back up again. But stocks, shares and even currency are just some of the ways you can invest.
There are multiple other ways in which you can invest your hard earned money, ways you never knew existed, and investments avenues that you never considered to be investments. What’s more, they are all far less complicated and far less risky than stocks, shares and currency.
Invest In Your Debt
Investing in debt is the best investment you can ever make. Period. It may not feel like you are actually investing anything, but when you consider how much you will save in interest and repayments, you’ll reconsider your prior stance. So if you have a mortgage, or credit cards or even a student loan, take that money you were going to invest elsewhere and invest it here. Let’s say your credit card is charging you 10% interest, well by paying that off you are effectively making an investment that yields a 10% return. That is a fantastic return, that is more than most investors hope to make. What’s more, you won’t get taxed on it, and there are no risks attached to it. It is an investment that comes with a guarantee, and that is rare.
Invest In Healthcare
So many people don’t realise that it is possible to invest in the healthcare sector, but it is, and it can be financially rewarding too. Of course, there are a lot of variations to take into consideration, but there are also a lot of trends that can make this investment safe. For example, there is the aging population of baby-boomers, and the fact medicinal advancements have seen people with chronic diseases live for longer. Then there are the high rates of medical loans and the fact that the industry is seeing huge technological advances, as well as the sudden focus on more personalized medicine. It may take some researching, but healthcare is a huge priority for almost every government and every facet of society, and that makes it a good investment option.
Invest In Property
Bricks and mortar have been a very desirable investment for years and that is because it is an investment that is tangible, an investment that serves a purpose and an investment that will always command a demand. If you buy and the market drops, then you either live in your home or you rent it out. If you buy a property and the market booms, well, your investment is going to skyrocket. But don’t think that investing in property is all about buy a house, or increasing your portfolio because it isn’t. Investing in property could just as easily mean renovating your home, or adding to it as a means to increase its value. As such, property remains one of the safest investments out there, and one that will always be encouraged by us.
Friday, February 24, 2017
You always work hard to earn money and provide for your family. So, you should never let anyone rip you off and leave you broke. Fighting for your income rights is essential if you want to live a long and happy life. At some point, it is guaranteed that something bad will happen and you’ll get a raw deal. With that in mind, we wanted to draw your attention towards some of the most common problems. Hopefully, you can use the information in this article to ensure you never lose out. You just need to make sure you take the right steps, and you can get things back on track.
Taking your employer to a tribunal for an unfair dismissal
Employers have obligations to follow a standard disciplinary procedure before they fire workers. They are not allowed to sack you without taking certain steps first. If you feel you were dismissed unfairly, you can take the company to an employment tribunal. That is where you will present your evidence to a panel, and they will award compensation. In some instances, the business will have to pay you thousands of dollars. In other situations, they might have to offer you job back. Either way, you get your income back to normal and continue with your life. You’ll just have to contact an experienced lawyer to ensure you present your case properly.
Making a claim when an injury affects your earning capacity
There is no way of knowing when you will suffer an injury that limits your ability to earn income. If that happens and it was someone else’s fault, you can make a claim. Any good personal injury lawyer will assist you in simplifying the process and getting the best results. So, you just need to read reviews and find a reputable professional. It might take between six and twenty-four months to get your compensation. For that reason, it’s always sensible to keep some spare cash in your accounts. That way, you can continue to pay your bills while the case goes to court. In some instances, the guilty party will offer a settlement ahead of time. You just need to consult your lawyer and ask for their opinion before you accept.
Claiming tax back from the government
Lots of people end up paying too much tax to the government at the end of each financial year. There are methods you can use to claim that money back in most instances. You just need to read as much information as possible and make the right moves. However, the best way to keep your cash is to ensure you complete your return correctly. Perform a lot of research ahead of time and always list your expenses. There are professionals out there who can help you with the process. With that in mind, it could make sense to use a specialist accountant in the future. That way, you shouldn’t end up giving the IRS too much capital in the first place.
If you manage to navigate those situations successfully, you should keep your finances in order. As we mentioned only a moment ago, sometimes it makes sense to take action ahead of time. So, use an accountant, and educate yourself about employment law. It might take a few weeks to get things sorted, but at least you’ll have the right information and support. Good luck!
Sunday, February 19, 2017
With the cost of renting now at a stage where it is almost going toe-to-toe with the cost of a mortgage, it can be a seriously daunting task to try and save up enough money to have a deposit. It can be stressful, it can be exhausting, it is riddled with sacrifice and it can sometimes all fail at the last hurdle. Basically, every cent matters when it comes to saving your money, which is why we have compiled a list of ways to help you in your mission to save up for a down-payment. All you have to do is read on.
The biggest killer of your down payment pot is your current rent, which means you need to address this. Don’t worry, it isn’t forever. In fact, the duration of this sacrifice will be far shorter than you may think. All it requires is moving out of your own space, your current space, for six months, maybe a year depending on how much you want to save. So what are your options? Well, the best and worst option is moving home to live with your parents. We know this may not be ideal, and may even feel like a step backward, but they would relish the opportunity to help out and you’d been able to save a sizeable chunk of your monthly paycheck, even if you had to pay a little bit of rent to your folks. Of course, if this isn’t possible, then it is isn’t possible. It is not the end of the world, though. Why not have a look at moving to a cheaper place. Most of us rent or buy what we can afford instead of renting or buying the cheapest and smallest place comfortable to live in. So why not try that little piece of advice from the Minimalists. Or why not get a housemate in your current place, that way you can split rent and bills, and thus save money.
It may be an odd suggestion, paying off your debts instead of saving your money, but your debts are likely to be causing you more harm than good. What’s more, by paying off your debts you are actually making an investment. It could be credit cards, student loans, the money you owe to the IRS, it doesn’t matter. What matters is that you find a way to pay off these debts or get a better deal. It could be you speak to your accountant. However, it could be that you have to approach BC Tax LLC complaints department. Both of these options will be helpful in the short term and long term. As a rule, though, the more you pay off the less monthly outgoings you have, and the less debt or tax issues you have, the more you can borrow for your house.
If it is just the deposit that is holding you back in the purchase of your home, then why not formulate a new plan and consider shared-ownership. This is an exceptionally good and affordable alternative, especially if you are looking to get on the market for the first time, or out of the renting market. How this works is relatively simple. You buy a portion of the property, anywhere between 25% and 85%, which means your mortgage would be smaller, and in turn so would your down payment.
Saturday, February 18, 2017
Picking the right bank account for your needs can be a confusing and stressful task. Whether you’re paying your bills, saving for a holiday or you're looking for somewhere to keep your everyday spending money, different bank accounts can have different benefits for each. Pounds till Payday, a payday loan company, have some advice for how by using different accounts, you can find the best one to suit your needs.
Your everyday account is one of the simpler ones to find. This account can be used for your day to day spending from the big weekly shop to smaller impulse buys. You can also use this one to pay your bills.
Find an account that enables direct debits and standing orders. Most bills you pay, such as gas, electric, phone, internet, will be payable via direct debit. If you arrange for these payments to be made automatically on the day you get paid, it is easy to make sure you don’t fall behind and you can also see how much money you have left for the rest of the month. These accounts will also allow you to set up standing orders to your other accounts so that money for savings or a mortgage can also be automatically transferred on a date of your choice.
Certain accounts will also allow you an overdraft facility to help you ensure you don’t run into financial difficulty and rack up bank charges. Information on how much these cost can easily be found on banks websites so you can shop around. Other bank accounts offer benefits such as cashback on purchases and bill payments so if this interests you, have a look at what each account offers. If you want a contactless card, research which accounts offer these before you commit to one. Contactless technology is available in hundreds of stores now and will be rolled out to all card machines within a few years.
If you’re buying a house or looking for a loan, the bank that runs your everyday account may not be the best place for this. Different banks have different criteria for lending and different interest rates so shopping around for the best deal is essential. Comparison sites can be a huge help and offer impartial advice on the pros and cons of each bank. Some banks still offer guarantor mortgages and springboard mortgages which allow your family to help you buy a house so if you need extra help then these could be the one for you.
If you’re saving for something big or small, it's important to find the account that offers the best interest and tax free saving. If you’re saving for a house in the UK, the Help to Buy ISA will match your savings so that you can double the amount you’ve put by. This can help you buy your first home and get yourself on the property ladder.
Saturday, February 11, 2017
Running is a business is a unique experience, but there is one experience all business owners share. That experience is the phenomenon of going through a rough financial patch. For whatever reason, every company has to tighten their belt or even watch their finances fall of a cliff. It is not easy, it is not nice, but more importantly, it isn’t the end of the world.
Get A Quick Loan
Just because your finances are in bad shape doesn’t mean that you don’t have bills to pay. Your lenders might sound sympathetic but they won’t give you a reprieve because they want their money. From their point of view it is just bad luck. Due to their lack of sympathy, you can’t say you refuse to pay anymore. Not only will it hurt your credit rating but it will spiral out of control. The only option is to take out a loan to cover your debts. And don’t worry if you have bad credit as online loans for bad credit are readily available. At least with a loan you can continue to function while you come up with a plan.
Cut back means you have to cut back wherever possible. Some cut backs speak for themselves, like moving offices if the rent is too high. There are others, though, that aren’t as easy to spot. Transforming into a paperless office is a great example. You might think that it won’t make a difference but it makes a big difference. Businesses can spend hundreds and even thousands on paper every year. By getting rid of it altogether you don’t have to pay the costs. Regardless of the amount, you should make it happen. Remember that every little helps.
Hire An Accountant
‘Wait a minute, you just said I should cut back on my business expenses?’ Yes you should, but sometimes to have to spend money to make money. It’s a strange concept to understand, yet it is one that can save your business. Paying for an accountant to look after your finances will save you a fortune in a range of areas. Accountants, for instance, know how to structure your finances to avoid bank charges. They also know how to pay off debts so that you always have liquidity. Their expertise will save you money even if you have to pay them a wage.
Finally, don’t lose your head and make bad decisions. The shocking truth is that businesses often kill themselves in this period because they lose focus. As soon as they hear the news, they try and dig straight out of the hole and go for the Hail Mary. Your finances are a long-term project and you should treat them as such. So, take a deep breathe and think about what your next steps are, then execute the steps one by one.
How you react when you are in financial trouble is vital as the wrong reaction can be fatal.
Friday, February 10, 2017
In today’s guide, we’re going to run through a few ideas on how you can enjoy better margins just by being sensible, making better decisions, and changing the focus of your business. Read on to find out more - and with a little luck, you will reap the rewards in the not-too-distant future.
Be more vigilant
First of all, it’s important to know where your money is going. This involves a broad range of activities, from tracking every last penny spent to holding regular reviews of expenditure and costs. It’s probably the most important and dramatic thing you can do if you want to start seeing higher profit margins.
Streamline your business
According to Rezzable, streamlining your company is the most important thing you can do. Streamlining is not just about cutting costs, of course, it's also about organising your business better, to ensure that productivity remains high. The idea is to make every single task in your business more efficient, and remove many of the flaws and blockages that many companies experience on a daily basis.
Focus on customer experience
Ensuring every customer sees your company at its best costs nothing. And, given that every penny your business makes comes from those customers, it makes sense to reward them for it. Offer a great customer experience, and you will reduce buying abandonment and brand disloyalty, and increase brand recognition and, most importantly, your profit margins.
Retain current customers
Instead of investing quite so much in finding new clients, start doing more to persuade your current clients to keep purchasing from you. Keeping customers is always cheaper than finding new ones - so consider how you are communicating with them, or offer them new deals and discounts.
Speed up your processes
The faster your turnaround time, the lower your cost per sale - it’s a simple premise and one that should tell you the importance of tracking your order and delivery systems. Making small changes can have a significant impact, and the less time you spend between order and delivery, the better your margins will be. Eliminate wasted time, automate what you can, and do everything possible beforehand to ensure speedier beforehand.
Cut low paying clients
What areas of your business are high producing? If you can work out where you earn your money, you can start focusing on dumping low paying clients, and do more to attract high payers. Don’t underestimate the impact low payers can have on your business, particularly if you are offering services. They drain your time, demand more for their money, and might actually end up costing you!
So, there you have it - a few handy tips to help you improve your profit margins Good luck - and feel free to share any tips in the comments section below!
Thursday, February 9, 2017
It’s hard enough to keep things afloat and your financial standing solid when you’ve got any children, but it can get all the more difficult when your family keeps getting bigger and bigger. Naturally, you will have reviewed whether you can afford to have any child before you made the decision to do so, so it’s unlikely that the basics - food and housing - will have to be too severely compromised. Still, it’s wise to have a stringent plan in place to make sure things don’t unravel. Nothing can put more undue stress on a family like money, after all!
Establishing the Rules
If you’ve got plenty of kids, then you’ll need to set the ground rules so everyone knows what they’re dealing with. Your family budgeting probably didn’t account for everyone to stay in the household until they’re in their mid-thirties. It’s pretty simple - when they reach a certain age, they have to contribute X amount of money to the household. It can begin as a small amount, a token gesture to teach them the responsibility of providing, before working up to an amount that makes a real, positive difference. You might also have a rule that says by the time they’re 23 (or whatever), they need to be in the process of moving out of the family home.
To the Future
You're responsible for the family’s money, and it’s important that you keep an eye on the long term growth. This is as much for your own sake as it is for your partner’s and children’s. Speak with a financial expert on occasion to get an honest assessment of your finances; they can advise when you should be selling your home - or not - and so on. Be sure to choose the right estate planning advisors well in advance, as an unforeseen accident can complicate financial matters hugely - especially when a large family is involved. Keeping an eye on the housing market and deciding when to sell the family home and downsize is also important, as this will free up a lot of cash and boost your financial standing.
Their Rainy Day Money
A large family doesn’t necessarily mean that you won’t be able to gift your children savings to get them started in life, it just means that you’ll have to start the saving sooner. Put just a small amount of money into your children’s individual savings account each week can result in a large chunk of money when it’s multiplied by eighteen years or so. You may also speak to a financial advisor about what they best way to present the savings to your child is, as there may be options that will keep the money growing.
Keeping them in the Loop
Of course, if times ever get tough then you should be willing to open up and talk to your family about the state of your finances. Many families keep money issues far away from the children, but by keeping them in the loop you’ll be taking unnecessary stress off your shoulders and teaching about them financial matters.
Tuesday, February 7, 2017
2016 was a big year. We saw a polarization in politics like never before in the West with events like Brexit and the US election, and investors all over the planet are wondering whether this is a sign of things to come. Businesses too are reporting that thanks to the changing political climate, they’re altering their behavior and planning how they are going to navigate a challenging political landscape.
The good news for individuals is that global growth remains strong. According to estimates, global growth will expand this year from 3.1 percent to 3.5 percent, mainly because of the new pro-growth strategies outlined by the incoming US administration.
With things changing so fast, what does should the small investor be doing? Here’s some advice to weather the storm.
Start Peer-to-Peer Lending
Peer-to-peer lending wasn’t even something that was possible until a few years ago, and we go the cloud. But the very fact that it exists is worrying. In a normal economy, it’s the job of banks to take the money of savers and lend it out to borrowers. But the fact that people feel the need to go to peer-to-peer services to get a return on their money shows that the traditional market just isn’t clearing. More people want to borrow than the banks will allow, prompting savers to enter the market and lend directly.
Granted, it’s all very strange, but there are some significant returns to be had. According to Bankrate, annual returns are between 5.3 and 8.6 percent, more than triple what most savings accounts currently offer. Riskier loans based on lower borrower credit scores offer even higher rates of return than that, although the risk is considerably greater.
Art And Rarities
Investors have been piling into art recently in search of better returns. Art and rarities are seen as a sort of safe haven when the stock market is in turmoil because they tend to keep their value over the long term. Recently interest in art has been pushed, however, by increasing sticker prices of top works of art.
Michael Saigh, a managing partner at a rarities investing company, says that for many small investors, opportunities are limited because of high entry prices. Some start at more than $1 million. But with the growth of art shares, it’s becoming easier for individual investors to get a stake in the market.
The growth of cloud platforms, as discussed on the Investor Services about us page, are giving investors the opportunity to make sure that their investments meet IRS requirements. This is important whenever individuals are investing in things like art and rarities using their 401(k) funds.
Finally, there has also been a surge in the number of investors doing things that they hope will save the world. With people like Mark Zuckerberg and Bill Gates making high-profile announcements about their charitable investments, many others are following suit.
The cool thing about many of these investments is that they still generate positive returns, even though their primary goal is to achieve social good.
Monday, February 6, 2017
So, you have been injured in some way shape and form which has stopped you being able to work and as a result stopping you from earning money. Well, try not to panic too much there are a few things you can do to get the results you need to keep living until you get back on your feet and can go back to work. The issue is similar to debt in that you are pretty much hamstrung, but with some perseverance you can be back to work in no time.
Cut Back On Spending
This is the first thing you need to do. If you have a partner then they can help support you but otherwise you need to really cut back on everything to stay viable. Reel in the luxuries and see what else you can save money on. You’ll be surprised. There will be a few things you may not even think about. Gym membership? Cancel it. If you’re injured you won’t be going anyway. If you’re housebound you will find you spend less money because you are not going out as much. But if you take a determined stance not to spend more money you can really make a difference.
Ascertain Your Rights
Say you were walking underneath a building site and a stray piece of masonry hit you on the head. This is clearly not your fault. Don’t suffer the financial burdens if it really wasn’t your fault, it is just not fair. Find a personal injury attorney and you can take what is owed. On this note, check the fine prints of your work contract to make sure they aren’t underpaying you sick pay. You may find out they aren’t paying you when they should be, so do your best to find out what is going on.
Are You Now Disabled?
If the injury was really bad and you are now in some way disabled then check your local government policies on disability allowance because there could be some money and health based benefits available to you such as a carer who can help you settle into your new mode of life. Explore every single aspect available and you can soon see you beating the bills.
Make Money From Home In The Meantime
If you will be out of work for a while and not getting paid then consider working from home for a period of time. You may not make as much as you were in the previous job but it will surely be enough to survive on and pay the bills and it will also give you something to do. Beating the depression is important and even if you are only making money by transcribing or writing articles it can still give you a reason to roll out of bed in the morning. You can find a great list of ways to make money from home here. Pick what best suits you and give it a go. You may end up making more than you think.
Sunday, February 5, 2017
After over 40 years of workingyou’re looking forward to your retirement. And why not? You’ve paid your taxes and saved diligently to make sure you’ll live comfortably when you retire. But you’re worried that the taxman may take more than his fair share of your estate when you die. What can you do to prevent this?
One of the best ways to reduce Inheritance Tax (IHT) is to set up a Trust and put some of your cash, investments and property into it. The value of a Trust is deemed to be no longer part of your estate for IHT purposes. But be careful because setting up a Trust can be quite tricky. It’s best to take advice from yourchartered accountant, estate planner or inheritance tax specialists.
If you think your estate might have to pay inheritance tax in due course, then here are a few reasons why setting up a Trust makes good financial sense.
How a Trustcan benefit your IHT exposure
A Trust could be set up to pay for a grandchild’s education, or for the support of a family member who may have a disability, or to help reduce the effects of Inheritance Tax. A Trust is a useful IHT planning tool for the next generation. To understand how a Trust works, let’s look at a typical example.
Here, we have a family where the husband has considerable assets. If he places these assets in trust prior to his death it won’t affect his own IHT liability but it can substantially reduce the amount of tax his widow will have to pay when she dies. The husband can also keep control of his assets while he’s alive.
When the husband’s widow eventually dies, only those assets that have been transferred out of the Trust into her direct ownership are counted as part of her estate and liable for Inheritance Tax. By transferring assets if and only when necessary, it’s possible to keep the widow’s estate below the IHT threshold, even though the Trust may hold a much larger sum.
One of the rules of a Trust states that no potential beneficiary can have an ‘absolute entitlement’ to any of the assets. Instead, all transfers out of a Trust have to be made at the discretion of the trustees and they must all be in agreement.So, when setting up a Trust be very careful who you appoint as trustees. It only takes one person – a stepson or daughter who has a gripe with the widow – to vote against a transfer of funds. It’s recommend that at least two people are appointed as trustees. One of these could be a family member and the other a professional such as a solicitor.
The husband can write a ‘letter of wishes’ to the trustees setting out how he’d like the Trust‘s assets to be dealt with, but because beneficiaries have no absolute entitlement to any assets, the trustees do not have to follow the wishes contained in the letter.Trusts are normally wound up either after two years of the first spouse’s death or when the surviving spouse dies. When this happens, the remaining assets are dealt with according to the wishes letter.
Protect yourself with expert advice
As the rules around IHT exemptions are complicated, it’s best to consult your accountant or solicitor to see how much tax you could save by setting up a Trust. One of the strange things about a Trustis that the Trustitself may, in certain circumstances, have to pay Inheritance Tax, and the trustees, whoever they may be, might be liable to pay income tax at a rate of 45%.
Suffice to say that the rules around Trustareextremely complicated and not to be taken lightly, so don’t be foolish, take advice from a professional in these matters.
Capital Gains Tax (CGT)
If you transfer property into a Trust, be careful because there may be CGT implications. However, CGT does not apply if you establish the Trustin your Will. Speak to your accountant about this.
One of the best things you can do is take out an insurance policy on your life. This won’t lessen the amount of IHTyour estate may have to pay, but your insurance settlement will definitely make it much easier for your surviving family to pay the Inheritance Tax bill.
The lumpsum amount from the insurance policy could prevent the family home from having to be sold to cover the IHT bill. But if you do take out a policy, make sure the proceeds are paid directly into trust – if you don’t it will increase the size of your estateand as a result more tax will become payable!
This article was written by Dakota Murphey, an independent content writer who specialises in family law.
Saturday, February 4, 2017
According to a recent survey done by Gallup poll, only 30 percent Americans have a long time financial plan and about 32 percent take the time to put together a monthly budget! One of the biggest mistakes people make when planning a monthly budget, or any budget for that matter, is that they tend to leave out the small things in life. And there is a lot of them. From that cup of coffee that you bought at the overpriced coffee shop, to the movie you just had to see on opening day. And of course, all the other small things in between. In the long run, these add up. By the time, you get the invoice from the credit card company it’s too late. And it’s usually only then you will sit down and have serious thoughts about planning a monthly budget. With a little discipline and fortitude, it’s possible to plan a budget that suits you.
Budget planning comes down to one thing, staying financially within your means. Never fool yourself into thinking that a monthly budget will save you from unexpected troubles, such as a medical bill or a tree branch damaging the house. But it will help you greatly to deal with such a scenario. That’s what it is all about. There was a time when monthly budget planning basically involved balancing your checkbook. Not so anymore. The questions that should come to mind is “what exactly is my monthly income”? For some this a simple and obvious question, for others not so much. You must consider all the income you may be getting, such as stock dividends and so on. Then there are taxes. As the great Benjamin Franklin once said: “In this world, nothing is certain, except death and taxes”. After all these numbers, have been crunched, you will get a clear idea what exactly you must work with.
As mentioned earlier, you may get an invoice from the credit card company each month. This is an excellent place to start finding out what you’re monthly spending is. Most people will have two kinds of expenses. They can be divided into flexible and fixed expenses. Generally, fixed expenses will get the highest priority. If you are making a car payment, or mortgage loan, there will not be a lot of wiggle room. So, the first step would be to add up all fixed cost. Once this is done, you will get a clear picture as to what you want to cut down on.
After you have fixed cost figured out and out of the way, you can slowly start chipping away at flexible costs. Flexible costs can be different things for different people, but food and clothing are standard for everybody. However, even with something as important as food, there are ways to trim things. One way would be to eat out less. Grocery shopping with coupons can help save a lot in the long run. We can talk about cutting back on things all day long, but what we need to take away from all this is the importance of prioritizing our expenses.
In a way, our lives are not that much different from running a business. Just like a business, we need to set financial goals. We should ask ourselves where do we need to be financially at a time of our life. It can also help us make specific goals such as a car purchase. Even people who do have budgets and goals in mind, tend to it mentally. This is not a good idea in the long term. Always write down what exactly it is you want to accomplish. This will serve as a reminder of what the goals are. Pull out a sheet of paper and divided it into two columns. Left side for income, right side for expenses.
In this day and age, there are countless resources to help you balance your budget. There are websites and even software programs that can help you with it. There are even apps for smartphones designed specifically for budget balancing. When you consider how important something like credit score is, there is just no excuse not to do a monthly budget plan.
Veronica is an enthusiastic young blogger that writes for Expert Product Reviews. Here, she reviews entire categories of products and not individual models in order to offer you a complete picture of all options available on the market. Her mission is to provide the readers with comprehensive and trustworthy opinions to help them make the perfect buying decision.
Wednesday, February 1, 2017
It’s happening later and later than ever before, but at some stage we must all become financially independent from our parents. It’s not fair on them, for a start, but it also holds you back from your own hopes and dreams. If you’ve left it later than you’d have liked to remove yourself financially from them, then go easy on yourself: things have been stacked against you, with bountiful jobs, cheap housing, and all the other benefits your parents enjoyed not being handed down to you. Now’s the time to move forward and become your own person.
Step One: Make the Decision
Nobody can become financially independent over night, but they can begin the journey towards being so. This means making the decision and sticking to it. Talk to your parents about the direction you’d like to go; they’ll feel relief, most probably, but also a determination to help you. From now on, you’ve moving towards being responsible for your own finances. Congratulations, you no longer need to fear what might happen should they lose their job, take a trip to their wills lawyer, or decide to cut you off!
Step Two: Make a Plan
Financial independence is a long game. Make a plan, a realistic one. What is your current financial position? What does the endgame of your road to independence look like? And how long are you going to give yourself to get there? It might be that you’re not yet able to even move out of your parents home, never mind not rely on them for money. But with a clear plan of where you’re going, you’ll be taking a significant and positive step.
Step Three: Budget and Save
Part of becoming an adult is to understand that you have responsibilities: you can’t just spend whatever you like, do whatever you like, and hope to come out on the other side with everything neatly in place. Make a budget for your money: what are your outgoings? Then take a pen and strike a line through anything that can be cut, which should include the luxuries like trips to the pub and eating out at restaurants. You don’t have to be hermit, but you’ll need to think more about where your money is going. Then SAVE the money you’re not spending. We don’t mean for a holiday - we mean for your life! You should aim to put around 15% of your wages into a savings account. Even if that doesn’t seem like much, it’ll soon build up.
Step Four: Long Term Income
The first three steps will set you up to become financially independent, but to make it stick you’ll need to have a reliable source of income, one with which you’ll be able to maintain the standard of life you want for yourself. If you’re already in a career, think about where it might take you in the future: is it secure and well paying enough to set you up? If not, investing some of your savings in further training might be a solution.