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Student loans – how to keep your debt down (SOLVED)

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University living comes with numerous stereotypes: living in squalor, eating baked beans out of a tin, and partying hard until the sun comes up.
But the reality is that gaining a degree, and living at university, come at a price. It’s a very lucky student who doesn’t need to apply for a student loan, and the vast majority of students take out a sizable loan from the Student Loan Company, before paying it back through their salary once they’ve graduated and our working.

Overall, student loans are having a huge impact on economy and politics as Nick Hillman discovers in his article on student loan history. While this isn’t too bad an option for individuals – student loans have a low interest rate and the automatic payments through salary make it easy to forget about, it’s still a debt. And, as such, there are things you can do to keep the debt as low as possible.

Living on a budget

There is a huge temptation at university to blow your student loan on having fun. When you’ve just received your loan installment for the term, and so have your friends, and you’re not used to having a four-figure sum in your bank account, it’s easy to give in to temptation and go wild.
But remember, that figure is to last you all term.
First things first, come up with a budget. Work out how much you’ll need each month on everything, including for food, for toiletries, for travel. There are many ways you can save money and this article on budgeting teaches some good lessons in frugality. Include a sum in your budget for going out – nobody is going to tell you not to enjoy your university experience, but don’t blow your loan on nights out that you won’t remember. At the end of each month, put the money remaining from your budget onto your debt – whether this be an overdraft, a credit card, or, if you don’t have either, onto your student loan by phoning up the Student Loan Company and making a payment.
Sensible living at university is often difficult, there’s no denying that, but it’s essential if you’re committed to managing your finances.

Know what you’re entitled to

Many universities offer grants and bursaries to students who are short of cash, and you could well be entitled to a sizable grant to help you get by. Speak to your university – don’t just assume you won’t be entitled to anything. You’d be gutted if you found out you were but it was too late!

Supplement your income

University offers a great chance to get a part time job, because of the plethora of cafes, bars and clubs, as well the usual city offerings of shops and services. Your university is almost certain to have a careers office, and maybe an online service, where the university itself as well as local businesses will advertise part time jobs to students.
There’s also the added incentives of meeting new people and making new friends through work, as well as gaining real life work experience.
If you do get a part time job, make sure you keep track of tax payments. You’ll only need to pay tax if you earn over £8,105 in the tax year – although, paying the tax and then claiming it back (which is easy to do) is a good way of saving.

Use your vacations wisely

Many students find themselves twiddling their thumbs during their long breaks from studying. And, while the idea of staying in bed for three months sounds great at first, it inevitably leads to boredom.
Summer, Easter and Christmas breaks are all great opportunities for students to earn a sizeable amount of income by working full time. This is definitely recommended, but make sure you’ve got time for the essays and assignments you’ll most likely have to complete too.

Prioritize

When it comes to paying off your student debt, make sure you know which debt is the most important for you to get rid of. Most students have more than their student loans; they also have overdrafts and credit cards, either through poor financial planning, or simply necessity.
The likelihood is that your credit cards and overdrafts will have larger interest rates than your student loan, so make sure you concentrate on paying these off first. They’ll also affect your credit score if you miss payments.

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Home Financing for First Time Buyers (Solved)

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Financing the purchase of your first home can be a daunting prospect at the best of times. But first time property buyers are finding that today’s fluctuating property and financial markets are making funding the purchase of a first home more difficult than ever.

Rising house prices have necessitated the raising of larger deposits, and first time mortgages have fallen in number. In addition, lenders have become more wary, which means financing a home has become even more difficult for people with poor credit.

With all of this in mind, if you’re considering purchasing your first home it’s absolutely imperative that you are aware of, and understand, all of the financing options which are available to you. In this way, you will be much more likely to succeed in making that first step onto the property ladder.

Securing a Deposit

For a first time buyer, finding a deposit will be the initial hurdle to overcome. The bigger a deposit you have, the more competitive a mortgage you will be able to take.

If you have no savings, you may be thinking about taking out a loan to cover the cost of your deposit. This can be a great idea, providing you have the income to back it up. But even if you don’t, many first time buyers are finding that they can raise the necessary funds by asking relatives to take out secured homeowner loans. This type of loan often comes with a lower APR when compared with some other forms of credit, and can be a fast and easy way to raise a much needed deposit, for further details on homeowner loans click here.

Similarly, many first time buyers opt for a guarantor mortgage, which involves another person providing your lender with extra security by acting as a guarantor for your mortgage payments.

Finding a Mortgage

There are a small number of mortgages available which have been specifically designed to help first time buyers onto the property ladder, including low deposit mortgages and Save to Buy accounts from banks and building societies. In fact, over the past few months lending has increased for first time buyers, providing many with first time buyer mortgage options that wouldn’t have been viable – or available – even a year ago.

One of the most important parts of securing a mortgage for your first home is deciding on what kind of mortgage would be right for you. Options include:

  • Variable
  • Tracker
  • Fixed Rate

All of these options have their benefits and their drawbacks. For example, fixed rate mortgages are straightforward and will allow you the opportunity for better budgeting, because you know exactly what you’ll be paying for a certain period. However they can involve costly penalties in the event that you want to repay early. By contrast, variable and tracker mortgages are more risky because rates can go up and down, but come with more flexible repayment options.

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Winners and losers in the great state pension shake-up

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Until recently, retirement for millions of people in the UK meant having to rely on a complicated state pension where they would get little over £100 a week to live on. However, if proposals from the government are signed into law, by 2017 the basic state pension could be worth as much as £144 per week for those who retire from that point onward.

Less money worries?

Right now, the current state pension system is hard to understand for many people who are at or near the retirement age of 65. They have to work out how much they have paid in National Insurance contributions before they know how much money they’re entitled to, plus there’s possible income from annuities or other pension products to take into account.

The simplification of state pensions is seen by many as long overdue. Retirees will soon find it easier to know what they stand to receive (if they have made NI payments for at least 10 years), but what else could the great pension shake-up mean aside from more money?

At the moment, it’s easy to be confused about the details of pensions. Highstreet Wealth Management can assist with transferring pensions and can also provide you with clear information and advice you’ll need to go through the pension process. With auto-enrolment being enforced in every employing company in the next five years, it’s a better time than ever to look up exactly on what a pension can offer you.

Varying benefits

The new-look state pension will benefit some people more than others. Those currently receiving state pension payments will be unaffected, but for those due to reach retirement age by 2017, they can expect:

  • To qualify for the full amount, claimants must have made 35 years’ worth of NI contributions
  • Broadly known as a ‘flat-rate’ pension, the maximum payment is £144 per week, although some will receive less due to paying less NI
  • Some higher earners who have paid into a workplace pension scheme won’t receive additional benefits from top-up schemes
  • Most additional pension payments from workplace or other schemes will still be received in full
  • The state pension age for women will rise to 65 
  • Those who reach retirement before the changes come into place can’t wait until that time and take out the new state pension
  • Anyone on a final salary scheme may have to pay more in NI per year due to their level of income
  • The flat-rate pension seems to be a good idea, not least because it could spell the end for confusion over pensions. Whether or not it will work is a question that’s yet to be answered, but any move made to benefit retirees will surely be welcomed.
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The History of Checks as a Form of Payment

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I’ve always been the curious type, so when somebody asked me “where do checks originally come from?”,So I began to look into it, and discovered quite a bit about the history of paper checks and the role they continue to play in the modern world.

Cheque

A long time ago, if you can believe it, people didn’t used to pay for things with cash. Most economies were run via a system of trade goods, and eventually currency in the form of coins became popular. As much as I would love to own a swimming pool full of gold coins just like Scrooge McDuck, going out for a day of nails, hair, and spa treatment in a world operating solely on rare-metal currency would be anything but relaxing—in fact, it would probably closer to an all-day chore—because of the sheer amount of coin that I would have to carry around.

I know plenty of people that don’t even like carrying paper cash around in their purses/wallets, and paper cash is no burden to carry. It’s a matter of security for them, because they don’t want to lose the money that they have on hand.

The first instances of checks seen in history were created exactly for these reasons. From the Persian Achaemienid Empire that spanned 550—330 BCE came the first recorded usage of checks, called “chek” in the native language. In India from around 320—185 BCE an instrument called the adesha was used very similarly to the way that we use checks today, and Romans began using what is called praescriptiones in the first century BCE.

Checks became even more popular in both the Muslim and Christian worlds, especially when trade between the two became widespread. Because large sacks of coin weighed down transport livestock and essentially presented big targets for bandits that were accustomed to attacking trade caravans, these long trips required that some kind of checking system be put in place. Muslims introduced the saqq, while Christians and the secretive Knights Templar introduced their own checking system.

The Knights Templar set up “houses”, which were essentially banks, that travelers could deposit currency into and then withdraw at a different location by showing the house a draft. Drafts are particularly interesting because of the way that they were drawn up—unlike regular checks that display the name of the recipient and amount in plain text, the Templar’s drafts were written in a complex code that only the Templars and Nicholas Cage in National Treasure would have been able to decipher.

Some form of check eventually shows up in almost every civilization’s economy, and checks are still being used today. Technology has obviously made the system of distributing, clearing, and even personalizing checks not only more available but, some cases, possible. So the next time you’re out for a day with your girls getting your hair and nails done, be thankful that you don’t have to carry around a giant sack of coins and can just pull out your checkbook instead.

Annie Harrington is a small business owner and freelance writer. Outside of work-life, Annie revels in design and the design process. She currently works with Vista Print, a company that specializes in creating business cards and ordering checks.

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