A British Man's Take on Debt, Saving & Investing

Venezuela: When An Emergency Fund Isn’t Enough

Posted on May 18, 2016 by Lee

Even the most news-averse amongst us cannot help but notice the dark times ordinary Venezuelan people are currently going through. Those of us within the relatively financially cheerful Western world don’t quite understand the plight of other human beings who simply live in another part of the world.


But what exactly is the problem, and why am I writing about it on a personal finance blog?


The point was driven home by a couple of news articles recently that it really ultimately doesn’t matter how prepared you are to weather financial storms with emergency funds, if the country falls apart around you in spite of your 1-6 months of expenses sitting in your bank account. When your currency is worth less than the paper it is printed on, or the inflation rate so sky-high that the 30% pay rise you got in the morning means you still can’t afford a loaf of bread by the time you finish work in the afternoon (assuming you can find one in the first place), really what can you do?


Venezuelan people, particularly in the poorer regions, are literally starving. They cannot get medicine, and they wait in lines from 3-4am until late into the evening, just trying to get enough staples to keep themselves fed sufficiently so that they have enough energy to get up and do it all over again in a few days time.


It isn’t just Venezuela, either. Although this is an extreme example, Greece was and still is going through much the same thing. And Greece is much, much closer to home.


The Food Has Run Out!

The conventional wisdom of an emergency fund still holds true. It will get you out of any number of bad events, or protect your house and your family while you get a new job. But take what is happening in Greece, in Venezuela, and in any of a dozen other countries right now. Then what? It is not outside the realms of possibility for what is happening to them, to happen to us. Your normalcy bias may scoff at the mere suggestion, but really what is so different to us than them? Venezuela has more oil than Saudi Arabia. Greece had a bigger tourism trade than most of the United Kingdom put together. Two very prosperous nations that lost their way through very little fault of the people on the ground.


Take the emergency fund idea one step further, and it may allow you to do what many are now having to do by necessity. The governments are saying ‘you must grow your own food’. ‘We can no longer guarantee you will see food in the supermarkets’.


Just stop, for a moment, and imagine if David Cameron appeared on television after many many months of falling food availability in our supermarkets, and saying “we give up. You are on your own”. After the initial riots and looting die down, then what? How much food do you have in your cupboards? In your freezer? In your fridge? If you’re really lucky, it might be enough to get your family through the next couple of weeks. Most people live day-by-day, popping in to their local supermarket on the way home from work. What they have in stock may be half a loaf of bread, 2 eggs, and a tin of baked beans.


Grow Your Own

Venezuelan people are trudging up mountains, on foot, to get enough fertile soil to be able to grow their own produce. There are no garden centres for them to be able to buy soil from any more. And even if there were, they couldn’t afford it anyway. There are no seeds to buy, and no herbicides to protect their crops. It is really, really hard. The lucky ones have been able to seed from items they’d already purchased (think tomatoes, potatoes, and so on), but everyone else is now scrabbling around in the dirt without even the slightest real clue how to do what their government is telling them that they must to survive. The problems they face are compounded by their need to eat now, but foods you grow take several months to be edible or ripe or at a size worth harvesting.


Depending on which person you listen to, the chances of such an event happening here falls somewhere between “never ever” and “dead certainty”. I am of the mindset that you can never really say ‘never’, and the only dead certainties in life are death and taxes, so why not grow your own, now? How much of a hardship is it to plant an apple tree. Or two? Grow your own potatoes and tomatoes and carrots and herbs and anything else you fancy. All of them can be done in pots on balconies or patios if you lack a garden proper. At the very least throw a couple of bags of compost and some seeds in the shed.


If nothing happens, then you have something to eat with your meals that doesn’t get any fresher than picked or dug up or pulled an hour before dinner is served.


If disaster does strike, you already have an established garden from which to pull valuable calories and nutrition for you and your family.


It’s a Calorie Emergency Fund.

Car Finance: The Easy Road Ahead

Posted on October 07, 2015 by Lee

It’s estimated that there are currently 35 million cars on the road in the UK, with over £1.2 billion spent on acquiring them every year. Yet as crowded as our roads may be, cars are ultimately a necessity for many of us – whether it’s a get-me-to-work car, a family motor or a little run-around vehicle.

The obstacle to this, of course, is getting your hands on the capital to make this necessary investment. The prices of insurance alone can be inhibiting, and, coupled with maintenance costs, can make the ‘package deal’ of buying a car seem like a distant dream.

It need not be this way though. In the increasingly agile world of consumer credit, there is one particular avenue which is fast emerging as a viable and good-value source of car finance. Quite simply, the personal loans market has been taken by storm by peer-to-peer (P2P) lending platforms, which, by virtue of matching consumers who have extra money to lend directly with those in need of a loan, are able to offer highly competitive APRs and repayment plans.

Indeed, the culling of intermediaries from the interaction (as you would associate with the likes of banks and building societies) results in a highly streamlined process. Furthermore, with both the lending and borrowing processes taking place entirely online, there are minimal overheads for these peer-to-peer lenders to contend with, thus allowing them to pass the benefit on to the consumer.

Unsurprisingly, P2P platforms have therefore become major players in the market for car loans. A borrower is typically able to take out a personal loan of between £1,000 to £25,000, thus meaning that cars of just about any variety are as accessible and attainable as they ever have been. The flexibility doesn’t end there though. Some platforms such as Lending Works offer you the opportunity to make overpayments and early repayments at no extra cost.

Perhaps the greatest pull of these platforms though is the element of convenience. An online personalised loan quote can be attained within a couple of minutes, and, if the quoted APR is to your liking, the subsequent application process is even quicker. A decision on whether the loan has been approved and the final APR is then returned to you via email within one working day, and, should you decide to accept the terms, the funds arrive in your bank account overnight.

Such an innovative concept has lifted the bar in the personal loans sector, and, more importantly, has made things simpler for the customer. No longer are unsecured loans something to be sceptical of, and instead they are increasingly being characterised by sensible repayment plans and convenience.

It all leaves you in a good position, whereby you can shop around and find the most suitable loan for you. Certainly, with the power in your hands, it is prudent to do one’s homework, and ensure that there isn’t any fine print or potential pitfalls with the provider you choose.

However, if after weighing things up you decide that a peer-to-peer loan is the route you wish to go, you can afford yourself a smile knowing that you could be driving away in your new set of wheels just 48 hours later, safe in the knowledge that you are living within your means. It’s car finance that benefits the consumer – just the way it should be.


What are debt consolidation loans?

Posted on July 13, 2015 by Lee

Juggling multiple debts can be tiring and stressful. Credit cards, household bills and overdraft and loan repayments all mount up, and it can be hard to keep on top of it all. If you are struggling to pay back a number of different forms of credit, it is relatively simple to consolidate debts with a debt consolidation loan. Although taking out yet another loan can seem counter-intuitive, if you use it sensibly, it will help you to get on top of your debt problem and to feel in control of your life and spending once again.


What Is a Debt Consolidation Loan?

A consolidation loan is a large loan that is used solely to pay back a number of smaller loans. As a result, you only have to pay back one large debt on a monthly basis rather than several smaller ones. The advantage of this is that it is much simpler to cope with and, significantly, it can often save you money. Credit cards, store cards and unauthorized overdrafts usually come with relatively high rates of interest. In contrast, lower interest rates are often available on larger loans and at fixed rates. By borrowing a larger amount at a lower interest rate to pay off all your smaller debts, you consolidate those smaller, more costly debts into one larger and, more often than not, cheaper debt – this is a debt consolidation loan.


What Are the Advantages?

If you are overwhelmed by debt and finding it difficult to remember who to pay back and when, the most obvious advantage of a consolidation loan is that life becomes much simpler. You are effectively putting all your debts in one basket, which means that you only have to make one regular fixed payment each month rather than several different payments, often at variable rates of interests.


Budgeting becomes much easier because you know exactly how much you have to pay back each month and, therefore, exactly how much money you have left over to spend on other essentials. Perhaps the biggest advantage of all is that you may find that you are paying back less than you were before you took out the consolidation loan. Your single payment may be less than the sum total of all your previous smaller debts because you are paying a lower interest rate. A final advantage is that a consolidation loan can help you to improve your credit rating. If you have fallen behind with loan repayments, your credit rating will have suffered. A consolidation loan can help you to prove to creditors and potential lenders that you are a reliable and trustworthy borrower. The way to do this is to make sure you make each monthly payment on time and do not take out any other forms of credit until you have paid the loan back in full.


What Are the Disadvantages?

Always look very carefully at the terms of the consolidation loan you are considering. How long are you borrowing the money for? What is the rate of interest? Although you may find that you are paying a lower interest rate than previously, this is not always the case. If the interest rate is higher than for many of your smaller loans, a consolidation loan will be a more expensive option for you. Consider too the number of years it will take you to pay back the loan. It could be that you will end up paying back much more with one consolidation loan than with a number of smaller debts if you agree to borrow the money over a longer period of time.


Never be tempted to borrow more money than you need. The idea is to wipe out your debts as quickly and cheaply as you can, not to accumulate fresh ones.


Should It Be Secured or Unsecured?

Debt consolidation loans can be secured against your home, but this is not a good idea if you think you might struggle to meet the payments. Secured loans usually offer lower rates of interest but should only be taken on if you are absolutely sure you will be able to pay back the loan. If you cannot, you may lose your home.



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