Managing your personal finances can be challenge regardless of how much money you are earning. Financial issues do not just affect individuals from low-income backgrounds, so if you do find yourself in trouble, know that you are not alone.
If you are looking to get out of a financial hole, or are simply wondering how to finance an important purchase like a house or car, then the first step is to gaining an understanding of all the options available to you.
Visit the bank
Your local bank may not be able to help you in every situation, but it certainly provides a good starting point. Firstly, come prepared by having a clear idea of what you’d like to achieve as part your visit. If you are looking to arrange an overdraft with your bank so you can temporarily withdraw more funds then this is a relatively simple process. Depending on your circumstances, you may even be able to achieve this without paying any interest.
On the other hand, if you are looking to arrange a loan, the process may be a little more complicated. There are a number of different types of loan available for personal circumstances, including an unsecured and secured loan. The former is less common and involves the borrower simply agreeing to pay back the loan in instalments. There is nothing to guarantee the loan and interest rates can be quite high. A secured loan involves some form of collateral in the event that the loan is not repaid, such as a property or a saving account. Banks may also offer mortgage loans and auto loans in the relevant circumstances.
If you are going to the bank to ease your money worries, remember that as well as offering loans they also provide financial assistance, so it’s always a good idea to speak to a personal advisor if you can.
Are you entitled to assistance?
Government support is not only available for the unemployed. There are a variety of reasons why you may be entitled to some kind of benefit, but it is your responsibility to find out. Support is available for low income families, as a result of ill-health or if you have children. If you’re not sure if you are entitled to government assistance, check in with a benefits advisor to see if you can make a claim.
In addition, you may also be entitled to support in the event of personal injury. If you have had an accident at home or work, legal assistance could give you the financial support that you need. Plus, if you are worried about whether you have the funds to acquire legal support, many agencies operate a new win, no fee policy, so you won’t have to pay out of your own pocket.
Bad credit? No problem
For many households, a bad credit rating can scupper their plans for the future. Past failure to meet payment deadlines, county court judgments (CCJs) and bankruptcy orders can lead to bad credit, or you may simply be unlucky. Sometimes moving into a home that has been “blacklisted” by credit agencies as a result of actions taken by the previous tenant can make it difficult for you to acquire credit, through no fault of your own.
In any case, there are ways to boosting your finances even if your credit rating is not the best. You could still qualify for a loan, for example, but may be charged higher rates of interest, or you could try to improve your credit score. Alternatively, there are other loan companies, like ApproveNow, that will offer you financing options for particular scenarios, such purchasing a car. In this case, a credit check may not even be required as long as you are in full-time employment.
If you are worried about your credit score, don’t despair. There may be other avenues that you have not yet explored, which could offer the personal finance solution you need.
An advance at work
They say if you don’t ask, you don’t get, and this is certainly true when it comes to asking for an advance on your wages. This is particularly useful if you have a short-term cash flow problem that is unlikely to be repeated in the near future.
If you are thinking about working up the courage to ask your boss for an advance, here’s what you should do. First, check if there are any official company guidelines covering this area – there may be a clause included in your contract, for example. Next, set up a meeting with your boss so you can make your request in private. Explain your situation carefully, stressing that this will not become a regular event and outlining the repayment process. Finally, express gratitude to your employer for entertaining your request, even if you have not been successful.
Maximising your income
If you’re looking to improve your financial situation in the long-term it’s worth considering whether you have potential income streams that are going unused. If you own your own home, for example, you advertise for a tenant to bring in a little bit of extra cash each month.
Alternatively, there are now a wide range of mobile applications and online outlets that will enable you to boost your income. Signing up to a service like TaskRabbit allows you to complete tasks for others for a fee. You get to set you own rates and hours and decide the type of work you do, so the amount of money you make is entirely up to you.
Save, save, save
If all else fails, the best way of protecting your personal finances is to save as much as you can, as often as you can. Different guidelines will suggest different saving rates, but putting aside anywhere between 10 and 20 per cent of your income is advisable. By saving when you can, you protect yourself against unexpected issues like job termination or personal injury.
It doesn’t matter how secure your job is or how experience you are with financial matters, money problems can strike at any point. By following the above tips, however, at least you’ll be armed with the knowledge you need to overcome your problems.