Category: Tips

How to Protect Yourself from Tax Rises

It is never that easy to predict when taxes might go up. Despite what politicians might say there could be a chance that taxes will rise. This could be income tax, but we also pay other taxes such as VAT on the goods we buy, duty on certain products we buy such as petrol and alcohol as well as taxes added on to things we buy like insurance. If taxes do rise, then we can really notice it as the things we buy will be more expensive or the amount we earn will go down or both will happen. It can therefore be wise to be prepared just in case this does happen.

Have some savings

Having some savings behind us can be really useful for all sorts of situations and this is one of them. If we have some money there, it will mean that we can afford things more easily. So, if we get into the situation where we find that we run out of money, then we will have some savings to fall back on rather than getting a loan. Although a loan can also be a solution, loans are not available to everyone, particularly those with a poor credit record.

It can be tricky to build up some savings, particularly if you find it hard to manage to buy everything you want on the money that you have. However, even just saving a small amount of money will help as long as you try to save it regularly.

Although, having a lump sum of money will only help in a limited way. If you regularly dip into it, once taxes get too high for you to be able to cope with, the money will eventually run out. In this case you will need an alternative plan.

Spend less

By spending less money you will be able to have more available to pay the tax. This can be tricky though. It can be a good idea to split up the items that you are buying into ones that are necessary to buy and ones that are not. Once you do this, you will be able to more clearly see where you might be able to reduce your spending. While you may not want to cut your spending right down, it might highlight areas where you are spending money that you did not really realise. You will also be able to compare prices on everything that you buy and that will enable you to make sure that you are not spending more than necessary. It can be good to start by doing this with the things that you pay the most for as if you can reduce the cost significantly then this will make a bigger difference to how much money you save. You may want to just try to buy the same things but find cheaper alternatives or buy less things. This is a personal decision which will also be determined by whether you are prepared to go without certain things or not.

Earn more

If you do not want to cut down or find that cutting down is too hard, then the only other option you will have is to earn more. This might sound impossible but it is possible that there are things that you could try which might work for you. You might find, for example, that you could ask for a pay rise and be offered one. You might be able to pick up some extra work that would help. Otherwise you might be able to find some online work that you could do which will earn you a bit extra. Some people even start up a part-time business to bring in more money. You might even be able to make money by renting out a room in your house or your driveway. There are plenty of options and you will need to take a look at which might suit you the best. There are many money making websites which will have lots of ideas about how you might be able to earn more money and so it can be worth looking at these to get lots of ideas and hopefully you will be able to find some that will suit you and will allow you to be able to start earning more money and managing your costs more easily or being able to save some money.

So, although you cannot prevent tax rises or prevent paying that extra money, if you know what to do, you will not have to struggle for money. It can be great knowing that you have a plan that will enable you to manage in this situation and that you will not have to get a loan to make ends meet, as while loans can be very positive, if you have to borrow just to afford to live, it is doubtful you will be able to afford to repay it.

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How to Save up for your Dream House

Many of us would love to own our own home and we might even have a specific idea as to what our dream house would be like. It can be possible to save up to buy a home, but it is worth understanding what home will be best for you as well as what you need to do in order to be able to afford it.

What is your dream house?

It is good to think carefully about what you would like your dream house to be like. Many of us might be thinking of something which is far more expensive than we can realistically afford. It may still be possible to afford something like this, but it could also be worth thinking hard about whether this really is the home you want. For example, many of us might like a big house, but it will be hard to clean and we may not even use much of it. We might like something old, but it will be more likely to need expensive repairs or we might like the idea of a big garden but it will take a lot of work to keep it looking good.

It is really well worth thinking about what it is about your dream home that you really like and consider whether you can find that it any home or just a specific one. It could be something that you could add on to a standard home, for example or something that may turn out to be not quite as good as you had hoped, once you have it. So make sure that you are realistic and think carefully about what you really want from your home.

How can you afford a home?

Once you have got your thoughts organised with regards to what sort of home you want, you will then need to find the money to pay for it. Most people will get a mortgage to pay for their home and if you fulfil certain criteria you will be accepted. You will need to:

  • Be old enough
  • Have a regular income that is high enough to afford the repayments
  • Not have too many expenses.
  • Have a suitable deposit

The deposit can tend to be the thing which worries many people. They will be happy to find the monthly mortgage payments, but finding a lump sum of money to put down can be a big worry for them. However, building up a really big deposit can be the best way to keep how much you borrow to a minimum or to help you afford the home that you really want.

If you have enough money to pay a mortgage repayment each month then you can start by putting that amount of money in a savings account each month. You will have to manage without this once you get the mortgage so you should get used to it right away. You may need to make some changes to how much you are spending or even to how much you earn to be able to afford this. Making changes is sensible though, as if you can earn more and spend less it will mean that you will be able to put even more in the savings account and save up what you need even more quickly.

There are other things you will be able to try as well. Firstly, look at your savings and see how much you have as these can be used towards the deposit. If you have investments then you may wish to consider selling these to help out. You may also have things that you own and no longer need that you could sell to generate extra money as well. These things could help a lot, but if you want to gather a deposit really quickly then you may have to change your behaviour even more drastically. You might have to work more hours or get a second job to increase your income and spend only the bear minimum on things that you need rather than buying luxury items. You will be best to do a review of your earnings and spending and come up with a plan so that it is easier to change your behaviour and make sure that you are doing the best that you can. It can feel difficult at times, but it is important to have your goal in mind so that you make sure that you are able to keep focussed and remember why you are doing this. The more quickly you can get the money you need up together, the more quickly you will be able to buy the home of your dreams and that should help to motivate you as well. For most people this will not be easy, but it will be worth it.

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