Is a Cashback Credit Card Worth Getting?

You may have seen that there are some credit cards that offer cash back and you may wonder whether these are something that you should consider using. They can look very tempting but they may not be a good idea for everyone. It is a good idea to think through whether to get one based on the advantages and disadvantages.

Advantages of a Cashback Credit Card

A cashback credit card will give you money back when you use the card. Generally, it will give you a percentage of what you spend on the card. This will then be added to your account balance so will help to pay off some of the card for the following month. This means that you will get a small reward every time you spend money. This can be a great bonus, even if it is small. Free money is always good!

Cashback credit cards can have huge advantages if used correctly.

Disadvantages of a Cashback Credit Card

Often it can be the case that a cashback credit card will have a higher interest rate than a traditional credit card. This means that if you do not repay the balance in full and you get charged interest, you will find that you will tend to pay more than you would with a standard card. It is worth calculating whether you will pay so much more that it is better to forgo the cashback and go with a standard card instead. You should be able to check the interest rate with the card issuer. If you do take out a card, it is wise to check the interest regularly and how it compares as you could find that it will change and perhaps get less competitive.

It could also be the case that you will try to use the card more often because you want to get the cashback. Although buying things using the card, that you would have bought anyway, could be sensible as you will get cashback that you would not get if you bought the items using a debit card or cash, but it can be tempting to use it as an excuse to just buy loads of extra things. Some people need very little reason to treat themselves to lots of things, but this can be tricky. If you cannot afford them, then you will have credit card debt and this can be expensive. You may also need to use the money to buy necessary things, perhaps to pay off a loan or maybe you should be saving up towards something. Therefore, think hard about whether having a card like this might just be too tempting for you.

So, the cashback card can be really good for anyone that repays their whole credit card balance when it is due. If they pay it in full each month, they will never be charged interest and so they will profit from the cashback. However, if they tend to leave outstanding debt then it is unlikely, they will profit as interest rates are likely to be higher on these cards. It is also worth thinking about whether you feel that you will get carried away and use the cashback to justify buying more than normal. If you think this might apply to you, then you should be cautious and perhaps avoid this type of card. It is also wise to probably avoid it if you do not intend to repay the balance in full as it is likely that it will be more expensive in interest compared to other cards. But do check to be completely sure, as rates change regularly and you might be surprised.

How do I Keep my Supermarket Costs Down?

We all have to buy food and most of us will buy some or all of our food from the supermarket. However, we may come away feeling that the cost is rather high and wonder whether there are ways that we can spend less. We may wonder how we are spending so much and what we are spending the money on. There are things we might need to look out for and things we can do to check, which might help us to reduce the costs.

Look at the Receipts

It can be a good idea to check your receipt once you return home from the supermarket. This will allow you to see exactly how much everything has cost you. Although we know we should, it is not always that easy to check prices in the supermarket. We might want to just quickly rush through and grab what we need as many of us do not find shopping that much fun. However, it is worth looking at the prices of what you are buying as you may change your mind about buying certain things as regularly, once you see how much they cost. You may also decide to replace certain products with cheaper alternatives.

Consider Buying Certain Items Elsewhere

You may find that there are certain things that will be cheaper to buy elsewhere. For example, it is possible that branded toiletries might be cheaper in a discount pharmacy on the high street or online and that may also be the case for clothing, home wares etc. It tends to be food where most supermarkets tend to discount and the other items can be dearer compared with other shops. Obviously, this will vary a lot, depending on which supermarket you use and how they price their products, but it is well worth looking into this.

Compare Supermarkets

Supermarkets do a vary a lot in what they charge. They also vary in what they charge for specific products. This means that you may find that a supermarket you consider to be a budget one, might be more expensive for the type of items that you buy. This is why it is really important to make sure that when you are comparing prices you do not make assumptions but you actually look at the things you buy and compare the prices of those.

Compare Brands

It is also worth comparing the prices of different brands when you are in a supermarket. Sometimes you can be surprised by prices. It might be that a brand is cheaper than an own brand or that it offers better value for money. Shop carefully and compare them as you could find that you are unwittingly buying a more expensive product that you assumed would be cheap.

Beware of Offers

There are often special offers in supermarkets on junk food. This tends to be the area where they have most offers. When we see an offer, we can be tempted to buy it because we think we are saving money but it is worth questioning whether we really are saving money on this item. Consider whether you really need these items. Will you be replacing something you normally buy with them, in which case you may be saving money or will you be buying them as extras in which case you are spending more money and not saving any. Also think about whether you should even be buying junk food and whether you should just be buying healthier food anyway. Junk food tends to be expensive and there is no need for us to snack and if we make meals form scratch they are often cheaper and healthier.

Is a Piggy Bank a Good Way to Save?

There are many children that will have a piggy bank or money box that they will use to save money. There may be some adults that save money this was as well. However, there may be some people that feel that it is not a good way to save money at all. It is therefore worth thinking about the pros and cons of saving this way.

Advantages of Using a Piggy Bank

Using a piggy bank can help to encourage children to save. Hearing money dropping inside and filling it up can be rewarding. Some piggy banks are even designed to make it more rewarding for children to use them, such a playing a tune or moving when money is put inside. A piggy bank will also give a child the opportunity to think about saving money. Parents can use it as an opportunity to explain to children about the benefits of saving money as well.

It will also encourage children to not spend all of the money that they have. They will get used to the idea that when they get money, they do not always have to spend it but they could save some and put it aside for later.

It can also be used to show children the idea of saving up for something. So if they want something that is more expensive than they can afford, they will be able to save up money, such as pocket money or money they have got for gifts, so that they can afford it in the future.

Disadvantages of Using a Piggy Bank

When you put money into a piggy bank it does nothing, this is compared to putting it into a savings account where it will earn interest. So, it can be wiser to save money in a bank account or once a piggy bank has some money accumulated in it to pay it into the bank so that you can start to get interest in it.

There are some people that make a mistake with saving. They will get a certain amount of money out of the ATM each week. Then when they have spare change, they will put it in a piggy bank and think that they are saving money. However, if they are not using a budget to determine how much they are drawing out of the ATM and how often, it will not help them save money at all. It would be better to spend that money and leave longer between drawing it out of the bank as the money in the bank might earn interest on it.

So, you need to think about whether you feel that using a piggy bank is a good idea. Perhaps for a child, it is a good way to get them used to the idea of saving money. However, also encouraging them to make sure that money is put into a savings account where it can earn interest is something which is important as well. It is also so important to make sure that you really are saving money. By just popping coins in a jar you are not saving money. You may as well draw out £20 from your savings account, change it into coins and put it in a bottle at home. This is not saving and hopefully everyone can see that it is not and therefore hopefully people will stop doing this sort of thing, but put money into a savings account instead, when they can afford to. It is also wise to compare interest on savings accounts to make sure that you get the best possible rate.

Should I Borrow Money to Decorate my House?

There are many financial decisions that we have to make and it is not always easy to know what to do for the best. For example, if you would like to decorate your home, you will need to pay for it. You may just need to buy paint and do the job yourself, but you might employ someone to do it for you or you might want to hang wallpaper, change the furnishings and accessories and things like this. The costs could be quite low but they have the potential to be really high. It could be the case that you will need to think about how you will pay for it. You may wonder whether you should borrow money to pay for it.

Advantages of Borrowing

If you borrow the money to get the decorating done, then you will be able to get it done quickly. You should be able to organise the loan pretty quickly or even use a credit card or overdraft that you already have arranged. It means that you will be able to buy what you need and get the job done really quickly. You may even be able to afford a few extra things that you would not have been able to get had you not borrowed the money. It can be pretty easy to borrow money too, as long as you have a good credit record.

There are some disadvantages to borrowing.

Disadvantages of Borrowing

If you borrow money then there will always be a charge. All loans have interest charged on them and you may also be charged a fee as well. This charge will vary depending on the loan type and the lender that you choose. It is very wise to look at the different options that you have for borrowing and make sure that you are not paying more than necessary. You will find that there are different types of loans that you can choose between and then there will be different lenders that are providing those loans. These will vary in cost as well as having other different features as well. It can be a good idea to check these out as well. It is also extremely important to make sure that you are aware of how the loan needs to be repaid. Often you will need to repay monthly and you need to find out how much you will be expected to repay. You need to think about whether this amount of money is something that you will be able to afford. Check really carefully because you will be charged extra if you miss a repayment so you need to be confident that you will be able to afford it.

Therefore, you need to think hard about whether borrowing will be the right thing to do for you. You need to think about whether you are prepared to pay the extra money for the loan or whether you feel it would not be worth it. You should consider whether if the cost of the decorating was the amount you are paying plus the cost of the loan, whether you would still be happy to have it done. You also need to think about the repayments and make sure that you are confident that you will be able to pay them. Think about how you will feel about having to make those repayments and whether you will just take them in your stride or whether they will be stressful. If you will have to go without other things in order to afford them, you will need to think about whether you feel that you will be happy with that.

How Much should I Spend on my Hobbies?

Most of us have some sort of hobby. These can vary a lot from simply taking walks or seeing family, to foreign holidays and arts and crafts. There is a big range of things and they cost different amounts of money. Some people will spend a great deal of money and others will spend hardly anything. However, regardless of how much it costs you, you should still be thinking about how much you can afford to spend on them. There is a methodical way that you can work this out.

Find out How Much Money you Have in Each Month

If you already have a note of your household finances then you can skip this step and the next step. However, if not you will need to do it. It is pretty easy to do though as you should be able to just look at your bank statements to find out if you do not know already. If the amount varies, then try to come up with an average amount or you may feel happier just noting down the minimum.

Find out How Much you Have to Spend Each Month

The next stage is to make a note of everything that you have to buy each month. This is things such as loan repayments, rent or mortgage, utilities, contracts, direct debits, standing orders, food, travel etc. These are items that either you cannot live or work without or you are contractually obliged to pay for. Add up all of these and then you will know whether you have anything left.

Consider How you Want to Spend the Rest

If there is money left, you will be able to then think about whether you want to spend all of this on your hobby or some on other things. It might be that you want to do other things and not just your hobby, such as going out for a meal, buying some new clothes, buying a few gifts and things like this. You may want to save some money for some other things as well so think about all of this and then you will be able to see how much is left to spend on your hobby. It is a good idea to then think about whether you will want to spend that much money each month or wait and save a larger amount every few months.

It is important to make sure that you do not spend more than you can afford. Although it is really important for us to have hobbies and to have relax time, we need to make sure that we do not get carried away with spending too much money on them. If we do this, then we could find that we get into financial difficulties. These could lead to us being stressed and can undo the good that the relaxing hobby is actually providing us with. Therefore, this is why it is important to think hard about whether you are spending too much on your hobby or not. You may need to change the things you are spending money on, if you want to spend more on your hobby. It can be great to make sure that any money that you spend outside of what it is necessary to buy is carefully chosen. So, you make sure that the items you buy will bring you as much pleasure as possible.  This will not only mean that you will enjoy yourself more in your spare time, but will also mean that you will get as much pleasure as possible out of the money that you have.