Category Archives: Personal Finance and making money.

5 Ways to Help Your Children Financially Prepare for College

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As secondary education continues to get more expensive, teaching your children financial responsibility, as well as helping them out with the monetary burden of college, becomes crucial. While you always want your children to have it better than you did, teaching them how to budget and handle money is important not only in saving you some cash, but developing them as productive people. Here are a few simple way to get your child financially ready for university life.

1. Have Your Child Get a Job

Financially Prepare for College

Ways to Help Your Children Financially Prepare for College

 

Image via flickr by Waponi

You should have your child get a job in high school. This teaches him responsibility and how to make money. By the time he reaches college, don’t just hand over money. Offer to supplement his income for spending money, but only if he gets a part-time job.

Although college does require studying and class work, there is still a lot of downtime for your child to pick up a 10 to 20 hour a week job. By being employed and earning some of his own income, your child will learn to appreciate the money he gets.

2. Prepare a Budget

Before your child heads off to college, sit him down and show him how to make a budget. Demonstrate the differences between wants and needs and mention that he doesn’t have to pay for other people, be it food or entertainment. List all the different categories of expenditures and what percentage of his money should go to each piece of the pie. This will teach him not to overspend on frivolous things.

3. Utilize Apps

Smart phones offer quite a variety of apps to help money management become simple. Mint is just one of many free apps that allows you to view your bank accounts, income, and expenditures. It also has an alarm that goes off when you are reaching your spending limit. Because the younger generation is glued to their smart phones, why not give your child a constant reminder of budgeting if he is going to be on his phone anyway.

4. Teach About Investing

Often, parents will just give their children money or a credit card when they go to college, but this is actually counterproductive. If you feel you must hand over money, make it into a learning experience. Give them $500 to invest in stocks. The sooner they learn about the risks and benefits of the stock market, the better.

You can even make them read about financial investments. One such book is Fisher Investments on Materials, which can benefit both new and seasoned investors about the materials market, which is ever-changing and growing.

5. Take Out a Student Loan

While this may not seem like the greatest option, the learning value is incredible. Even if you don’t have your child take out a traditional student loan, have him pay you back some of the money. You don’t have to make him sign an official loan with you, just put forward all the information.

Your child will learn about interest and how to pay for a loan on a monthly basis. This will prepare him for the real world when he purchases a house or a car.

Teaching your child fiscal responsibility is a difficult task. But the sooner you teach him the ins and outs of handling money and meeting financial obligations, the more able he’ll be to deal with it once he is on his own. College is just the first step of taking off the training wheels.

 

Green is the New Tax Break

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Being green isn’t just a good idea because it’s good for the environment. While protecting ecosystems is lovely, a more immediate concern is your pocket-book. The following are a few reasons why being green is money-friendly now.

Valuable Tax Deductions

Tax Deductions For Going Green

Avail Valuable Tax Deductions For Going Green

 

Image via Flickr by KOMUnews

There are several tax deductions that still apply in the realms of electric cars and using more energy-efficient household items. While the deductions aren’t quite as generous today as they were in 2007, there is still a lot of money to be saved if you go aggressively into making your home work better and use less energy. In some cases, you can save up to 30 percent of the cost of installing items like solar panels and wind turbines. While these deductions may not last, they can help to take the sting out of the initial installation costs of some green items.

Lower Energy Bills

It goes without saying that if you make your home work more efficiently, you won’t use as much electricity. It also makes sense that you won’t use as much natural gas if that gets involved in your heating process. As you may have already guessed, this can mean saving a lot of money in heating and cooling your home. In cases where you use well insulated windows to add light, it can even lower your light bill. Alternative power production such as the installation of solar panels also works well to cut down your bills. There are all kinds of ways you can save money every month just by going greener.

More Value if You Sell Later

You may love your home so much that you stay in it for the rest of your natural life. But if you ever decide to move and sell your home, a lot of potential buyers will be impressed by a more efficient place. This works on a couple of levels, and they aren’t just about the immediate cash savings the buyer will get from having lower utility bills.

Naturally, a more efficient home is going to have the lower energy bills you heard about earlier. But what isn’t always so obvious is that a more efficient home usually comes from an owner who cares more about it. This care tends to result in less deferred maintenance and a better home, which will be less likely to need major maintenance early on.

More Comfort During Outages

Sometimes a utility is going to fail. As annoying as this will inevitably be, if you have alternative power generation going on you won’t be totally powerless. If you use a geothermal heating and cooling system powered with wind or solar panels, you may also be able to keep your home comfortable during an outage. If your insulation and blinds are good and you aren’t letting out too much of the air temperature you want, this also speaks of more comfort when the situation isn’t ideal.

There are so many ways you save money when you make your home more efficient. Going green may be the best thing you have ever done for your finances.

Idea To iPhone: The Essential Guide To Creating Your First App For iPhone and iPad

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Idea To iPhone- The Essential Guide To Creating Your First App For iPhone and iPadApps are big business and the media is full of stories of app millionaires. The internet has made becoming rich easier than ever, or has it? How easy is it to make an app? Or more importantly, how easy is it to sell it?

17-year-old Nick D’Aloisio hit the headlines by selling his app, Summly, to Yahoo for an estimated £18m, making him a tech superstar. But what about the rest of us who are not teenage whiz kids? I reviewed new book, Idea to iPhone to find out. Read on….

Idea to iPhone: The Essential Guide To Creating Your First App For iPhone and iPad by Carla White talks you through building an app from idea to iPhone, iPad, iPad mini or iPod Touch. Chapter 1 kicks off with your app adventure. It lists the excuses you may have not to make an app and dismantles them. I immediately liked this book when I was flicking through it for the first time. It is 294 pages of hard to find knowledge that you would not get anywhere else. Well, maybe if you trawled the internet for days, but even then I am not sure.

The graphs and pictures are great. The book is easy to understand anyway, but they add to the information getting into your brain. I learned that making an app is not as hard as you think and nor is it as expensive.

The other great information in this book is on Apple. How to grab their attention and how to work with them. Carla goes through everything you need to know about working with Apple and how iTunes can help or hurt sales. For instance, did you know that Apple take a 30% cut? They also pay you once a month after a four-week delay. There is also a step-by-step guide on becoming an Apple developer. Each chapter ends with a handy table of key points.

Chapter 2 is Shaping Ideas into Apps People Want. An essential chapter as there is no point in making apps that no one wants. This brilliant chapter lets you know how to find your audience. It also tells you how to integrate your app with Facebook and which device will be right for you.

Another thing I liked about the book is the quotes doted throughout. Perfect for inspiration.

Teaching you about finding an audience and building an app is one thing but marketing is also paramount. This book also covers that. You don’t need to hire an expensive PR company (at least not at first) you just need some hard work and imagination. There is also a checklist on building a press kit and information on how people scan iTunes. Essential for marketing your app.

It also has tips on finding a great designer, or designing yourself. And also a lot of information on finding and working with a developer. Tech tips on Xcode are also incredibly useful.

Further tips on making a profit, keeping track of money and getting the press interested make this book essential for anyone who wants to create their own app and become successful.

Idea to IPhone: The Essential Guide to Creating Your First App for the IPhone and IPad

 

Get Rich Blogging | Book Review

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get-rich-bloggingI met Zoe Griffin at a fundraising event for cervical cancer which was hosted by Jo’s Trust. Zoe is very vivacious and it is hard not to notice her as she is a social butterfly. I chatted to her on the night and said I would review her book, “Get Rich Blogging”. Zoe was the Sunday Mirror’s showbiz gossip columnist. She bravely left her job to start her blog, Livelikeavip. She did this three years ago and now earns a six-figure income and gets 80,000 hits a month. An impressive achievement. But what about the book? Here is my opinion….

Part one lets you know all about blogs and what Zoe wished she knew when she started hers. The book also has great exercises to get your business brain into gear. You may think you know all about blogging and what a blog is but Zoe leaves no stone unturned.

The section on making money will be popular – obviously, otherwise why would you have bought the book- and it does have a lot of great information on Skimlinks, google adsense, link-based advertising and other ad networks. This information is valuable and took me a lot of research to find when I started Frost. I do have to say that earning money from some of these is not as easy as you think, in the three years I had Skimlinks on my blog I made £32, and only $50 per year from infolinks. It is hardly setting the world on fire, and barely covered the cost of running the site. Zoe’s book has given me lots of ideas for other revenue streams though, and I was lucky enough to become a member of Handpicked Media.

The income section is separated between direct and indirect revenue. The above is direct while the indirect is things such as speaking arrangements, public appearances, collaboration and freelance contracts.

The other great thing about the book is that it helps you find the marketplace, and therefore the readers, of your blog. It is full of exercises, tips and quotes. The end of each chapter also has a checklist. The book then talks you through design, preparing for business, getting images and building your brand.

It also has a great chapter on social media: very important in these times. Building a loyal readership and boosting your income are also covered.

Part II is a great chapter of interviews with other bloggers, sectioned into their niche area. Along with tips of each niche area.

This book is an essential resource for those who are not only starting a blog, but also those who already have one. A great book. Five stars.

You can buy Get Rich Blogging here

I will be interviewing Zoe soon so check back for that,

 

Last minute ISA Ideas for 2012/13 Tax year

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·         ISA ideas for different types of investors

·         14% of all HL ISAs opened in the last week of the tax year

·         HL Opening Times

 

Adrian Lowcock, senior investment manager at Hargreaves Lansdown offers his ISA ideas as this year’s deadline approaches:

 

“In the last two tax years 14% of all new ISAs opened on the Hargreaves Lansdown Vantage platform were opened in the last week.  Make sure you take out your ISA as once the tax year ends you have lost that allowance. To take out an ISA all you need is your national insurance number, debit card and cleared funds in the bank.”

 

Income investor

 

Invesco Perpetual Distribution – This fund aims to provide a regular stable income this fund invests in a mix of bonds and income-producing equities. Approximately two-thirds is invested in corporate bonds with the remainder invested in equities. Income is its primary aim and it makes payments to investors monthly.

 

Defensive investor

 

Newton Real Return – This fund is for investors who may need access to some of their capital in the medium term (but still in at least 5 years’ time). It therefore tries to offer some sheltering of capital and aims for more modest growth. The manager invests in a variety of assets and uses sophisticated techniques to try to profit from assets which fall in value.

 

Medium Risk investor

 

Troy Trojan – This fund is defensively managed and provides the potential to achieve a reasonable level of return over the medium term with a little less volatility than the very long-term, more aggressive portfolios.

 

Long-Term investor

 

CF JM Finn Global Opportunities – This suggestion is for investors with a long time horizon.  Therefore the focus is on more risky areas with greater potential to build wealth over the long term.

 

Junior ISA / Investing for Children

 

Lindsell Train Global Equity – The managers invest in global equities and have a long term buy and hold approach. This compliments those investing for children who often have very long-term goals in mind.

 

 

Hargreaves Lansdown end of tax year opening hours

 

Monday 25 – Thursday 28 March                               8am – 7pm

Easter Bank Holiday weekend every day               9am – 6pm

Tuesday 2 April                                                                 8am – 8pm

Wednesday 3 April                                                          8am – 8pm

Thursday 4 April                                                                8am – 8pm

Friday 5 April                                                                      8am – Midnight

 

ISA deadlines

 

Stocks & Shares ISA

 

Online                   Friday 5th April – 23:45                                    www.hl.co.uk/ISA

Telephone          Friday 5th April – 23:55                                    0117 900 9000

Postal                    Friday 5th April

 

Bed & ISA

 

Funds on Vantage                           Wednesday 3rd April – 17:00

Shares on Vantage                          Friday 5th April – 12:00

Funds/ shares certificated           Wednesday 3rd April

ISA Contribution limits

 

                                  2012/13                                2013/14

 

Stocks and Shares ISA                    £11,280                                 £11,520

Junior ISA                                            £3,600                                   £3,720

Tax year end: last minute pension planning tips

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  • Investors are urged not to forget the ‘forgotten’ allowances
  • Falling annual allowance emphasises the importance of making hay while the sun shines
  • 50% tax relief is only available until 5th April
  • Bed and Sipp
Use your earnings related pension contribution allowance. For the past three years, we have seen a steady erosion in pension contribution allowances, with both the annual and lifetime allowances being cut. Both the Liberal Democrats and Labour have threatened to go further and limit the rates of tax relief available on pension contributions. If you have spare capital which you are looking to invest for your retirement, then it makes sense to get on and do it before 6 April.
Tom McPhail, Head of Pensions Research “Pensions are sometimes the forgotten allowance at this time of year when attention tends to be focused on ISAs, but with retirement saving tax breaks coming under increasing pressure from the Chancellor, wise investors will make hay while the sun shines. If you don’t use the allowances now, you may not get the chance next year.”
Non-earner’s pensions
It makes sense to share household retirement savings to take full advantage of the tax free personal allowance in retirement. Non-earners can contribute up to £3,600 a year to a pension and enjoy tax relief on their contributions. With personal allowances set to rise to £9,440 in 2013/14, a couple in retirement could enjoy a household income of nearly £19,000 a year without having to pay any tax – but only if they have shared their pension saving equally between them.
It is also possible to make pension contributions for your children – an effective way to give them a head start on their own retirement saving, as well as reducing a potential inheritance tax bill.
Bed and Sipp
Use existing investments to make a pension contribution. Even if you don’t have cash available to invest in a pension, you can potentially use other investments.
For example: Peter has some shares which he bought 10 years ago for £10,000. Today they are worth £15,000. He sells the shares, realising a gain of £5,000, which falls within his Capital Gains Tax allowance of £10,600. He invests the proceeds in his pension and immediately repurchases the share portfolio within his Sipp. As well as having now sheltered his investment within a pension for tax purposes, he also benefits from immediate tax relief of £3,750 which is added to his pension. If he is a higher rate taxpayer Peter can claim a further £3,750 after the end of the tax year.
Take advantage of the 50% tax rate.
For the (un)lucky few who pay 50% income tax, it makes sense to invest in a pension before the end of the tax year. Any contributions made from 6 April onwards will only be eligible for relief at 45%. If using carry forward as well, this could mean up to an additional £10,000 in tax relief.
Carry forward unused relief to boost contributions. If you have the capital to spare, then provided you also have the earnings to justify the contribution, it is possible to carry forward unused pension tax relief from up to 3 years ago. This means it is possible to make a pension contribution of up to £200,000, which for a 50% tax payer could then result in up to £100,000 of tax relief.
Plan ahead for flexible drawdown.
You’re not allowed to make any pension contributions in the same tax year in which you start flexible drawdown. So anyone planning on using flexible drawdown may want to top up their pension with any final contributions before 6th April – any contributions after that date could mean having to wait up to another 12 months before getting full access to their pension funds.

A decade on since FTSE 100 hit bottom at 3,287

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A decade on since FTSE 100 hit bottom at 3,287

 

–       FTSE 100 returns 93% over 10 years

–       Technology sector is best performing returning 369%

Adrian Lowcock, Senior Investment Manager at Hargreaves Lansdown, looks at how investors have fared over the last 10 years.

 

In the last 10 years the FTSE 100 has risen 3,074 points or 93% since the low of March 2003, although it remains a little way off the high point of 6,732 reached on 15th June 2007.  Whilst the market has risen over the last 10 years there have been some big winners and losers during that time.  The Banking sector has been the worst performer over the last 10 years and the only sector to post a negative capital return with the FTSE All-share/banks returning -20%. The Technology sector posted the best performance with the FTSE All-share/Technology returning 369%, recovering from the lows seen in the years following the Dotcom bubble.

 

 

Performance of FTSE Sectors from 12 March 2003 to 28th February 2013

 

All Share Sector

% Growth
FTSE All-Share/Banks CR

-20.25
FTSE All-Share/Financials CR

22.81
FTSE All-Share/Health Care CR

78.02
FTSE All-Share/Telecommunication CR

100.11
FTSE All-Share/Oil & Gas CR

110.22
FTSE All-Share/Consumer Services CR

112.91
FTSE All-Share/Utilities CR

179.25
FTSE All-Share/Basic Materials CR

280.44
FTSE All-Share/Consumer Goods CR

346.31
FTSE All-Share/Industrials CR

360.45
FTSE All-Share/Technology CR

369.08

 

Adrian Lowcock says;-

 

“The technology sectors strong performance over the last 10 years highlights the contrarian nature of the stock market.  However, it is difficult for any investor to go against the trend and take such risks. Instead investors should focus on their long term investment goals and invest whenever they can afford to do so.”

 

“It is time in the market not timing that counts. Even though the FTSE 100 remains below its all-time high (6,930 on 30th December), if you had been invested all that time, with dividends reinvested, you would have been up 44.73%. In addition picking the right funds can transform your portfolio and make the nominal value of an index meaningless.”

 

Recommendations

 

Schroder UK Alpha Plus – Richard Buxton takes a long term view and is able to spot some opportunities before others – a distinguishing feature of all great investors.  Having the conviction to back them is equally important and Richard holds only 30-40 companies in his fund which means each idea has a significant effect on performance. You will never see his portfolio padded out with mediocre holdings just to make up the numbers. This fund has the potential to deliver superb returns, in a variety of economic conditions.

 

JO Hambro UK Equity Income – The managers believe the UK economy is performing better than most commentators expect. The fund continues to have a bias towards more economically-sensitive companies and has performed well recently as a result.

 

Sort Your Finances Out In 2013

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January is the month that people make resolutions and try to sort their lives out. So, in the true spirit of January why not take the time out to sort your finances? Here are three top tips if you are needing some financial help.

1. Sell Your stuff: Sell unwanted stuff that is cluttering your home on Ebay, Ebid, the Amazon Marketplace or the ASOS marketplace. People generally have a lot of clothes they never wear and books that they have read. You will feel immediately better. I have regular clear outs.

2. Try lower brands at the supermarket. In the past supermarket own brand goods were not very good but the quality has really improved in recent years. Pound stores are also incredibly popular now and their is no stigma attached in shopping in them. The cost of living does not have to be expensive.

3. If you really need to borrow money take out a safe and secure affordable loan from a legitimate regulated lender. Many people are currently borrowing money from pay day lender sites which have annual interest rates in the thousands of percent. You could be wasting a fortune. The same is true of credit cards which often charge very high levels of interest. This interest can compound as the debt increases turn into a nightmare. As long as you are smart, taking out a loan to pay for a new home, car or a big purchase is fine.

Disclaimer: Consult a qualified financial advisor first before you take any action. Everyone’s situation is different and taking out a loan may not be the right decision for you depending on your personal circumstances.

Clydesdale Bank’s instant decision loan offers an APR representative of 5.1% on all loans between £7,500 and £15,000 (subject to conditions). http://www.cbonline.co.uk/personal/loans/personal-loan

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