Category Archives: Finance Help

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Cost Of Divorce On The Rise

Average Divorce Costs Over £70k

According to research conducted by the commercial law firm, Seddons, the average cost of divorce for couples is £70,243 and takes 11 months to complete. The exorbitant price tag is composed of approximately £4700 in lost wages, another £5000 in new living accommodations, legal fees just under £9000, and the outstanding £51,000 is attributed to debt and shared assets.

For Londoners, the stats are far worse as the average costs of divorce almost doubles to £134,525! Due to the overall higher costs of living and legal fees, Londoners stand to lose 92% more in a divorce than the average couple.

Thankfully, there are ways to circumvent the astronomical price of divorce. But as a forewarning, most of these options do require a healthy level of amicability between both parties.

 

  • DIY Online Divorce – A quick Google search for online divorce will bring up several quick divorce service providers. These will be the cheapest option as the dissolution can be less than £1000 and take less than six weeks. However, this option is really only advised for those that have only been married a short time or have been separated for over five years, and have already negotiated and agreed on asset division, debt repayment, and child custody/visitation. You can find more information regarding DIY divorce at org.uk.

 

  • Mediation Without Lawyers – A divorce mediator acts as the neutral third party that helps the couple negotiate on the terms of the divorce (assets, debt, children, etc.). They are less expensive than solicitors and will provide couples with a clear, objective view of a settlement that works for both parties.

 

  • Mediation With Lawyers – While a mediator will generally be well versed in family law, they are not solicitors and cannot give legal advice. Therefore, to ensure that there are no missteps in slightly more complicated matters, lawyers may be necessary. Mediation with solicitors can also speed up the divorce process. Rather than having two solicitors fight to the death for their clients, the mediator acts as referee, which can solve disputes faster and cut down on the billable hours.

 

  • Arbitration And Collaboration – Arbitration is used when a couple employs the help of a solicitor for one particular issue when negotiation appears to be at a stalemate. It is generally used to work out complicated financial matters. Collaboration is when the couple and their lawyers meet for a roundtable discussion/negotiation to settle dissolution terms and avoid going to court.

 

  • Direct Access With A Barrister – Rather than appointing a solicitor, you can go directly to a barrister for legal council. This option will usually halve the cost of a divorce using solicitors. You can search for barristers using the Direct Access Portal.

 

These options are meant to help couples avoid going to court. If you find yourself in a particularly nasty and complicated separation there are other ways you can keep costs down with your solicitor.

Lastly, if you are willing to do absolutely anything to avoid the £70,000 expense, there is always the option of marriage counselling.

Your Real Salary: The True Cost of Your Job

Most people know how much they make. It is written on paystubs, deposited in your bank account, and on your job offer paperwork. But, not everyone knows what their job costs, and it does have a cost. In fact, you can’t understand your real salary without understanding the expenses associated with your job.

To help you learn this somewhat hidden number, here are the costs you need to consider.

Commuting

Commuting costs are a fairly obvious work expense. The cost of petrol or public transportation is easy to attribute to your daily treks to and from work. But there can be more costs involved. Wear and tear on your vehicle and regular maintenance also need to be counted. For example, tyres need replacing regularly. While you would have to replace them even if you don’t drive to work, you have to replace them faster because you do. That means some of that cost is tied directly to your employment.

Clothing

If your job has a dress code, then the costs of clothing for work also must be counted. And, if you have to have them sent out for cleaning, those are also connected to your employment. To take it further, if you go out of your way to get them cleaned, those transportation costs are also related.

Essentially, if it is related to your work attire, and is an expense you wouldn’t otherwise have, then your job is costing you that sum. To be fair, you would need to account for the price of the clothing you would wear if you didn’t have to follow a dress code and only attribute the difference to your job. But, it can still be a substantial sum depending on your work.

Food and Drink

Any food and beverage purchases that would not occur without your job are also included. Whether that means a lunch out with co-workers, a dinner meeting with clients, or a pint after work to de-stress, if you wouldn’t have spent the money if it weren’t for your job, then consider it. However, anything you bring from home that you would have eaten whether you had your job or not doesn’t need to be included.

Why This Matters

Different jobs come with varying expenses. Commute lengths and methods, dress code requirements, and food and drink purchases often change if you accept a new job. And this information is critical for accurately assessing whether a new job is a smart move.

For example, if a new job comes with a higher salary, but increased commute and clothing expenses, you might not actually bring home any more money than you do now for paying bills and discretionary spending. And, if that job comes with longer hours, you are losing time and making the pay increase less valuable.

When evaluating a new opportunity, don’t just examine the salary written on the piece of paper. Consider all of the costs before making a commitment. Now, it is possible that the job offers benefits that make a stagnant take home salary worth it, but it can also come with negatives that make it worse. Look at the whole picture first, and make sure you understand what your job today, and any offers tomorrow, actually cost before you get excited about a pay bump on paper.

The ABC’s (and D’s) of Resolution Success

As we welcome 2017 into our lives, many choose to participate in a long-standing tradition: New Year’s Resolutions. But, setting a resolution doesn’t guarantee success. In fact, many fail to reach the goals associated with their resolutions. However, there are techniques one can use to increase their odds of success. Here are a few tips to get you started on your path to 2017 glory.

Allow for Deviations

People often have an all-or-nothing approach to resolutions. If they even slightly deviate from the plan, then the resolution gets thrown aside as a failure. But this fatalistic attitude is unnecessary. For example, indulging one day instead of sticking to your diet doesn’t mean you can’t continue on the healthier path tomorrow.

Understand that temporary set-backs will occur, and mistakes will be made. And then, reassert your dedication to the cause and move forward again.

Bring Friends and Family to the Fight

Having a strong support system makes achieving one’s goals easier. Make sure that friends and family know about your resolutions, and enlist their help in getting to your desired destination. Not only does this help make you more accountable for your actions, but it also gives you a group of people in your life who are prepared to cheer you on when you need a boost.

It is important to have someone you can reach out to when you hit a low point. And, with most resolutions, a low point will occur. Don’t set yourself for failure by keeping your resolution a secret from everyone you know. If you aren’t comfortable with everyone knowing, then choose a confidante or two to help you on your journey.

Create a Plan

Resolutions are not completed overnight. Instead, there are numerous steps along the way to final success. Instead of only letting the final destination guide you, take the time to identify the mini-goals you must meet along the way.

For example, if your goal is to eat better, then a mini-goal might be to get one more serving of fruits and vegetables every day. The mini-goal gives you something measurable that you can reach with relative ease. Once you reach that milestone, simply work towards a new one.

You also need to plan to avoid your triggers. If eating healthy is your goal, and a particular sweet shop always pulls you in, then you need to find ways to avoid that location as often as possible. Sometimes this means going a bit out of your way, but even traveling on the next road over might be enough to keep temptation at bay.

Don’t Be Afraid of Rewards

Rewards help you maintain your motivation, so make sure to incorporate them into your plan. But you need to avoid any rewards that work against your goals. For example, if improving your diet or losing weight is part of your plan, don’t use unhealthy foods as rewards. Instead, choose options that let you stick with your resolutions but still have some fun.

By setting yourself up for resolution success, you are better able to meet your goals. So give yourself a fighting chance in 2017, and give these tips a try. You may be surprised by the results.

new year

New Year’s Resolutions: Personal Finance Edition

Nothing brings forth the desire for self-improvement like an approaching new year. And personal finances are a common topic for those searching for resolution inspiration. So, if you are interested in improving your financial situation during 2017, try these New Year’s Resolutions on for size.

New Year’s Resolution #1: Get to Know Your True Financial Situation

If all you know for sure is that your financial situation needs help, then this is the resolution for you. The first step to solving any personal finance problem is facing your current situation directly. Get all of your account documents together, including debts and assets, and organize the information. Use a method that suits your preferences. Some people favour spreadsheets or other tracking software, while others prefer putting pen to paper.

Once you have records regarding what you have and what you owe, you can create a plan to improve the management of your finances into the future.

New Year’s Resolution #2: Stop Using Credit

Many people jump to resolutions regarding paying off debt. However, a key to getting rid of debt is to avoid taking more on. Instead of focusing the amount attributed to each debt, start by making all required payments and not increasing any balances. Additionally, don’t apply for any new sources of credit.

If you can meet your repayment obligations and otherwise make ends meet, consider that a great start to improving your financial situation.

New Year’s Resolution #3: Start Saving

Anyone without suitable emergency savings needs to put funds towards meeting that need before accelerating debt repayment. If you don’t have savings, you won’t have the cash available to handle even small financial emergencies. Aim to collect at least a few hundred pounds into a reasonably accessible savings account. Only after that should debt repayment be a priority.

New Year’s Resolution #4: Debt Repayment

Once you stop using credit and have some money in savings, now you can focus extra funds on debt repayment. There are two traditional approaches to creating debt repayment plans: the Debt Snowball and the Debt Avalanche.

The Debt Snowball Method, popularized by personal finance guru Dave Ramsey, focuses on paying off the debt with the smallest balance first. Then, the next lowest balance is targeted for repayment. The idea is to build momentum through obtaining some quick wins along your repayment journey to help keep you motivated.

The Debt Avalanche Method focuses on repaying the debt with the highest interest rate first. Then, once the first debt is repaid, the next debt with the highest interest rate becomes the new target. This approach saves money in the long run, as the total amount of interest owed throughout the life of all of your debts is lower than the snowball approach. However, it can take longer to obtain that first win depending on the amount owed on your highest interest debt.

Whichever process you choose, just continue prioritizing the next debt based on either the balance or interest rate. Once the last debt is repaid, the process is complete.

New Year’s Resolution #5: Save More

After getting out of debt, it feels as though there isn’t much else to do. However, here is where you can really get your financial future on stable ground. Increase your available savings until you have at least six months of expenses covered. Once you reach that amount, consider options for investing your money to create additional income.

Your exact strategy from this point forward will vary depending on your risk tolerance (in terms of investing and savings) as well as any large purchases you see in your future. Instead of resulting to credit, try to save enough in cash to pay for what you need. Or, if you do use credit, begin your Debt Snowball or Debt Avalanche again until you are once again debt free.

This is a resolution you can maintain indefinitely and is certainly a great one to carry forward year after year to ensure your financial house remains in order for this New Year and everyone after.

buy now

Buy Now, Pay Later: The Risks of Delaying Payment

Buy now, pay later deals sound great on the surface. Consumers can get what they need (or want) without immediately having to manage repayment. But the deal comes with a catch if you don’t handle the debt fast enough. And it will hit you straight in the wallet.

As reported by the BBC, failing to repay the full amount by the agreed upon date means you owe all of the accumulated interest based on the original purchase date. And it shows up on your statement all at once. To make matter worse, interest rates on these debts are often higher than traditional credit card options.

Catalogue and mail order systems are a common source of this kind of debt. Local charitable organization Citizens Advice works with thousands of 20-somethings struggling with these “buy now, pay later” deals.

How Buy Now, Pay Later Works

For those who haven’t encountered this shopping paradigm, here are the basics of the “buy now, pay later” system.

First, a customer selects an item and agrees to the terms. Then, the buyer is regularly billed for the purchase and is not subject to interest if the items are paid-in-full before the deadline. However, paying the debt off isn’t required during that period. And this is where the trouble begins.

If you manage to pay off the debt in the allotted time, then no interest is owed. You get the item at the initial purchase price and that is that. However, if you fail to pay off even £1 before time runs out, you owe all of the back interest. In some cases, the interest charges are larger than the original purchase price of the item. And a debt of that size is often quite a shock.

Financial Regulation

The Financial Conduct Authority (FCA) is reviewing the terms associated with catalogue debt deals. This includes inquiries into the high costs linked to these forms of short-term credit as well as how thoroughly the programs are explained to borrowers. Additionally, questions regarding the performance of affordability checks and any debt collection methods in use are being investigated too.

Citizens Advice hopes that clearer explanations would help consumers avoid bill shock if they fail to repay within the time period.

What Consumers Can Do

Consumers concerned about catalogue purchase debt have a few options. First, review any current catalogue debts on which you are paying. Note any due dates regarding when the interest-free period ends. Make every effort to repay on time to avoid the interest charges.

If you’re considering a catalogue purchase, review the associated “buy now, pay later” terms carefully. Make sure you understand how long the interest-free period is and how much you need for each payment to avoid interest charges. When possible, pay the debts off faster to ensure your plan to avoid interest doesn’t derail.

For those who are concerned about repaying the debts before the deadline, then catalogue shopping isn’t right for you. Instead, work on saving for the item you want to buy, and purchase after you have the required funds.

The easiest way to manage debts is to avoid them in the first place. Your financial life is in your hands. Take care to protect it whenever possible.

holidays

Don’t Go Broke During the Holidays

Many people feel the pressure to spend during the holidays. It is a traditional time to give gifts and cook extravagant meals, but you don’t have to go broke in the process. Instead of spending everything you have, or taking out a loan to pay for everything, choose another way.

If you are looking for ways to enjoy the holidays without spending everything you have, here are some tips to get you started.

Start with Your Time

One of the best parts of the holidays is time spent together. Whenever possible, spend time with those for which you care. You can catch up with friends over a cup of tea at home. Or visit a local park and spend the afternoon. Even a movie at home can be a great activity to share with others.

The point is, you don’t have to spend anything to enjoy each other’s company.

Consider a Trade

You aren’t the only person feeling financial pressure this time of year. If you and your friends are short on cash, consider working out other trades. For example, trade babysitting duties with each other, trade hosting duties for regular dinners. Again, there is no need to be extravagant. Sometimes, it’s just nice not to have to cook one night, regardless of the meal being had.

If you each possess different skill sets or knowledge bases, use those to strike a deal. Maybe your resume writing skills could help a friend, while their sewing abilities can save your favorite shirt. Traditional gift exchanges are trades at their core, so don’t be afraid to use the idea without having to spend to do so.

Call it Off

Gift giving often includes the pressure of reciprocity. If you don’t have it in your budget this year, just let the other person know. Explain the situation, and let them know that you would like to skip the exchange. If they are having financial difficulties too, they may consider a release from a perceived obligation more than anything in the world.

Or Simply Delay

Sometimes, you have the ability to give, but it’s hard to shop for everyone all at once. If that is the case, see if you spread out the celebration. For example, schedule gatherings for the first weekend or two after Christmas. That way, you can give yourself a little more time to purchase suitable items, lessening the financial strain.

Stay Away from Debt During the Holidays

It is tempting to simply acquire debt to pay for the gifts you think you have to buy. However, you can be stuck paying off that debt for weeks, months, or even years after this holiday season has passed. And, even if it gets you past this year, what are you going to do next year?

Debt can be a vicious cycle, even when you had the best of intentions when you used the money. Before you stretch yourself too thin this holiday season, consider the ideas above and see if you can’t find a better way. You may find out that your friends and family are just as happy to look for alternatives to the spending tradition.