Is it Better to Rent or Own a Home?

It can be really difficult to know whether it is better to buy or rent a home. There are advantages and disadvantages to both and it is good to be aware of them so that you can decide which will be right for you. Some people may be in the situation where renting will benefit them more and others where buying will benefit them more.

Cost of Rent/Mortgage

The cost of both renting and mortgaging are often determined by the interest rate generally. Obviously, some areas will be cheaper than others due to desirability and the size of the houses will change the cost too, but this will be the same with renting and mortgaging. It is easy to assume that the interest rate will only impact the cost of the mortgage. However, many property owners are paying mortgages too and so if interest rates go up they will put rents up to cover that increase. However, when interest rates are really low, this perhaps will not make much of a difference. As property owners tend to be covering a mortgage as well as costs of maintaining the house you are renting, you may find that renting is actually more expensive than paying a mortgage. You also need to consider that once you have paid off your mortgage you will no longer have to make payments, but you will always have to make rental payments. So, if you can get a mortgage, then it could be worth investigating the costs to see whether it is worth you considering switching over.

Cost of Repairs/Maintenance

When you own a house the cost of any repairs is down to you to pay for. This is also true of any decorating that needs doing as well. The cost of this will vary depending on what state of repair your home is in. If you rent a house, the landlord will pay for these things. This means that you will not need to worry about the cost, but it could mean that repairs are not done very quickly or are not done at all.

Flexibility to Move

If you own a house, then you will be tied down. If you want to move to a different part of the country or to a different country you will need to sell the house before you can move or alternatively, rent it out and rent something yourself. It is much easier to be flexible when you are renting as you can hand in your notice and move within a few months normally.

Flexibility to Change Home

If you are renting a home you cannot make big changes to it. It is likely that you will need to paint it in neutral colours and will not be able to change anything or update anything. If you do any of these things you may have to pay for them yourself or get your landlords permission. If you own a home, you will be able to make changes. You will be able to do what you wish with your home and extend it, convert rooms, update it and paint whatever colour you like. You might like the idea of having this flexibility.

It is important to think about what you think will work best for you. Consider the pros and cons and what you think might suit you. It might be that it is better to start off renting and then settle down once you have a family and need to be near a good school or to your work. There is a lot to think about as buying a house is a big commitment but it can also be very rewarding.

Is it Financially Viable to be Married?

People decide to get married for all sorts of reasons but finance is not normally part of the consideration. However, there are a lot of marriages that break up due to financial reasons and so it is something which should be considered carefully. There are also some advantages and disadvantages financially to being married as well.

Married Persons Allowance

If one person in the couple is earning below the tax limit and the other is paying the lower level of tax then they can ‘borrow’ a bit of their spouse’s tax allowance and pay a little less tax. The allowance is not worth a fortune but it could make a difference and why turn down free money! You will have to claim this, it is not sent automatically so it is worth checking out the government website and looking for the details so that you can check if you qualify and find out how to make a claim.

Borrowing for a Mortgage

If you want to buy a mortgage then having two incomes will make a big difference when you are applying. You will be able to borrow more money and repay more so it should enable you to get a better choice of mortgage. You do not need to be married though, to have a mortgage together, even friends or siblings can do this and so in this case marriage will make no difference.

Benefits

Again, whether you are married or simply living together, there will be no difference with regards to benefits apart from the married persons allowance mentioned above. The benefits that you are entitled to will depend on the income of the household and so whether you live with your marriage spouse or a partner, it will make no difference to what you can get.

Sharing Costs

Living together, whether married or not does have financial benefits. If you have one house together rather than two separate ones, your bills will probably be less. You will be able to share the costs of the utilities, rent, council tax and insurance and it is likely that you will not be sharing a home that is significantly larger than where you lived in before so you should be able to save some money.

Credit Record

If you share financial documents with someone else then this is reflected on your credit record. This meant that if you have a joint bank account, joint names on a utility bill or something like this then if one of you has financial problems, this could get flagged up on the others credit record. Again, this is not necessarily going to just happen to married people though as it can happen to anyone who shares joint liability for something. This means that you need to be careful with what you put your name on. Unfortunately, sharing an address could also implicate you so there maybe no escape from the association with someone with credit problems anyway.

Disagreements

Most disagreements about financial matter has a few simple reasons. It might be that the couple cannot agree on how money is spent or that one is keeping money problems secret form the other. Discussing things carefully and making sure that you come to agreements that you both agree with could be a great step in ensuring that your marriage or relationship is not negatively impacted by money. Operating joint accounts where things can be clearly seen can also help with this, although some people do like to have some money independent of their partner. Make sure you are upfront about this and come to a decision about money which suits you both.

When Should I get a Pension?

Most people tend to enter retirement with some sort of pension. Some people just rely on the government pension but many do not realise that they have changed and you have to pay in for a long time to now be eligible for one. It is worth checking out the gov.uk to understand how this works. You can also log in and find out how much you will be eligible for. Even if you are entitled to a full government pension it is not lots of money. It is therefore worth considering alternatives. Many people get a secondary pension and these are something which different people get at different ages. It is good to have a think about when might be the right time to get one.

As Soon as you Start Work

If you work for a company with more than a few employees they will have to join you in to the company pension scheme. This is well worthwhile, as they will usually pay in as well as you and you do not have to pay tax on money that goes into these pension schemes. Therefore, you can start saving some money up for retirement right away. The sooner you pay in, the larger the pension pot will be when you want to start taking money out and this will mean that you will have more money to see you through your retirement.

Once You are Earning a Decent Amount

You might decide that you want to wait until you are earning a decent amount of money before paying into a pension. You may fear that if you use some of your salary towards your pension, you may not have enough left for everything else that you need. This is an understandable concern and we often have a lot of things to pay for in younger adulthood. We may be saving for a deposit, paying a mortgage, repaying any same day loans you may have taken out, building up savings, paying for a family or all sorts of other things. These costs can all add up and we may find that we need to save as much money as possible for these things. We may just not have enough left to contribute towards a pension as well.

There is a lot to learn about pensions.

Once Your Children have Grown up

If you have a family then they will be expensive and so leaving paying in a pension until then could seem like a good idea. You should have more money available to you and therefore be able to afford to make the contributions. However, some children live at home for a very long time. Some need financial help when they leave home and there might be grandchildren that need help as well. There is even the chance of ill -health and no more earning potential as well. It could be a risk leaving it this late.

Near to Retirement

Once you get near to retirement you will have to put lots of money into a pension scheme in order to get a decent amount back out. This might not be possible as you may just not have the time to earn enough money. You may also still need to support your family or perhaps want to start winding down and reduce the number of hours that you are working. It could be far too late now, unless you have managed to take on a job that pays far more money than you actually need.

So, it is best to start by paying in as early as possible. It can be easy to think that you will have more money available as you get older, but we can not predict what might happen with regards to what our job will pay and what things we will need to buy. Therefore, it could wise to start right away. Even if you can only put a little bit of money in, it will all add up and this will mean that you will be able to accumulate quite a significant pension pot once you have retired.

Is it a Good Idea to Buy Shares?

We will often hear about people buying shares and might wonder whether we should buy some for ourselves. It is not a decision that should be taken lightly though and it is well worth finding out more about the risks first.

You Could Lose Everything

We often hear all of the good things about shares. We hear tales of people making loads of money and selling their shares and making lots of money. It is worth making sure that you understand that in order for the possibility that you could make lots of money, you could end up losing all of your money. This might seem odd as we are used to putting our savings into a bank and then taking it back out when we want to spend it and being paid interest on it. Shares are very different though as we are buying a part of a company. If the value of that company drops then our shares in it are worth less money and vice versa. This means that we are relying on the company doing well. The stock market will also fluctuate generally and that might have an impact on what your shares are worth.

You Need a Lot of Money

When you buy shares you often need quite a bit of money. It is often the case that it is not really designed for individual investors and so the amount that you need to buy is high. This will depend on the company you buy through though. You may find that there is a management fee and this will mean that if you do not have a large holding, you will not make enough money to be able to cover that fee.

Only Invest What you can Lose

As you should only invest money that you can afford to lose, then finding a big lump sum can be difficult. You could find that you do not have that much money that you can afford to lose and therefore do not have enough to invest. Even if you do have enough money, you might decide that you are not willing to take the risk and would rather put your money in a safe place anyway.

You Need to Invest for a Long Time

The stock market fluctuates up and down. This means that you will find that the value of your shares goes up and down a lot in the short term. In order to allow for this, people are advised to keep their shares for at least ten years. Hopefully, this will help to allow for any fluctuations and hopefully will mean that your shares will go up in value. This is a long time to keep money tied up though and you might want to use it before then so it might not be wise to tie it up like this.

So you can see that there is a lot more to think about when you are buying shares than when you are choosing a savings account. Of course, savings accounts do differ a lot as well, but the risk is minimal which means that if you do make a mistake it is easier to rectify. You may decide to tie your money up in a savings account as well to get more interest but at least you are guaranteed a rate of interest with this sort of account rather than taking a risk that you may not even get all of the money you put in back again, which is the risk you take with shares. There is also a lot to learn with shares, they are more complex and it is good idea to do lots of research first.

How to Monetise Your Hobby

If you have a hobby that you really enjoy, you might wish that you will be able to do it all of the time. This is something which you could achieve if you di not have to go to work and earn an income! However, there are ways that you might be able to make money from your hobby and therefore you might be able to spend more time doing it and you could even give up your job in the end.

Make Items you Can Sell

Some people have creative hobbies where they make things. It might be that they bake, cook meals, paint, knit or whatever and therefore have an item to show for their efforts. It could be possible for them to sell the items that they make. It is easier to sell things these days with the Internet providing many different platforms and so it is well worth looking in to. You could try a few and then see if it takes off and whether it is something that you feel will make a good income for you. Of course, you will need to price it high enough so that you can make enough money to manage, but you will also need to stay competitive with others. It can be a bit tricky getting it right.

Set up a Website/Blog/YouTube Channel About It

There are a lot of people that set up websites, blogs or even YouTube channels about their hobbies. These can be really good and they can be an opportunity for you to talk about your hobby, share tips and generally help others that have a similar hobby. However, you will need to find a way to make money through this. You could use affiliate links – so you link to items and if you register with the company and use a specific link, you will be paid a small percentage commission for every sale that you link generates. If you can get enough people interested then you could generate quite a bit of money from it. You do have to let people know that the links you have are affiliate ones and that you could potentially get commission from them.

Teach it

Another alternative is to teach others about your hobby. Set up classes, either online or locally or write a book all about it. This could be a lot of fun and it could help you to make some money as well. Even if you are a beginner it can be useful to other beginners to have information from the perspective of someone else who is also a beginner.

When you are first setting up something like this, you will find that it will not bring in a lot of money. In fact, you may have to pay a bit out. But as you grow, you will be able to increase your income It can take a while and you will need to wait to see whether you can make enough to be able to give up your job and do it full time. It is a big gamble and not something that you should do right away. You may just be glad to keep it part-time and do it alongside your regular job so that you can increase your income, rather than give up your job and risk it going down. If you get to the point where you are very much in demand and you know that you can expand and make lots of money, this is the time to start to calculate to see whether it will be worth giving up your job to take it on full time.

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