Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
8 Money Questions You Should Know the Answers To
Reading Time: 6 minutesAt MoneyMagpie, we’re always receiving loads of money questions and queries from our readers! We love being able to help you out with all your finance-related worries. We’ve compiled a list of key money questions you should know the answers to. It covers things from dealing with debt to investing in the stock market. We’ve got you covered with a range of tips and starting points to help you become more financially stable.
Here’s the 8 money questions to ask yourself!
- Do I Spend More Than I Earn?
- What is My Credit Card Balance?
- How Much Debt Do I Have?
- Am I Paying More For Anything Than I Need to Be?
- What Happens to a Mortgage If You Split?
- Should I be Investing on the Stock Market?
- Is Paying for a Warranty Worth It?
- More Money Questions
Am I Financially Prepared for an Emergency?
If 2023 has taught us anything it’s the importance of being prepared for an emergency! It’s hard to know exactly what you will need until the time comes, but 3 – 6 months of necessary spending is a good guide. You need the money to be in an easily accessible savings account, ready for when you need it.
However, it’s a fine line between having enough and putting too much in there. Interest rates on savings accounts are shockingly low at the moment. In fact, interest rates are lower than the rate of inflation, so if you over-inflate your emergency fund, your money will slowly be losing value instead.
As well as having an emergency fund, do you have an asset you could borrow against if you had to? It’s not always as an ideal solution, but it can save you from the larger cost of getting a personal loan or using high-interest credit cards.
Do I Spend More Than I Earn?
You may think you don’t, but there are a shocking number of Brits who regularly spend more than they earn. According to research by the Office for National Statistics, on average each UK household spent £900 more than they received in income in 2017 alone. The problem for many people is that they’re simply unaware of how much they’re spending!
Due to cards and contactless, it is so easy to lose track of how much you’ve spent. The best way is to create a regular habit of checking your bank statements and monitoring where your money goes. Take some time to sit down with your accounts and face reality. How much do you actually earn? Once all your living costs have been taken out, how much do you have left? Create a budget and stick to it! Your finances dictate the lifestyle you can afford to have, not the other way around.
what is My credit card balance? (and what are the interest rates on it?)
Credit cards are great when they’re used properly, but they have made it far too easy for us to overspend without a second thought! Only purchase something on a credit card if you know you’ll have the funds at the end of the month to pay it off. However, life sometimes does throw surprises our way. There may be a month when, for some reason, you might not be able to pay the balance off in full. In preparation for this, make sure you’re aware of your credit card interest rates, how much it’ll cost you, and always use the card with the lowest APR if you might not be able to pay the full sum.
Remember to monitor you balance carefully to make sure you’re staying on top of payments. Find out more on how to use credit cards to build your credit score here.
how much debt do I have? And How to Pay It Off
Debt can be overwhelming and if you don’t stay on top of it it can easily spiral. When asked, a lot of people tend to underestimate how much debt they really have by 25%. UK citizens actually owed £1.6 billion in debt at the end of January 2020. While the average debt total (including mortgages) per adult was £31,845, higher than the average annual income.
Prioritise your debts by paying off the ones with the highest interest rates first, or think about applying for a debt consolidation loan. Check out our article How to Stop Debt Overwhelming You for more information, and see what MoneyMagpie founder, Jasmine, has to say about paying off debt below:
Am I Paying More For Anything Than I Need to Be?
Recurring expenses are something that we don’t think about often. They just come out of our account automatically without us ever paying much real attention to them. Meaning plenty of us are left paying for products and subscriptions long after we still need them, simply because we forget to cancel.
Go through your accounts carefully and question every expense. If you’re not using something anymore, or not using it enough – cancel! You’ll obviously still have things you’ll need to continue paying for, like insurance. But it’s always worth negotiating with your provider to try and get a better deal. Never simply auto renew a policy – you can almost always get it cheaper.
What Happens to a Mortgage If You Split?
Sadly, many people who do get mortgages together, whether friends or partners, do end up going separate ways. Knowing your options in advance can help you to prepare for the worst case scenario, as managing a mortgage in a break up is no small feat.
The key thing to remember is you’re both liable for all repayments. A mortgage provider doesn’t care about your personal life, so just because your partner is no longer paying their share it doesn’t mean they’ll let you only pay half. If you fall behind on repayments it will negatively impact both your credit scores.
The options you have are:
- Sell the house – Pay off whatever remains of your mortgage and split the rest of the money. If you’re in negative equity (when the value of your house falls below your mortgage balance), then you’ll have to divide the outstanding debt between you.
- Buy the other partner out – If you can afford to, one of you could buy out the other. However, you will have to prove to your lender that you can afford to continue the repayments on your own.
- Keep a stake in the property – Buying a proportion of your partner’s stake is an option if you can’t afford to buy their whole share. This way, one of you would own most of the property but the other could keep a stake in the home. They’d also be entitled to a percentage of the value if the house is sold at a later date.
Find out more about how to handle this situation in the video below:
Check out How to Prepare for a Post-Lockdown Divorce for more details, too.
Should I be Investing on the Stock Market?
This is one of the money questions we hear a lot, and the simple answer is yes. Everyone who can afford to do so should be investing – even if it’s just £10 a month. Really, investing is the best way to save for the long term. Interest rates on savings accounts are shockingly low so investing is the only real way to see a return on your money.
To a beginner, the stock market can seem overwhelming and rather daunting. How do you get started, or even know what to do? Read 7 Investment Tips for Stock Market Beginners for all the help you’ll need on making the first step.
Is Paying for a Warranty Worth it?
You’ve bought something nice and new and you want to protect it – that’s completely fair. The trouble is, a lot of warranties don’t actually give you that much for your money. In some cases you might get a couple of extra years, but we’ve found cases where an extended warranty cost over half the price of the product itself. And you may never end up using the warranty!
Instead, if you have contents insurance, check whether your items will be covered on that policy. What’s the excess? It’s often cheaper than the cost of a warranty. It’s always worthwhile checking as there’s no point paying to cover the same thing twice.
Also, if you are considering paying extra for a warranty check with the manufacturer and retailer first. Many manufacturers guarantee their products for a minimum of 12 months, with some up to 2 or 3 years and plenty of retailers often have their own guarantees as well.
Jasmine tells you what she thinks about paying for warranties in the video below.
Read Your Rights with Guarantees and Warranties – What You Need to Know for more advice.
More Money Questions
If you have even more money questions, why not head over to our messageboards where you can ask away and also find plenty of help from fellow readers.
Or check out one of our detailed articles answering different questions below:
- Do You Need Income Protection Insurance?
- Should You Invest in Penny Shares?
- Should I Save or Pay Off Debt? How to Decide
- Are Consolidation Loans Worth It?
*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.
that is right
I want to start putting some money away for my daughters future but I dont quite know where to put it for the best financial gain for her
Good question, and one that a lot of people want to know the answer to (a couple of people have asked this here as well). These are my thoughts: Personally I think it’s best to split the money you invest for your children’s future into long-term and very long-term investments. Firstly I suggest you put some money each year into a pension for your child. Yes, it sounds weird but you can now set up a pension for your child as soon as it’s born! See our article here about pensions for babies https://www.moneymagpie.com/article/pensions-for-babies. Essentially you (and other members of… Read more »
Hi, I’m on 4% Apr for my mortgage can I reduce that some how?
Yes it’s quite possible that you can but there are a lot of variables: – Do you own at least 40% equity in your home? Inn other words, are you looking for a big mortgage relative to the value of your home or a small one? The smaller the ‘Loan to Value’ (LTV) that you are looking for, the cheaper the mortgage, on the whole. – are you happy getting a fixed deal? The shorter fixed deals are cheaper but it’s quite possible that a longer fixed deal – 5 or even 10 years – would be better value in… Read more »
how do i cut back on bills?
How can I increase my income. Single mum working part time no extra hours available at work and childcare costs means it needs to be something from home
Check out these ideas for a start 1) Think about making money through your computer. We have Seven ways to Make Money Onlne here so check that out. It has lots of ways you can make cash in your spare time. 2) Do you have office skills? Perhaps you could be a Virtual Assistant. Find out here how to do it https://www.moneymagpie.com/article/make-25-an-hour-as-a-virtual-assistant 3) What skills do you have? Baking – make cakes and sell them at markets or online. Can you teach the skills you have? Can you be a tutor? Do you like animals – you could be a… Read more »
Is there any way my parents can structure their will to reduce capital gains tax burden
Good question and I suggest you speak to a good tax accountant about this. However, I have spoken to Louise Oliver, Financial Planner, and she says, “As the rules changed a few years ago allowing for the transfer of the nil rate band post death between spouses the need for a first death will trust to capture this has gone. A couple,under current rules, has 325k each to leave free of Inheritance Tax (IHT). There is no IHT between man and wife so IHT usually comes in on second death. Leaving monies to a registered charity in a will can… Read more »
What’s the best way to avoid getting into debt
I have two held pensions from previous employment. Is it best to just leave them as they are or transfer to my current employment pension. Or maybe something else may be more profitable? thanks.
Judith this is an important issue so I have asked Andy James of Towry to give you some pointers. He says: “You should check what costs are being charged on your existing pensions, and what investment options they have if they are money purchase arrangements. Ideally, you would be best to invest where costs are lowest, as long as you can find the right type of investment for your risk tolerances and timescales. If your older pensions are being charged at higher rates, it may well be sensible to move to your current plan, if the plan is willing to… Read more »
After bankruptcy what banks or building societies will take you on as a customer and what safeguards are put on your account.
It’s now much easier to get a bank account once you’ve been made bankrupt. This is what Marc Cowley of Christians Against Poverty says: “The short answer here is that different companies have different policies on this matter. Once a person becomes bankrupt, it is essentially at the discretion of their bank or building society as to whether they will continue to offer an account to them. Unfortunately some banks do seem to have an automatic policy of closing accounts, and it is very likely that any bank account that is in debt (e.g. overdraft) would be closed by the… Read more »
Does swapping credit cards (to take advantage of 0% APR Etc) affect your credit score in the long run?
If you do it every six weeks or so and do it a few times then it will affect your credit score.
But if you’re doing it once every 6-9 months just to swap your debt around after the end of the0% period then it wouldn’t. It’s only when people are applying for credit very regularly that the warning bells go off!