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.
WHEN IS THE BEST TIME TO START A PENSION?
NOW!
We’ve just been told that we need to change to internet banking to keep being paid interest on our current account.
I’m concerned about the safety of this.
I get numerous scam e-mails re bank accounts I don’t have, so am unsure how I would be able to trust that any emails came from my bank.
That’s a cheek! if I were you I would simply switch your bank account and tell your bank that you are doing it and why. If you have been a loyal customer for years then they should reward that not penalise you. Thankfully it’s much, much easier and safer to switch now and there are some really good current account deals on the market. Take a look here https://www.lovemoney.com/currentaccounts/?site=MoneyMagpie&source=1004201 – you don’t even need to get rid of the account you have right now, just open another one somewhere else. Other than that, though, if you do move to online… Read more »
As my husband is self-employed we don’t qualify for any benefits but he can go weeks between jobs. Is there any help we can get?
Lynne I asked Lee Healey of IncomeMax about this as he is a specialist in benefits. This is what he said: “Talk to a specialist benefits adviser. They will be able to analyse your situation and can help you understand the rules and responsibilities around benefits like Jobseeker’s Allowance, tax credits and other benefits. Being self-employed doesn’t automatically mean you can’t get benefits or financial support – but self-employed earnings, benefit conditions and things like the tax credits working hours rules can can cause confusion and conflicting advice from government departments. The government are also introducing Universal Credit and have… Read more »
I haven’t started a pension at all. What is the best private pension to go for?
Personally, I think that the best sort of private pension to start off with is a Stakeholder pension. These can be set up by anyone (even a baby can have one, by the way) and they tend to be cheap and simple. You can see our article about Stakeholders here https://www.moneymagpie.com/article/step-by-step-guide-to-getting-a-stakeholder-pension. I recently helped a friend open up a Stakeholder pension for her son. We picked an Aviva one and then picked the funds that the money would go into. You can get a financial advisor to help you with this (make sure it’s one that you pay a fee… Read more »
What is the cheapest way to make regular transfers abroad? My daughter is studying in the USA and Lloyds bank takes a big fee when we move money from our UK account to her American one. She also gets charged to receive it, so we pay extra twice.
When making an international payment the remitting bank ‘charges’ in two ways. The first is via the transfer fee, which you mention, and often comes in as high as £20 per transfer – potentially a high % of the total money being sent overseas! The second is through the exchange rate. The bank will make money from where it can buy its currency and where it sells it to you the customer. If you are fed up with your bank you should consider using a specialist currency broker. They should be able to secure you a more competitive rate of… Read more »
How can I save savings. Most of our money goes on rent?
It sounds like you need to get a cheaper place to rent.
Either that or see if you can share the home (and rent) with someone else.
Spend some time looking at ads to see if you can find a cheaper place that is still good (it’s quite possible that somewhere really good is out there for you).
If you can’t find somewhere, it may be that you can get your rent reduced. If you think your rent is too high and your landlord refuses to budge, you can go to a rent tribunal. Here’s the information on that https://www.gov.uk/housing-tribunals/disputes-about-rent
i have not worked for a while and dont claim anything from anywhere my husband looks after both of us , i am worried i havent paid enough national insurance and am wondering where that will leave me in the future regarding pensions
The best thing to do is to check your situation with the DWP. If you go to Gov.uk and look into their section on pensions you should be able to check to see how many years of NI you have paid. In order to get the full State Pension you can pay for some extra years – up to 6 years – so you may find that this is good for you. You will need to have paid for 30 years of NI to get a full State Pension. Also, though, if you have taken years off work to care… Read more »
I just got a better job, meaning more hours and also an increase in pay, i have very little outgoings and it is just myself (its about an extra £1000 each month) what would be best to do / spend with them money?
If you can do it, I suggest you ignore the pay rise, as far as your day to day spending goes, and pretend to yourself that you’re still on the same wage as before. Then, with the extra cash that you don’t use, put it ALL into ilnvestments for your future. Split it between a pension and a stocks and shares ISA. Put that money into those investments every month (set up standing orders at the start of the month just after you get your pay) and you will be amazed how much it will grow in just a few… Read more »
How Do You See Digitial Currency In The Future ?
Is Bitcoin And Such A Worthy Investment ?
Thank-You
I think Bitcoin – and the like – is the money of the future.
Bitcoin has revolutionised payments and it has already changed the way many people think about currency and how to pay for things.
I think that the technology behind Bitcoin is probably the thing that one should invest in rather than Bitcoin itself. Bitcoin may not last but the technology will and it will be developed and refined to the point where it will be THE technology to run things.
It’s an exciting time and I’m definitely going to be watching that space!
Hi I have quite a large garden (not huge but too much for me to cope with) is it legal to let this out as an allotment and are there anywhere I can get advise on this please.
Yes you certainly can hire it out, in fact we have an article all about it here https://www.moneymagpie.com/article/hiring-out-your-garden-as-allotments
It’s worth taking a look at that article as it shows you how to go about it, where you can advertise your garden and it will point you to some sites where you can download contracts.
You should be able to make some cash out of it and also get some nice fruit and veg along the way!