Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
8 Money Questions You Should Know the Answers To
Reading Time: 6 minutesAt MoneyMagpie, we’re always receiving loads of money questions and queries from our readers! We love being able to help you out with all your finance-related worries. We’ve compiled a list of key money questions you should know the answers to. It covers things from dealing with debt to investing in the stock market. We’ve got you covered with a range of tips and starting points to help you become more financially stable.
Here’s the 8 money questions to ask yourself!
- Do I Spend More Than I Earn?
- What is My Credit Card Balance?
- How Much Debt Do I Have?
- Am I Paying More For Anything Than I Need to Be?
- What Happens to a Mortgage If You Split?
- Should I be Investing on the Stock Market?
- Is Paying for a Warranty Worth It?
- More Money Questions
Am I Financially Prepared for an Emergency?
If 2023 has taught us anything it’s the importance of being prepared for an emergency! It’s hard to know exactly what you will need until the time comes, but 3 – 6 months of necessary spending is a good guide. You need the money to be in an easily accessible savings account, ready for when you need it.
However, it’s a fine line between having enough and putting too much in there. Interest rates on savings accounts are shockingly low at the moment. In fact, interest rates are lower than the rate of inflation, so if you over-inflate your emergency fund, your money will slowly be losing value instead.
As well as having an emergency fund, do you have an asset you could borrow against if you had to? It’s not always as an ideal solution, but it can save you from the larger cost of getting a personal loan or using high-interest credit cards.
Do I Spend More Than I Earn?
You may think you don’t, but there are a shocking number of Brits who regularly spend more than they earn. According to research by the Office for National Statistics, on average each UK household spent £900 more than they received in income in 2017 alone. The problem for many people is that they’re simply unaware of how much they’re spending!
Due to cards and contactless, it is so easy to lose track of how much you’ve spent. The best way is to create a regular habit of checking your bank statements and monitoring where your money goes. Take some time to sit down with your accounts and face reality. How much do you actually earn? Once all your living costs have been taken out, how much do you have left? Create a budget and stick to it! Your finances dictate the lifestyle you can afford to have, not the other way around.
what is My credit card balance? (and what are the interest rates on it?)
Credit cards are great when they’re used properly, but they have made it far too easy for us to overspend without a second thought! Only purchase something on a credit card if you know you’ll have the funds at the end of the month to pay it off. However, life sometimes does throw surprises our way. There may be a month when, for some reason, you might not be able to pay the balance off in full. In preparation for this, make sure you’re aware of your credit card interest rates, how much it’ll cost you, and always use the card with the lowest APR if you might not be able to pay the full sum.
Remember to monitor you balance carefully to make sure you’re staying on top of payments. Find out more on how to use credit cards to build your credit score here.
how much debt do I have? And How to Pay It Off
Debt can be overwhelming and if you don’t stay on top of it it can easily spiral. When asked, a lot of people tend to underestimate how much debt they really have by 25%. UK citizens actually owed £1.6 billion in debt at the end of January 2020. While the average debt total (including mortgages) per adult was £31,845, higher than the average annual income.
Prioritise your debts by paying off the ones with the highest interest rates first, or think about applying for a debt consolidation loan. Check out our article How to Stop Debt Overwhelming You for more information, and see what MoneyMagpie founder, Jasmine, has to say about paying off debt below:
Am I Paying More For Anything Than I Need to Be?
Recurring expenses are something that we don’t think about often. They just come out of our account automatically without us ever paying much real attention to them. Meaning plenty of us are left paying for products and subscriptions long after we still need them, simply because we forget to cancel.
Go through your accounts carefully and question every expense. If you’re not using something anymore, or not using it enough – cancel! You’ll obviously still have things you’ll need to continue paying for, like insurance. But it’s always worth negotiating with your provider to try and get a better deal. Never simply auto renew a policy – you can almost always get it cheaper.
What Happens to a Mortgage If You Split?
Sadly, many people who do get mortgages together, whether friends or partners, do end up going separate ways. Knowing your options in advance can help you to prepare for the worst case scenario, as managing a mortgage in a break up is no small feat.
The key thing to remember is you’re both liable for all repayments. A mortgage provider doesn’t care about your personal life, so just because your partner is no longer paying their share it doesn’t mean they’ll let you only pay half. If you fall behind on repayments it will negatively impact both your credit scores.
The options you have are:
- Sell the house – Pay off whatever remains of your mortgage and split the rest of the money. If you’re in negative equity (when the value of your house falls below your mortgage balance), then you’ll have to divide the outstanding debt between you.
- Buy the other partner out – If you can afford to, one of you could buy out the other. However, you will have to prove to your lender that you can afford to continue the repayments on your own.
- Keep a stake in the property – Buying a proportion of your partner’s stake is an option if you can’t afford to buy their whole share. This way, one of you would own most of the property but the other could keep a stake in the home. They’d also be entitled to a percentage of the value if the house is sold at a later date.
Find out more about how to handle this situation in the video below:
Check out How to Prepare for a Post-Lockdown Divorce for more details, too.
Should I be Investing on the Stock Market?
This is one of the money questions we hear a lot, and the simple answer is yes. Everyone who can afford to do so should be investing – even if it’s just £10 a month. Really, investing is the best way to save for the long term. Interest rates on savings accounts are shockingly low so investing is the only real way to see a return on your money.
To a beginner, the stock market can seem overwhelming and rather daunting. How do you get started, or even know what to do? Read 7 Investment Tips for Stock Market Beginners for all the help you’ll need on making the first step.
Is Paying for a Warranty Worth it?
You’ve bought something nice and new and you want to protect it – that’s completely fair. The trouble is, a lot of warranties don’t actually give you that much for your money. In some cases you might get a couple of extra years, but we’ve found cases where an extended warranty cost over half the price of the product itself. And you may never end up using the warranty!
Instead, if you have contents insurance, check whether your items will be covered on that policy. What’s the excess? It’s often cheaper than the cost of a warranty. It’s always worthwhile checking as there’s no point paying to cover the same thing twice.
Also, if you are considering paying extra for a warranty check with the manufacturer and retailer first. Many manufacturers guarantee their products for a minimum of 12 months, with some up to 2 or 3 years and plenty of retailers often have their own guarantees as well.
Jasmine tells you what she thinks about paying for warranties in the video below.
Read Your Rights with Guarantees and Warranties – What You Need to Know for more advice.
More Money Questions
If you have even more money questions, why not head over to our messageboards where you can ask away and also find plenty of help from fellow readers.
Or check out one of our detailed articles answering different questions below:
- Do You Need Income Protection Insurance?
- Should You Invest in Penny Shares?
- Should I Save or Pay Off Debt? How to Decide
- Are Consolidation Loans Worth It?
*This is not financial or investment advice. Remember to do your own research and speak to a professional advisor before parting with any money.
How can I best save money on utility bills?
Good question Erica as there are quite a lot of ways. Firstly, of course, it’s a good idea to switch your gas and electricity to a cheaper provider. Happily, as the oil and natural gas prices have been going down a LOT, it’s likely that you will quite easily find a cheaper deal than you have right now. Take a look at our comparison here https://www.ukpower.co.uk/wl/moneymagpie and see if you can save yourself at least £200 over the year. Frankly, with prices coming down as they are, you should be able to save even more. Then it’s a question of… Read more »
How can I avoid being scammed online – what are the things that I should be looking out for?
Good question and there isn’t one answer. There are various things you need to do, including keeping yourself up-to-date on the latest scams and viruses. There are new ones being created around the world every day (these people really need to get a life!) so we need to be aware of what’s coming at us in order to defend ourselves online! Check our Rip-off Britain blog for the latest scams and frauds – offline as well as online – here https://www.moneymagpie.com/save_money_categories/rip-off-britain. Also, as a rule of thumb: – never open attachments if you don’t know the person who is emailing… Read more »
I want to know if recycled ink cartridges are safe to use on a computer printer or is it just asking for trouble and will it reduce the life of my printer?
Good question – this is something we have wondered too! I have asked Geoff Adams-Spink (he writes for our Technology Blog https://www.moneymagpie.com/save_money_categories/technology-and-transport and this is what he says: “My instinct is not to. This has been confirmed by Jenny who works for me part time and who used to work for Staples. Apparently, if you use recycled ink cartridges, you void any warranty you might have on the printer. Jenny thinks that they are better value for money but there is a risk involved.” So possibly worth it if your printer is old but if it’s relatively new it may… Read more »
I have a pension but its about to undergo some pretty major changes. Who can I go to who is completely independent and with no vested interest to explain my options to me?
Hi there H,
I’ve checked with the nice people at the DWP and this is what they’ve sent me:
“I assume that it is her private / workplace pension – rather than the state pension (which is due to underdo changes from April next year).
If so I would suggest TPAS http://www.pensionsadvisoryservice.org.uk/
Or possibly her union if it is a workplace pension
Or https://www.moneyadviceservice.org.uk/en
If it is her state pension, gov.uk has all the info
https://www.gov.uk/yourstatepension?gclid=CK6cgOmX38MCFWNz2wod9G4AwQ”
When should I start my pension
No time like the present!
If your employer is offering a company pension then go for it because they add in money on top of your contribution.
Really, the earlier you start contributing to a pension the better as your money grows over time, thanks to the power of compound interest.
In fact, the BEST time to invest in a pension is when you’re a baby! If you have children, consider this as a good investment for them.
So yes, the earlier the better. Do it now!
How can I rent a flat without paying exspensive fees?
Do you mean you want to rent a flat to live in or you want to rent out your flat to someone else? If it’s renting a flat for you to live in then most of the time you shouldn’t be paying expensive fees to agents or anything. Usually it’s the person renting out the flat who is paying. Still, it’s worth checking online at websites like Gumtree, Spareroom.co.uk and, if you’re just looking for part-time renting, Mondaytothursday.co.uk. If you’re renting your flat out, to avoid fees it’s best to 1) Try to rent to someone that your friends know.… Read more »
How do I de-register as self employed? It is more than a year since I closed my business, and although I am not earning anything I still have to pay National Insurance contributions as my request to stop paying them has been turned down.
Jane I checked this with Mitch Hahn from Nordens.co.uk and he said: “You must tell HM Revenue and Customs (HMRC) if you’ve stopped trading as a sole trader or you’re ending or leaving a business partnership. You’ll need to send final tax returns and tell employees that you’re closing your business, once this is taken care of you can now advise HMRC that you have ceased trading by completing an online form (a link to which is below). https://online.hmrc.gov.uk/shortforms/form/CeaseTrading You stop paying Class 2 National Insurance contributions from the Saturday following the date you stopped self-employment. You need to write… Read more »
I have a student loan but should I pay it off?
If you’re employed and you’re earning over £21,000 a year, some money will be deducted from your salary every time you’re paid, to pay off your loan. So you will already be paying off some of it at least, that way. However, as to whether you should pay off more than that here and there, I think the answer is that on the whole it’s best to ignore it, so long as you have other things to save for or pay off. So if you’re making a decent amount of money right now, you might want to save it to… Read more »
What’s the best way to earn some extra income without it affecting my tax credits?
Firstly, it’s good to know what the threshold is for tax credits. Accountant Oscar Ip says “There is a £300 limit shared between you and your partner if you claim tax credits as a couple from following and it won’t count for tax credits purposes: – Income from your savings eg gross interest – Investments such as company dividends – Pensions – Income from property – Income from trusts, settlements and estates – Foreign income” Also it’s worth remembering that the Rent-a-room scheme income below £4,250 is tax free and does not need to be declared. Selling junk on eBay… Read more »
What benefits does a pension provide over other savings/investment options?
Primarily it’s the tax saving. When you pay into a pension the government adds in the tax you would have paid on that amount so your pot immediately grows. If you’re on basic tax rate, for example, for every £80 you put in, the govt adds in another £20. With ISAs, you don’t get that tax saving, but what you do get is tax free earnings on the money you put in, whereas with pensions you have to pay tax once you start to draw them. With pensions, also, you are forced to be disciplined and not take the money… Read more »