Spend or Save? Fun or Retirement Fund?

The never-ending balancing act that is personal finance can be tricky. It’s often hard to know what to do with your money as there is so much conflicting advice being issued.

Spend or Save?

The government are constantly switching between telling you to spend your money to boost the economy, and then to save it so you can buy property and have something to live on when you retire.

Getting to know your finances inside out can help you to make informed decisions that will help you in the future. A credit reference agency can give you all the information they hold on you via their site and you can use this to work out what you need to do to get in the best financial position possible.

If your credit rating is poor it is important to take measures to rebuild this so you will not be turned down for finance, credit cards, loans or even mortgages in the future.

Find out which companies you owe money to and contact them as soon as you can.

Explain your situation and work out a repayment schedule that you can afford. Be honest with this as the creditor doesn’t want you to default either and will likely accept a smaller amount as long as you can afford it.

If your debt has gotten out of control you should seek external help from someone like the Citizens Advice Bureau who may be able to show you ways to write off some debts.

This is not the time to save; wait until your debt is clear and you are not accruing interest before trying to put money aside. It’s also not the time for frivolous spending habits!

If you have made good financial choices you should have a healthy credit rating. It is tempting just to live happily within your means with no debt, but putting money away for the future if you can is always a great idea.

Find the right type of savings for you based on your own circumstances and start saving. This might be an ISA so you can start some tax-free savings, or maybe even a pension plan for your retirement.

To keep your credit rating healthy it is advisable to have some kind of credit that you pay off in full each month.

If you currently have nothing maybe take out a 0% interest credit card and use it once a month, always paying the balance off in full. Previous fulfilled credit arrangements are the best way of showing people like mortgage companies that you can manage your finances effectively, boosting your credit score.

Never try to pay off debt and save at the same time.

Work out the position you are realistically in, and then act accordingly. Thinking of the future is not the most fun way to use your money, but in the long term you will reap the rewards and enjoy the benefits of shiny clean credit history to boot!

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