What ‘Money: A Users Guide’ by Laura Whately Taught Us About Finance
Do you think you’ll be able to afford a mortgage? Have any idea what a cash ISA is? Ever wished schools taught finance and taxes as part of the curriculum?
Do not fear! Laura Whateley is here to save us. The award-winning journalist at the Times and author has a ton of tips and insights in her book Money: A Users Guide.
Here are some of the most important lessons we learnt from this book.
Find out where your pension is invested
Did you know that the money you’re saving for your pension is going towards funding the elderly currently living off their pension right now? Yeah, it’s not saved in a big metaphorical pot somewhere, just waiting for you. Find out where your money is being saved so that in the future you know how much you’re entitled too.
And if you haven’t started saving for a pension yet… get on it like a car bonnet. Laura Whateley’s explanation why will scare the knickers off of you.
Make sure that bill is actually cancelled
Ever stopped using a phone only to be landed with a MASSIVE phone bill? I have and Laura Whateley certainly knew someone – they got charged for accidentally using a tiny portion of data on holiday. The amount was in the five figures. *gulp*
Don’t forget your gas, electricity, water and all the other important bills too. They’re just as important and can sometimes catch you out too.
You should be aiming to save at least 10% of a mortgage deposit
If you want to buy a house and it is £200,000 then you need to think about saving at least £20,000 before approaching the bank for a mortgage. But don’t forget to also save a little extra to account for extras such as mortgage tax and stamp duty. For more info on those read Whateley’s book.
If you have less than 10% deposit not only will you have to spend more on a month to month basis to pay off your mortgage, you’re also not likely to get a mortgage in the first place. Since the crash banks are more sceptical as to how much money they loan you in order to pay off a house. Effectively the larger the deposit the better.
But how in the hell do we save all that money?
Credit history is really important when saving to buy a house
Remember those things called credit cards that are parents swore us off of as they cause so much debt? Yeah, it turns out we probably need one, like SoFi, to get a house. If you’ve only ever had one debit card and a children’s saving account then the bank has nothing to go on with regards to your reliability as you might not have taken out a loan before.
Can we trust this person to pay us back our HUGE sum of money? Hmm, check their credit score.
It’s simple as that. Laura Whateley suggests that we get a credit card to pay for day-to-day shopping for a few months and then set up a direct debit to pay it off fully each month. Don’t max it out though, that wouldn’t be good. It’s not free money after all.
NEVER get a Payday loan
Ever seen those adverts telling you, you can top up your account a few days before payday and all you need to do is return the money when you get paid next. Yeah, they lie! It will ruin your credit score almost instantly.
‘Some banks will not lend to you at all if you have taken out a payday loan’ Laura says. They’re the ultimate credit-score killer due to their extortionate rates.
Money: A Users Guide is out now in all good retailers in ebook and paperback format.