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.
How do I teach people the difference between being careful not to waste money and just being tight. It’s good to not waste money but would never want to be tight with my cash.
I know what you mean and it’s a very good point. I’ve thought about this for a while and I think that really it’s all about our attitude to life and to other people. If we have a generous, giving approach to life then we will naturally give – whether that’s in terms of money or our time or our kindness or generally ourselves. That way, even if we don’t have the money to give – or it doesn’t seem wise to give it – we will find other ways to help people. That attitude, combined with an attempt to… Read more »
What is the best ethical current bank account for someone on a very low income?
I think you’re best off going for a Credit Union. Take a look at Abcul.co.uk to find your nearest Credit Union – they are great because they offer proper accounts, help with budgeting and even offer small loans at a decent rate. Go for it!
What is the best way for over 40s first time buyers to get a foot on the property ladder?
Really it’s no different for you than it is for others. Mortgage companies are allowing people to have mortgages beyond 65, but, if you can afford it, you could also go for a mortgage that only lasts 20 years or 15 years. Otherwise it’s a question of: 1) Having at least a 5% deposit (10% is better of course) 2) Being able to show a decent income, either from one or both of you 3) Showing that you are well able to afford the repayments because your outgoings are much below your income. Also, speak to our free, award-winning mortgage… Read more »
How can i improve my credit rating?
Hi Darren Someone else (see above) asked this and this is what I said: There are quite a lot of things you can do as you can see in our article here https://www.moneymagpie.com/article/how-to-clean-up-you-credit-record on how to clean up your credit record. It includes things like: – making sure you’re on the electoral roll – making sure that you pay all your bills on time every month for at least six months (that’s a particularly good one). – getting an expensive credit card that helps you build your credit – see the selection here https://www.lovemoney.com/creditcards/?site=MoneyMagpie&source=1004201#/ – checking your credit report and… Read more »
all useful advice
there is no such thing as a stupid questions, only stupid peple who dnt read the answers
Thanks!
Is there anything you can do to help offset / raise a partner’s bad credit rating? When looking at renting everywhere wanted to know both, though the rent would only be in one name…
Good question and this affects a lot of people. So I have checked with contacts at Experian and this is what they say: “As a couple, your credit reports will only become linked if you take out a credit agreement together such as a joint account. If you have no shared accounts, your partner will not impact on your personal credit score. Understanding how to manage credit services well is the key to getting the best credit score and so if your partner wants to improve his credit rating he will first need to understand where he has gone wrong… Read more »
I’m a carer for my dad. Is there any way I can make money working from home.
Yes there are lots of ways. 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 dog-walker… Read more »
How much should I reasonably expect my daughter to contribute to her upkeep at uni from her part-time job?
Ooh that’s a tricky one Jane! It depends on quite a few factors: how much she’s making, how much you’ve got, what her costs are etc. I have asked financial planner (and mother!) Louise Oliver of http://www.piercefieldoliver.com/ what she think and she says: “obviously students are limited to the hours they are able to work as they need to make time to study. Also any job is likely to be minimum wage. My experience is that any earnings go towards food and travel which helps to fund the overall costs. So not a specific amount as this depends on wages.… Read more »
At what age should I consider creating a Lasting Power of Attorney bearing in mind it is for “life”
This is an important question, Bob. I have asked Pippa Gee, who runs Philippa Gee Wealth Management (http://philippagee.co.uk/) and she says this: “A good question and while I am not a solicitor and any such queries are bast referred to a solicitor to get specific legal advice for your situation, I would say that it is never too early to get this document in place. While it is likely that a Power of Attorney may not be needed until you are older and facing health and care choices, you just don’t know what lies ahead. Having the documents in place… Read more »
I save every month for my grandchildren with a regular saver at a Building Society. Is there a better way to save for their future?
Hi Barbara, yes I think that for your grandchildren, who have a lot of time for their money to grow, you would be better off putting it into stocks and shares or a pension for them. If you look here https://www.moneymagpie.com/article/pensions-for-babies you will see how you and their parents can put money into a pension for them which will grow to a really decent size by the time they retire. It’s also a good tax-saving (for them) way of giving them money. Also, I would put money into a Junior ISA for them, but do it in a stocks and… Read more »