Useful Personal Financial Advice

Finance is not of interest to most people, this is the reason why many are losing in the battle over taking control of their finances. However, with the personal financial advices that are plenty there, it is not a losing case to get hold of your control on the situation of your finances. There are many financial help you can get through reading and practicing to put them into application.

Getting the right personal financial advices for your application can really be easy. The challenge comes on applying them to your daily life. However, if you get successful in applying them for your financial needs, you will sure gain rewards for the efforts you give. The personal control of the financial aspect can be really hard unless you have great control of yourself and discipline in following the advices that you sought.

Here are some good personal financial advice you can consider to follow for you to be able to get that control of your own money and its flow:

– Spending Limits
Set yourself some limits when utilizing available funds you have. For a start, it will be wise to curb an extra spending amount for each week. It will be very hard and frustrating not to have some extra spending for those treats you want to buy for yourself. Moreover, if you do not have the extra allowance, you will be tempted to cut some money from the savings you have and may lost the control you are trying to develop.

– Prepare for some huge expenses.
Usually, if you do not plan for your future expenses, you will end up using the money you have saved for the last months you have been applying the personal financial advices you get from many experts. If this happens, you will surely feel discouraged seeing you drain your savings hugely for some expected expense that you did not allot your money for. Setting aside small amounts for the big expense is the secret to avoid losing control of your finances again. Moreover, you will save more by paying these bills and expenses on time since you will not have to incur interest charges.

– Prioritize the use of your money.
Be aware that those people who are not successful in applying the many persona; financial advices are those that never learned to identify their needs from their whims. Be sure to know which your needs are and which are the things you can survive without. This way, you can prioritize your needs and save up money for the things you want to buy yourself as a reward.

– Invest your money wisely.
Investing money is a common personal financial advice you can hear. However, wisely an investment needs a lot of studying and analyzing. If you will be able to learn which investment will gain you much more is the key for this success, all you need to do is do your homework.
Make sure when you follow any personal financial advice to consider savings as the top of your priorities. All the advices you get will be of no use if you will also spend all the earnings you get from investments and all the planning you do. Make sure to prepare yourself in how you can make the money you have now grow and have the money under your control by keeping them.

Does Independent Financial Advice Find the Best Deal For You?

After what feels like an eternity in recession, lenders are still not keen to lend and until the UK general election is over, it doesn’t feel like very much is going to change.

Pre credit crunch times had a mortgage market providing in excess of 25,000 different mortgage deals and loans galore, but today the UK markets have less than 5000 mortgage products on offer to the consumer.

So where did the credit crunch come from and could it happen again?

The US finance markets imploded in the 4th quarter of 2007 due to bad credit on the balance sheets of large financial institutions, which ultimately caused what is known as a credit crunch.

In a credit crunch, lenders stop lending and start hoarding cash because they are afraid of rising bad debts, leading to bankruptcies and loan or mortgage defaults. They charge higher interest rates in a bid to stem the flow of business or reject all but the safest loans.

The UK economy had been flooded with easy to access borrowed money since the mid 90’s, but the credit crunch meant that tightened credit would spell trouble for companies who needing funding in the form of loans to pursue their business plans and the consumer, who had become used to freely spending money they didn’t have, but could easily access on credit cards for expensive purchases such as luxurious holidays and smart cars.

The answer to could it happen again is a simple one, YES!

If an appetite for investment in more risky markets returns, which you have to say it will, then pushing the limits commercially to gain extra percentage market share and profit, could lead to the whole thing happening all over again. Having said that, it will take sometime to get there, as returning confidence to dabble by investors will be slow to return, but good times will return and the painful effects will soon be forgotten.

So, how is the man on the street directly affected?

UK mortgage and loan lenders are releasing more new products on a daily basis and the best mortgage deals of today are soon replaced tomorrow, but the good news is that the deals are getting better and better. The percentage levels that lenders will loan to is increasing and a 90% mortgage, with a competitive interest rate is out there to be found, if you know where to look.

So how do Independent Financial Advisers add value?

Independent Financial Advisers (IFA’s) are well placed to search the market, compare mortgage rates on their client’s behalf and secure a great mortgage rate to suit the borrower’s exact needs. In addition to finance, IFA’s can provide a good value for money service if you are looking to source good quality, value for money, but cheap life insurance cover and pension plans, with advice that is specifically tailored to the individual or families needs.

Financial advice is available in many guises, the internet has led to a plethora of channels being available for the consumer to utilise when seeking help and advice. Finance related price comparison websites have the added advantage of being a one stop shop for all mortgage, loan and insurance needs. By completing your details once, you have the advantage of using their services to trawl the market and find you the best deals available, but there is still an argument for using the services of a local to you, independent financial adviser. The IFA can take the time to understand any unusual circumstances that you may have and tailor their financial advice accordingly and some finance price comparison websites are now offering both options under one roof to facilitate the needs of a far wider consumer group.

Financial Advice: Rebuilding A Relationship of Trust

“We can’t legislate wisdom or passion. We can’t legislate competency. All we can do is create the structures and hope that good people will be appointed who will attract other good people – people who will make careers and listen and see to it that never again do we go through what we have gone through.”

Connecticut senator, Chris Dodd, as quoted in The New York Times, July 15, 2010

With the recent passage of the historic Financial Regulation Bill, the transgressions of the financial industry and new provisions designed to prevent these types of excesses in the future have once again taken center stage. The legislation comes at a time when mistrust of financial services is epidemic. Nervous investors traumatized by losses and mismanagement of their funds wonder how to go about getting reliable and trustworthy advice.

Not long ago I came across a small column in the Business section of The New York Times Sunday edition, entitled “Beware Advice That’s Generic.” I thought, “What’s wrong with offering advice that may have a broad general application?” I realized that if people mistake such advice as directed towards them specifically, it could end up doing them a disservice. This led me to the larger question, in relation to financial matters, whose information and advice can you trust?

Three Suggestions

This is a big issue and one that deserves careful thought. I would like to offer three basic ideas to help put you on firmer ground when seeking and evaluating financial advice. First, become more independent. Take more responsibility for your financial well-being. Second, commit to the selective use of a number of different resources. Third, establish a relationship, or two, with trusted financial professionals.

Taking more responsibility means educating yourself about financial subjects. Pick a topic and research it. Maybe you want to learn more about bonds or determining a good investment mix. Having more information will help you make better financial decisions. While you will probably still want to seek professional advice, the more you know yourself the better your decisions will be. The old saying is true- no one cares as much about your money as you do.

Beware of Sound Bites and White Noise

Choosing your resources for information selectively is extremely important. People seem to want sound bites and easy answers. But in personal finance there are few easy answers and the sound bites can lead you astray if you aren’t careful. I would encourage people to avoid the television and radio. There is too much “white noise” being passed off as valuable information about the markets.

Pare down both the quantity of information you take in, as well as the focus of your information gathering. Investigate subjects of particular interest to you. I find the personal finance articles in The New York Times, The Wall Street Journal and Morningstar to be of very high quality. And, referring back to the article I saw in The Times – be wary of generic advice that doesn’t apply to your situation!

Financial Relationships

Becoming better informed is an important part of taking charge of our financial health. However, we recognize the need for expertise. Much as the family physician is a trusted source of advice on many important issues, he is not the one we would go to for a knee replacement. We may very well turn to him, though, for a good referral to the appropriate specialist. In much the same way, we need to cultivate those relationships we already have with trusted professionals in various areas of our financial lives. These could be personal bankers, accountants or estate-planning attorneys. Ask these professionals, as well as neighbors and friends, if they can recommend a financial planner whom they like. Many financial advisers offer free initial consultations. Subscribe to their newsletters. Get to know who they are and how they might help you.

In conclusion, educating ourselves is really our best response to the skepticism and mistrust we may feel when looking for sound financial guidance. Seek out a few good sources of information, and begin to develop a relationship with a financial professional. Don’t wait until an urgent need leaves you scrambling to find someone. Engage simultaneously in all three of the steps we have discussed. The old adage applies here: dig your well before you need it.

And finally, you still need to be skeptical and to ask a lot of questions. By all means, get a second opinion.

To read “Beware Advice That’s Generic” click here.

‘Demand’ For Generic Financial Advice

There is a great need for a generic financial advisory service to be rolled out across Britain.

So claims Citizens Advice, following analysis of a pilot project it carried out with a number of independent financial advisers (IFAs) and the Personal Finance Society. Funded by Barclays and Aegon, the Moneyplan scheme saw some 30 IFAs offer face-to-face monetary advice at Citizens Advice branches throughout the country for free.

Following on from such guidance, it is possible that consumers will be able to secure access to cheap loans and other competitively-priced financial products, so helping them to get back on to their fiscal feet.

Overall, pensions, mortgages and investments were among the main areas consumers were looking for advice on. Insurance and understanding documents from money providers, which may include loan lenders, were also sources of requests for help with money.

With owner-occupiers, aged 50 years or above and who are on a relatively low income, making up the majority of clients using the Moneyplan service, the company advised that “the trigger” for causing people to seek out help with their finances often follows on from retirement, illness, bereavement or becoming redundant.

For those people concerned about handling their finances should they be affected by any of the above life-changing circumstances, a low-rate personal loan could be a means of financial assistance.

Findings from the initiative also revealed that more than half (55 per cent) of those seeking guidance were on a low income, earning less than 1,000 pounds per month. Meanwhile, 71 per cent of such people were shown to be over the age of 50, with 46 per cent reported to be living alone or in a couple who do not have any dependent children. In addition, just less than half (48 per cent) have a mortgage, with 31 per cent of those who go to Citizens Advice for help own their home outright.

Currently, the provision of generic fiscal advisory service is the subject of an independent review, headed by Otto Thoresen. Citizens Advice went on to report that there is “significant demand” for such assistance. However, the guidance institution suggested that many people often do not think about getting help from an IFA or believe that they may be unable to afford such advice.

Jackie Nowell, head of partnership development for Citizens Advice, said: “The results so far of partnering Citizens Advice Bureaux with IFAs in the Moneyplan project indicate both that there is a need for a national generic financial advice service and that this is an effective model for delivering it. The range of issues presented to the IFAs is broad, but it appears that there is particular demand from those who may own their own homes, but have low incomes. This evidence emphasises that there is a gap in provision which needs to be addressed.”

From receiving comprehensive financial guidance, it is possible that people might be able to seek out competitively-priced personal loans, savings accounts, credit cards and other financial products with greater ease. Following on from advice on loans and other areas, people may find that they are able to get to grips with money more effectively. However it may be advisable to stick to the professionals when seeking help. A recent study by Birmingham Midshires indicated that 16 per cent of consumers have been given poor monetary advice from either a friend or family member, which has seen eight out of ten people suffer financially.

Financial Advice From 1796

As leader of the Constitutional Convention, commander of the Continental Army and first American president, George Washington is considered by many to be one of our nation’s greatest heroes, renowned for his character and leadership. In his 1796 farewell address, Washington masterfully articulated his reasons for not seeking a third term of the presidency, and offered an eloquent argument for the importance of patriotism and protecting liberty. He also offered some prudent financial advice in a portion of the speech penned as “Warnings of a Parting Friend.” I believe these points still hold true today.

Quote #1: “And there being constant danger of excess, the effort ought to be by force… to mitigate and assuage it. A fire not to be quenched, it demands a uniform vigilance to prevent its bursting into a flame, lest, instead of warming, it should consume.”

Washington seems to be speaking about the danger of political parties, departments within the government, and individuals who try to seek more power and riches for themselves. He indicates that the spirit of always wanting more is good to a certain extent (a fire not to be quenched); however, if not vigilantly watched or kept in check and balanced, it could destroy (consume). This lesson can still apply to both personal and government spending and the importance of living within our means.

Quote #2: “As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it… “

Washington appears to be emphasizing how important having good credit is. He was advising the nation and its citizens to be careful how often they use credit and for what purpose. Washington also seems to acknowledge that for a prudent purpose, credit could and maybe even should be used if the benefit ensures stability and offers a hedge against potential risks. These important financial lessons should jump out of history books and into our personal and government spending habits!

Quote #3: “… avoid likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertion in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear… You should practically bear in mind that towards the payment of debts there must be revenue… “

Washington warns against going into debt unless the expense is absolutely necessary. In today’s times, many people incur debt to go to school, purchase a car or buy a home; but that does not mean you should necessarily go into debt if you don’t have to. Washington also points out that debt incurred during hard times should be repaid during times of peace and prosperity; if not, the debt will likely not get paid off. (He has definitely been right about that on a national level!) On an individual level, the takeaway is to consider paying off debt when you have extra cash available, and ideally to pay it off sooner rather than later.

Washington was a truly legendary leader, and in his Farewell Address I believe he was speaking to the nation as a whole and to its people as individuals. I also believe Washington’s advice is as timely and true in 2012 as it was in 1796. With such powerful and still-applicable words, it’s no wonder that reading Washington’s Farewell Address has been an annual tradition in the U.S. Senate since 1896. And remember, we know Washington’s words must be true because he could not tell a lie!