A Guide To APR

Loan Pig specialise in finding the best short term loan solutions to suit the needs of any kind of consumer in the UK. Our huge panel of lenders makes it an easy matter to compare loans and repayment options and select the best payday loan or short term loan to match your personal circumstances.

Many of our customers are confused about what the term APR (Annual Percentage Rate) actually means and how it affects the loans they receive. We’ve compiled this short guide to APR to provide all the answers needed and offer a useful starting point for all our customers looking at different loans from a variety of providers.

As already discussed, APR is the abbreviation for Annual Percentage Rate and all lenders have to display the APR for loans they offer. This is a legal requirement and you can find out more on the website for the Financial Conduct Authority (FCA). The way APR is calculated is to ensure all costs of borrowing are included. Therefore, loan company APR rates will include the interest costs and all associated fees over a 12 month period. This makes it much easier to compare different lenders, as you’ll see APR rates do vary considerably.

What Is The Official Reason For APR?

The official definition of APR which has been provided by the FCA states: “APR stands for the Annual Percentage Rate of charge. You can use it to compare different credit and loan offers. The APR takes into account not just the interest on the loan but also other charges you have to pay, for example, any arrangement fee. All lenders have to tell you what their APR is before you sign an agreement. It will vary from lender to lender.”

Why Is It So Confusing?

Different APR rates may seem a little confusing due to the fact that charges are included in all quotes. For example, your lender may quote an interest rate of 14% over the year, but highlight the official APR as 17%, and this increase is due to all the charges included within the rate. Although it may seem a little complex, it actually makes very good sense. Displaying total APR in this way makes it much easier for you to compare loan costs and choose the lender that is best suited to your budget.

How Is Interest Worked Out On My Loan?

Most lenders use their quoted interest rates to calculate the interest due on loans. So, if your lender applies an interest rate of 20% and you borrow £100 for 12 months, the total amount you would pay back over the year would be £120.

How Does APR Work?

The APR rate quoted by your lender is the total amount you will pay for the cash you borrow calculated over the entire year. In the simplest terms, if your lender quotes an APR of 30% and you borrow £100 for six months, the total you will repay is £115. This total cash pay back relates to the repayment of the £100 borrowed plus six months’ interest at the quoted rate of 30%. If you had borrowed the £100 for 12 months, you would repay a total of £130 to your lender.

How Can I Save Money On Loans?

Checking different lenders to find out what APR rates they apply to payday loans, short term loans, and credit cards means you can source the cheapest loans and save money on the charges you have to pay back. It is important to check that all providers are displaying APR rates, though. Some credit card companies state they offer credit at interest rates of just 2%, but when you look into the facts you will probably discover the interest rate charged is the monthly rate and not the APR rate.

Once you understand just how APR works and the ways it impacts on cash lent then you will be in the best position to shop around and save money on the cash you borrow.

Finding The Best Short Term Loans

Short term loans are often emergency payday loans used to top up cashflow when funds are tight, or when last-minute payments need to be made to get you out of a fix. This can make them a riskier loan option for lenders, as they also tend to be unsecured, meaning the lender cannot use your car or home as a security against defaults. For these reasons, it’s often the case that short term loans are quoted at a higher APR than loans provided by traditional financial institutions, like banks.

When you need emergency cash in a hurry, it’s a speedy matter to access short term loan providers online. And, now you understand the importance of APR, you can compare lenders to source the cheapest loans to suit your needs.

Shopping around for the best and most affordable loans is really easy with Loan Pig. You just need to type the amount you want to borrow and the amount of time you need for repayment into our quick calculator. We search around all our lenders and get back to you with a selection of lenders most suited to your needs. You can check out the APR rates of all these selected loans on the lender’s website and make your borrowing decision accordingly.

The post A Guide To APR appeared first on LoanPig.

source https://www.loanpig.co.uk/a-guide-to-apr/

Best Ways To Save Money

Everyone wants to save money right? But saving money usually means doing without or scrimping and saving. But with these five money saving tips, you could save hundreds of pounds a year without having to compromise your lifestyle.

1. Make use of price comparison websites

No matter if you’re looking for car insurance, broadband, mobile phones or a new bank account, comparing rates on price comparison websites can ensure you get the best deal.

You should get into the habit of checking price comparison websites every time you need to renew items such as car and household insurance. Once a year, it’s a good idea to go through your utility bills, mobile, broadband and bank accounts to make sure you are getting value for money on all these items.

2. Make use of a FREE overdraft

If you find you are regularly overdrawn and you don’t have a FREE overdraft facility, you are likely paying hundreds of pounds a year to your bank in interest or unauthorised overdraft fees. You can reduce this by changing to a bank account which has an interest free overdraft facility.

So, stop throwing money down the drain and get your finances in order by making full use of an interest-free overdraft facility.

3. Consolidate your credit card debt

If you have large credit card debts on multiple cards, you should think seriously about transferring them to a credit card which offers zero per cent interest on the transferred debt.

A word of warning though, such deals are usually accompanied by a transfer fee and are only available for a limited period. So, make sure the transfer fee doesn’t outweigh the interest saving and pay the debt off before the zero-rate period expires.

Alternatively, you may want to consider consolidating your credit card debt into a single loan with a reduced interest rate. Private loans usually charge much lower interest rates than credit cards, and you may be able to utilise a bad credit loan if you have a less than perfect credit score. So depending on how much you owe, you could save a significant amount by consolidating the debt into a single loan.

4. Get a better mobile phone contract

The mobile phone space is competitive, so if you’ve been with the same provider for many years the chances are you are paying too much. Much like insurance providers, mobile phone companies provide much better deals for new customers than they do for existing ones.

So, take a moment to analyse your mobile phone bill to see how much you are really using. Then use a price comparison website to see what deals are available. You will be surprised just how much money you can save by doing this.

5. Pay for things in advance

Many companies provide a discount for paying annually. Examples include your gym membership, car insurance and broadband. So, if you can afford it, pay the whole fee upfront and save a bundle.

Some companies also provide discounts at certain times of the year. So, plan ahead and pay for things when they are discounted. You could buy Christmas cards in January when they are on sale, for example – no one will notice.

By using one or more of these money saving tips you could save hundreds of pounds a year in interest and late payment fees. Put the money towards a holiday or better still pay off your credit card debt early to save even more money. The choice is yours, but it’s nice to have a choice isn’t it?

The post Best Ways To Save Money appeared first on LoanPig.

source https://www.loanpig.co.uk/best-ways-to-save-money/

How To Get A Loan With Bad Credit

If you’ve been turned down for a loan with a bank because you have bad credit, it might still be possible to get the cash you need. The key is to learn how to get a loan with bad credit and which lenders will let you still borrow money.

Why don’t banks lend to people with bad credit?

When a person applies to borrow money from a bank, the bank’s credit assessor checks that person’s credit score. A person’s credit score provides some insight into their past financial history, so the bank can see who is likely to keep up with their repayments and who is more likely to default and miss payments.

For example, someone with a high credit score above 800 obviously has a strong history of making all their repayments on time and taking their financial obligations and responsibilities seriously.

By comparison, a person with a bad credit score may have struggled with some financial difficulties in the past. As a result of those difficulties, they may have missed some payments or filed for bankruptcy.

If a person with a low credit score applies for a bank loan, it’s likely most lenders will decline the credit. Fortunately, there are some lenders willing to offer loans to people with less than perfect credit.

What is a bad credit loan?

Bad credit loans are usually set up as short-term payday loans, so you’re expected to repay the amount you borrow quickly. When assessing your application, a bad credit lender will check your credit score. Your score is considered ‘bad’ if it falls between 300 and 579.

What else do the lenders check?

Along with checking your credit score, lenders will also want to check some other criteria, including:

– You are a UK resident
– You have a regular source of income
– You have a debit card attached to your bank account
– You have a valid mobile phone number
– You have an email address

Even though you’re asked to submit a valid mobile phone number, our panel of bad credit lenders won’t call you. Instead, your information will be verified online.

How do I apply for a bad credit loan?

The process for applying for your loan is quick and easy. Simply enter the amount of money you want to borrow and the period of time you want to repay your debt over.

The online calculator will work out how much your monthly repayments will be. If you can afford to keep up with your repayments, you can proceed to enter in your personal details.

All of your personal information is kept secure and remains strictly confidential at all times.

You can find more information about the application process by viewing how it works.

How fast can I get the cash?

If your loan application is submitted and approved before 3 pm on weekdays, it’s possible to get your cash paid into your bank account on the same day. However, if your application is submitted later in the day or the approval takes a bit longer, the cash may arrive the following day.

Does a bad credit loan affect my credit score?

As with any other type of credit, applying for a bad credit loan can affect your credit score. If you make all your repayments on time, the lender will report the activity, which could reflect positively on your score.

However, if you fall behind on your payments or don’t make payments at all, the lender will also report the lack of financial responsibility. Not only will your credit score be negatively affected, but you could also incur penalty fees and late payment fees that increase the amount you owe.

It’s also important to remember that your credit score may also be impacted if your file shows lots of credit checks in a short amount of time.

The post How To Get A Loan With Bad Credit appeared first on LoanPig.

source https://www.loanpig.co.uk/how-to-get-a-loan-with-bad-credit/

Tips for Finding the Best Bargains

Tips for finding the Best Bargains

If money is tight then it’s best to do everything you can to reduce your monthly outgoings.

As well as having little or no spare money you might be one of those people who have bad credit, this could be down to a missed payment or a misunderstanding with a credit lender in the past or you could have just been going through a time where money was scarce and you got into difficulties.

The main thing when trying to recover from a history of bad credit is to keep paying of your loans at a rate that will suit you and your lender, but also keep your borrowing down, only choose the best loans for people with bad credit and only choose the amount you can really afford.

Fortunately, there are a number of fairly simple ways to reduce the amount you spend each month without having to make significant changes to your lifestyle. We’ve rounded up a few of the best and most effective ones in this article.

Get to know your Supermarket Discounts

Every supermarket discounts food at the end of the night that would otherwise be thrown away. However, they all have slightly different schedules and policies on how they do this. It’s worth visiting your supermarket a few times in the evening to suss out what this policy is (or, if you feel really brave, asking someone who is walking around with a pricing gun). The discounts on offer in the evening can go up to 90% and, if you’re able to freeze what you buy, the food can last for a long time.

Reducing the Direct Debit Mountain

Gym memberships, online streaming services, subscription deliveries: the list of things that most people sign up to and don’t really use is huge and it can cost a small fortune each month. It may be hard but look through your bank account, work out what can go and cancel those direct debits. Just make sure that you’re not locked into a minimum contract before you do. Cancellation penalties, particularly from gyms, can be incredibly steep.

Avoiding impulse Purchases

This one can be pretty hard but it’s well worth sticking with it. If you add up the amount of money that you spend on coffees, snacks, vending machine treats and other small purchases over the course of a month then you may well be staggered by the number that you come to. By cutting these out and maybe putting a pound or two in a jar at the end of every day instead, you can quickly build up an amount that will help you to take control of your situation and reduce the debt pile that you are working with.

Best Loans for People with Bad Credit

LoanPig can offer you some of the best loans for people like yourselves who might have bad credit from  5 years ago or from just a few months ago. People get into difficulties for all sorts of reasons, but remember, you can still get credit or a loan to help you through the worse even if your credit score is low.

You are more than a credit score, some lenders like LoanPig.co.uk and others will look passed your bad credit score and be able to offer the best loan for people like yourself with bad credit

The post Tips for Finding the Best Bargains appeared first on LoanPig.

source https://www.loanpig.co.uk/tips-for-finding-the-best-bargains/

How to Holiday on a Budget

How to Holiday on a Budget

Spring is in the air and you are thinking of the warmer weather that is on its way but when you’re short of cash, holidays seem incredibly out of reach.

However, if you are savvy about spending and use loans cleverly, you’ll be surprised what you can afford!

Even if you have bad credit you can still be savvy and save, save, save!!!!!

Flight comparison sites

There are many of these out there, so finding cheap flights is easier than ever. Always look to book your flights and accommodation separately to save money; the best deals out there are not usually found in traditional packages but sites offering cheap flights might be able to hook you up with a cheap hotel also!

Stay open-minded

If you can be flexible with your bucket list, you’re bound to find a bargain. Stay open-minded and book holidays to places that have offers on the flights or accommodation, you will save money AND explore somewhere new.

Remember, the UK has some beautiful and fantastic places to visit and a week at the seaside in summer can give you everything that a european beach holiday can give you, apart from the odd day of rain!!

Look into living costs

You don’t want to book cheap flights to later discover that accommodation and living costs of your destination are extortionate, look for sites that allow you to cancel so if you do find a better price or option change it, so do your homework before booking.

Look for up-and-coming destinations like Poland, Hungary, and South East Asia, for example, where you will find it difficult to break the bank when you’re there.

It is worth spending a little more on the flights to keep the living costs down when you’re on holiday; perhaps take out a loan to cover this to help you save money in the long run!

Get an apartment

Apartments often seem pricey, but this accommodation choice will save you money when you’re on holiday. There are many expenses that you’ll save by staying in an apartment rather than a hotel; your coffee in the morning, breakfast, meals out every day, drinks at the hotel bar… the list goes on!

You can take out a loan to cover the initial cost, and you won’t regret it when you get to your destination knowing that your next wage is covering the cost as a one off.

Stay local

Enjoying your home country has many advantages! You avoid exchange rate costs, you’re likely to spend less on travel, and you can stay with friends and family or camp to avoid accommodation costs. You will discover beautiful places too!

Great holidays CAN be achieved on a budget, and you may even find that you have more fun trying to be resourceful and creative with your money saving. Happy holiday!

The post How to Holiday on a Budget appeared first on LoanPig.

source https://www.loanpig.co.uk/how-to-holiday-on-a-budget/

How much Cash can I get with a Payday loan?

How much cash can I get with a Payday loan?

Payday loans can be an ideal way to solve immediate financial problems and get you out of a crisis. They’re usually quick and easy to apply for and generally offer instant decisions to applicants. If you are thinking about applying for a payday loan, one of the main things you’ll be wondering is how much you can actually borrow. This is discussed in more detail below.

How much can I borrow with a Payday loan?

As noted above, applying for a payday loan is quick and easy, but it’s important to recognise that any application will usually involve a check of your credit file, so you don’t want to make too many applications at once as these could have a detrimental impact on your credit rating.

This means it’s important to discover just how much you can borrow before completing any applications for payday loans online.

Most payday lenders will offer an indication of how much you can borrow on their website. These amounts do vary between different lenders, so it’s a good idea to shop around before making any decision. However, the beauty of using LoanPig.co.uk is that we’ll do all the searching for you, we’ll either be in a position to lend to you ourselves, or one of our many lenders will find you a loan. Many lenders state they will make loans between £100 and £1,000, however, if you are a new customer you will probably not receive loan offers of more than £500, expect for The Money Hive and a few others, that is.

It’s also important to check out the interest rate applicable to loans and the amount of time you have to repay the cash. Payday lenders offer loans at interest rates that can be vastly different, and this will impact upon the amount you repay.

Applying for Payday loans

Any payday loan application will need to be approved by the lender and they will take your creditworthiness and ability to pay back the loan into account. Some lenders will seek employer confirmation of your working status, although not all of them do. Some lenders may also require proof of income before making any lending decision. All these checks are geared towards confirming the loan is affordable and you will be able to meet scheduled repayments.

Payday loans are really just a temporary solution to a short-term cash crisis, so it’s vital you have the ability to repay the loan on due dates. Once you establish a good history with a payday lender you may well be able to borrow larger amounts of cash, however, this will all depend on the way you manage your initial loan.

Contact us if you require any more information on this subject

The post How much Cash can I get with a Payday loan? appeared first on LoanPig.

source https://www.loanpig.co.uk/how-much-cash-can-i-get-with-a-payday-loan/

Why a Credit Card is Riskier than a Payday Loan

Why a credit card is riskier than a payday loan

End-of-the-month anxiety is a serious concern for many people living in the UK. Sometimes, especially just after the festive season, bills mount up and cash-flow gets uncomfortably tight. It’s usually at this stage that people start considering their financial options. Instant payday loans in the UK are a popular option for those who need a short-term helping hand, but there are those who find credit cards to be a viable option. Is a credit card better than a payday loan? The simple answer is that credit cards are somewhat different to payday loans, and if you want to limit your risks, a payday loan is the right answer.

What’s so risky about a credit card?

What makes a credit card a riskier option is the potential to unwittingly get yourself into excess debt. It’s important to note that interest is added to a credit card balance on a monthly basis. This means that your outstanding balance will keep increasing. When paying the minimum amount due, a certain amount of the installment will simply go towards paying off the interest amount added. In essence, you are paying money that will never reflect on the actual outstanding credit balance.

In the UK, payday loans have limits that ensure a lender never repays more than double the loaned amount. Unfortunately, nowadays there are no limits to credit card costs. This means that your credit card balance can keep gathering interest and the cost of any purchases along the way. In some instances, this can keep growing to the point of your credit limit being reached or even exceeded. Miss a few payments and you could find yourself in serious debt.

The temptation of a line of credit

Payday loans are designed to be short-term solutions to money difficulties. They are paid off quickly. A credit card is far riskier as it provides a consumer with a constant line of credit. In some instances, credit card companies automatically raise credit limits, which means that you could find yourself getting into more and more debt, just because you have the card on you and a credit amount available to you. The temptation to use it could get you trapped into a lifetime of debt repayments.

Scary stats on how credit cards affect UK citizens

Credit cards provide access to money that can be used over and over for years. A payday loan term ends after a few weeks or months. When you apply for a payday loan, you are approved for a certain amount that must be paid off in full before the next amount or a new loan can be requested.

The Financial Conduct Authority released shocking stats regarding credit card debt UK-wide. These include the following:

* In 2016, the UK consumer market of 30 million people was paying off £61 billion on credit cards.
* 19% of these cardholders were experiencing money problems as a result of poor credit management.

These statistics alone show just how dangerous a credit card can be.

Last word

If you want to save yourself the potential long term financial implications of credit, opt for payday loans. It’s a quick, easy, and no-strings-attached helping hand through the slightly tougher times of the month or year. Need more advice on payday loans? Contact us today!

The post Why a Credit Card is Riskier than a Payday Loan appeared first on LoanPig.

source https://www.loanpig.co.uk/why-a-credit-card-is-riskier-than-a-payday-loan/

Top benefits of Short Term loans

Top benefits of Short Term loans

Short Term loans are an excellent way to raise cash in a hurry. If you need to sort out any kind of financial crisis, a short term or instalment loan can be one of the best solutions, and they are even available to consumers with bad credit records.

LoanPig are specialists at providing the short term loans people need in a hurry, so if you’ve never thought about the advantages of a short term loan before, check out three top benefits of our service below.

Some of the top benefits include:

1. Speed of arrangement

As already noted, short term loans can be a brilliant way to access quick cash. If you’re desperate for cash towards the end of the week or month, one speedy application can solve all your financial problems. You can complete an application online and very often you’ll benefit from virtually instant approvals (subject to affordability checks and specific lending criteria designed to assist you but also protect you).

There’s no hanging around waiting for loan officers to make decisions when you apply for a loan. What’s more, the application forms are easy to complete, and this means you can benefit from funds in your bank within just a couple of hours.

2. Short Term Loans are convenient

If you don’t want the hassle of heading to your bank to complete a loan form, then you’ll truly appreciate the convenience of short term loans. You can fill in your online loan application from any place that has internet access, meaning you can apply from work, while out and about shopping or from the comfort of your own home. And, your cash could be transferred to your bank account within a short time of approval being granted.

3. Spend your loan on anything you want

And, finally, a short term loan gives you cash directly to your bank account. This means you can spend the money on anything you desire and are not confined to specifics, such as home improvements or a car purchase, but as you are aware, short term loans are not designed for borrowing over long periods, they are designed to be a quick fix to get you out of an emergency or pay for something you want or need, as a one off.

For example, if you apply for a credit card you will find that it costs you money to withdraw cash using your card and also for other services. With a short term loan, you’re not at all limited in the way you choose to spend your funds.

Get in touch today to find out more about our loans.

The post Top benefits of Short Term loans appeared first on LoanPig.

source https://www.loanpig.co.uk/benefits-of-short-term-loans/

How to save money on food this January

Top money saving tips for 2019 from LoanPig.

January always seems like such a long month! Particularly as many of us get paid early before Christmas – which is great at the time but means that things start getting very tight just about now.

One of the essential expenses we face is food shopping. When things are tight we can cut back on most other things but we do still need to eat.

So how can we save money on food bills? Let’s look at six steps that can help. Things that we can start doing right now to get us through the rest of this month, and can also then continue doing to get into better habits and keep saving money.

1. Set a budget and stick to it

In our recent article How to Sort Out Your Finances in 2019 we looked at the importance of budgeting. And food shopping is one of the areas where it is so easy to overspend. If you keep a record of what you spend on food each month you are likely to be surprised and even horrified: it is likely to be far more than you estimate.

For the rest of January it can help to work on a cash basis. Put the cash aside and only spend that on food. You will need to be creative about what to buy (see Tip 2) but it really brings home what you are spending when you pay in cash rather than on a card.

Longer term it can be effective to cut down your spending slightly month by month. So you need an accurate record of what you are spending, then each month aim to reduce that by a certain amount of money. This will mean you making small changes in various ways but if you do this on a gradual basis it should not be too noticeable. Follow some of the tips below for how to do this.

2. Plan your food shopping before you go

It can seem very time consuming to plan meals but it is an excellent way to save money so is well worth doing. If you don’t plan you are likely to buy whatever catches your eye and will spend more than you intend to.

First of all check what you already have in your cupboards, fridge and freezer. So much food gets wasted by being left lying around then eventually being thrown away. So plan meals that use those ingredients so that you only need to buy additional ingredients to go with them. This will cut costs and also reduce waste. Make a list of exactly what you need and just buy the items on the list.

Also be flexible about what you buy. There is currently a lot of emphasis on eating less meat, and cutting out meat from some meals if you usually always eat it, is another effective way to save money.

3. Shop around

It can be tempting just to go to the same store you always do, but it can pay to shop around. So when you are planning your food shopping, have a quick browse around to see which store currently has offers that are relevant to you, and go there.

Also keep looking out for coupons and vouchers and make use of them if they fit in with what you would buy anyway.

It can also be useful to get to know the times of day that stores reduce their out of date stock. It is possible to pick up some really good bargains if you are able to go at the right time.

4. Buy and cook in bulk

Buying in bulk can save you money, but only if you do it wisely. If you either buy large quantities or go for supermarket “3 for 2” or “BOGOF” offers you can save money if you are genuinely going to use the items. But beware of being drawn into what seems to be a bargain if you are just going to end up throwing stuff away.

It can pay to shop with a friend and divide bulk-buy goods between you. Then you both benefit from bargain prices and nothing gets wasted.

It also saves money if you batch cook food. It is not much more effort to make extra quantities of meals such as casseroles, pies or lasagne. These can then be frozen for future use. Or another option is to swap meals with a friend.

5. Waste nothing

It is predicted that the amount of food that is wasted each year will rise by a third by 2030, when 2.1 billion tonnes will either be lost or thrown away. This is the equivalent of 66 tonnes per second!

So for all kinds of reasons it makes sense to try and really cut down on the amount of food we are wasting.

One way we can do this is to cut down portion sizes. Just think of the amount of food that gets left on plates. Much better to serve smaller portions – and then people can have seconds if they would like more. If there are leftovers from any meal, they can either be put in the fridge and used for lunches or as part of other dishes, or frozen in one portion sizes for a quick meal.

6. Drink wisely

Yes we know it’s Dry January but generally we all drink too much and need to cut down. This might not even be alcohol – many of us are addicted to either fizzy drinks or juices. All these drinks cost money.

So to save money- and also for health reasons – try just drinking water with meals some days of the week. You will feel a lot better for it and will have a lot more change in your pocket!

At LoanPig we hope that these help you to balance your budget whilst still eating well. Check back here soon for more money saving tips from LoanPig.

The post How to save money on food this January appeared first on LoanPig.

source https://www.loanpig.co.uk/how-to-save-money-on-food-this-january/

How to Sort out your Finances in 2019

Christmas is now over and many of us are now beginning to realise that, despite our good intentions, we spent far too much money.

But if you are counting the cost of Christmas,  you are not the only one! Recent research from investment company Hargreaves Lansdown indicated that the average person in the UK spends £538 on Christmas and overspends by £153. Given that these figures are average, it means that many of us are facing an even bigger overspend.

If you are in this situation you will at the very least be feeling annoyed with yourself. Perhaps you are even panicking about how you are going to manage financially to get to the end of January – which always seems to be a very long month!

So how can you change all this? What can you do differently in 2019 to ensure that you do not end up in this situation yet again?Why not try our Six Steps to Solvency?

1. Take a good look at your finances

It can feel very uncomfortable to start looking closely at our finances. But it is really important to do this so that you can understand where you are at and where your money is going.

The best way to do this is to make a list of everything to do with your money. This should include:

• Assets you own (eg home, car, savings)
• Debts you owe (eg mortgage, loans, credit cards, overdrafts)
• Regular income (eg salary/wages, benefits)
• Regular payments (eg mortgage/rent, loan and credit card repayments, household bills).

This should begin to help you see how healthy your finances are looking.

2. Pay off bad debt

The best way to start sorting out your finances is to pay off bad debt. Our recent article The Difference Between Good and Bad Debt explained that a mortgage is generally viewed as good – or acceptable – debt because you are using it to invest in an asset ie your home. However unsecured debts such as credit cards are bad because they can get out of control very quickly. This leads to more interest being added to the balance and you can end up just paying off the interest each month and not reducing your debt at all.

So one of the key things to do when getting your finances under control is to pay off as much bad debt as you can. Even if this means dipping into any savings that you have, it could be well worth it. Once you no longer have monthly credit card repayments to make, it will release that money for other things.

3. Start budgeting

There is something about the very word “budget” that makes most of us want to run a mile! But the reality is that unless you plan your regular spending carefully, and know where your money is going, it is easy to slide into debt without any idea why.

So, building on your work from Step 1, make a list of all the money you spend each month. Not just your mortgage/rent and household bills etc but also your spending on everything else, including food, clothes, transport, entertainment, leisure etc. Include absolutely everything.

This should give you a good idea of how you think you are spending your money but you then need to keep careful records for at least a couple of months of where every penny is actually going. Use either a notebook or a phone app but keep track of everything.

You may well be surprised – or even horrified – to find out that you are spending a lot more in some categories than you ever realised. But once you know, you are then in a position to start making changes to get yourself in a better position.

4. Balance the books

After you have tracked your budget for a couple of months it should become clear whether or not you have enough money coming in each month to cover all your expenditure. If so, you are in a healthy financial position. Be careful with your spending, pay off any remaining bad debt as soon as you can, then start to save (see Step 5 below).

But if your budget shows a shortfall – ie you have less money coming in than is currently going out – then you need to take action quickly. The first thing to do is to check every bill to see if really is essential and, if so, whether you can get a better deal – for example by switching suppliers. Then look at every other item of expenditure and see where you can cut down. This may mean adjusting your lifestyle for a little while – for example not going out as much – but it will be worth it to get yourself sorted.

Also look at ways of bringing in extra income, for example changing jobs, taking on extra work, selling items or taking in a lodger. There are various ways of doing this and they may not all be easy but will help you to get your finances back on track.

Another option to consider is to take out a small loan to pay off all your existing debts so that you end up with just one affordable monthly repayment instead of several different ones. If you do this, it is really important not to increase the overall amount of your debt, but see this as a last chance to pay off old debt and make a fresh start towards a debt-free future.

5. Keep at it!

Last but not least, be aware that to keep your finances in good shape is a long term commitment. The above steps will help you to start tackling problems and getting things back on an even keel, but you need to keep at it and not let things slide. So see them not as a one-off quick fix but as the start of a new lease of life for your finances. Keep working away at it and you will reap the benefits long-term.

At LoanPig we wish you the very best for 2019 and hope that this is the year when you do manage to begin sorting out your finances once and for all!

The post How to Sort out your Finances in 2019 appeared first on LoanPig.

source https://www.loanpig.co.uk/how-to-sort-out-your-finances-in-2019/