Loans Scotland

With the savings ratio at an all time low, and more and more people struggling to balance bills at the end of the month, the government is asking what is to be done to improve people’s management of their finances.

Proposals to integrate financial education into secondary schools sounds far too little - a question of violin playing while Rome burns. Furthermore it will have no impact upon the millions of adults who have this problem now. Free financial advice lines from the government might do a little, but are more likely to be used by people in crisis and not as the basis for fundamental design of people’s financial planning.

Perhaps a more radical solution might be to not allow financial companies to extend credit willy nilly to anybody who approaches them since it is abuse of credit that seems to cause the most problems. Once a consumer is on the credit mill just about everything else disappears out of sight such as pension planning and planning for the future.

At the heart of the problem is the nation’s addiction to satisfaction now whatever the cost and a belief that owning a house will solve any problem. Looking at the US housing market implode this year is a timely reminder that housing is not a financial services product and that a balanced portfolio is still the best solution to long term planning.

1.7 million people had debt problems in 2006/07 according to charity Citizens Advice, this shows that not only the US has a credit problem

It’s scary how much debt people on average are getting themselves into and of course, debt levels vary widely across the UK. So here are a few easy tests to see how far down the debt path you really are:

1. Wages spent before the end of the month?

Learning not to spend more than you earn each month can take time especially if you have racked up several credit cards over the years. The first lesson is don’t spend more than what you earn. Don’t be tempted to always buy now, sometimes the best things are worth waiting (saving) for!

2. Using your Credit Card for Christmas?

So maybe this year is a good year to set a proper budget for each person you have to buy for. Don’t be tempted to go shopping without a list of people you have to buy for. There are also some great deals on 0% transfers so make sure you are taking advantage of them.

3. Paying your bills using credit cards

It’s quiet worrying how many people have paid their mortgage using a credit card. Your mortgage should be the first thing you pay each month, not the last. Its an extremely expensive way to pay for your home and also in many cases can be a slippery slope that’s difficult to get out of.

4. Repay more than the minimum

Paying the minimum repayment on your credit card could mean you pay your mortgage of before your credit card. It is a always a good idea to try and clear off your credit card each month.

5. No savings?

Live today, forget about tomorrow is not a good approach if you want to retire. One thing is for sure the cost of living will continue to rise. The sooner you start saving the bigger the benefit especially with compound and interest.

Are buy to let owners speculators or investors who take otherwise undesirable properties, maintain them and provide a rental accommodation sector that local councils no longer provide?

As various experts ponder on the long term future of buy to let and also question whether the sector contributes to the economy or simply pushes up house prices, for many owners they see themselves as entrepreneurs who with few tax incentives take properties cheaply and then invest to make them available for rental.

Certainly markets like Edinburgh in Scotland have offered great opportunities to buyers with a huge demand for properties from renters and a steadily increasing price. How much of that is students and how much immigration is a very interesting question that should play out over the next few years.

One things buy to let owners should remember. They are largely viewed as speculators and so should not expect much support from politicians who are likely to see them an easy target for taxation. The latest changes in capital gains are not aimed at them, but at the same time nobody is crying for them either. Seatbelts, gentlemen!

Mysupermarket.com reports that prices for a basket of 25 goods has risen by an average of 12% over the past year which equates to an extra £750 extra per year for the average household.

Debtbusting solution? Buy less, buy with more frequency, and buy more carefully.

A visit to the supermarket and a scan of the trolleys around you reveals an inordinate amount of poor quality food being bought and also in large quantities by the average household. If these same people were to eat less then bills would go down. It is not a question of requiring supermarkets to reduce prices as typically they squeeze farmers and suppliers rather than themselves; it is a matter of us the consumer eating and buying less. With the UK the most obese nation in Europe, that can only be a good thing.