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Payday loan apps and websites; the pros and cons

Personal loans have become a fast-growing financing option for consumers, with payday apps and websites gaining popularity. For aid between paychecks, payday loans can be very helpful for the pay cycle lull. Taking out a loan is not something to enter into lightly though, there are many variables that should go into your decision-making process. Here are a few pros and cons you should consider before taking out a payday loan

Pros:
Payday loans are named as such because they are basically instant. Once applied, your loan is usually processed and paid out on the same day. This is very helpful if you are in need of money urgently between pay, like a fine or surprise bill for example. For this reason, the loan amounts can often be quite high. Like any other loan provider, the quicker you pay the amount back, the more likely you are to receive a higher loan the next time around. These services track your repayments and can increase funds based on your credit history. Application for payday loans is extremely easy as they are based online. The process is very quick and many payday loan services have app options so you can apply on the go.

Cons:
Any loan you take out will affect your credit rating so it is important to really think about why you need the loan before applying. Frivolous loans can greatly harm your credit score which could make life difficult down the track. With the loan process on these sites, if you are unable to make a full repayment by the agreed deadline, further fees may be charged to you but will not be revealed until you are required to pay. These payday loans often have a high-interest rate due to their instant nature and repayment period.

Posted on 14 February '19, under money. No Comments.

Switching banks for your business

Businesses need to access finance with ease in order to sustain and develop themselves. Is your current bank still cutting it? Here are some indicators and tips to effectively assess your business’ banking needs.

Assessing your needs:
Evaluating and reevaluating your business’ financial needs is the first step towards choosing the right institution for your business. While drawbacks on customer service, high bank fees, or an increase in interest rates are clear red flags, you can also consider if your bank supports the direction of your business as it grows. That is, how will the bank affect your business if you choose to operate online? How will your bank manage a larger line of credit in the future? Does your business benefit more with a personal relationship with a small bank or the efficiencies provided by a larger bank? Consulting a financial advisor and developing a relationship early on can reduce headaches later on.

Choosing the right bank:
After identifying your business’ needs and possible trajectory, identify the key features you are looking for in a bank and be sure to have questions ready before meeting with bankers to compare effectively. Again, consider if the bank is flexible enough to meet your needs, and reevaluate services you have been paying for previously but may no longer need. For example, would an online bank work for your business?

Posted on 31 January '19, under money. No Comments.

Areas of investment you might not have considered

People and internal processes
Arguably one of the best forms of investment is in the employees you hire, and the talent, experiences and skills that come with them. Take the time to reflect the strengths and weaknesses of your business and where you can retain or invest in your people.

Yourself
Consider investing in a way that would help you earn more income in the future. Just as you would consider investing in your team, consider investing in yourself and your career. Between taking online courses to skill up, learning and networking at conferences, earning a certification in your field, pursuing higher education, and becoming more enlightened through books, audiobooks, and podcasts, the opportunities are at your fingertips. How can you make yourself more valuable to your business?

A side hustle
Whether you’re not earning as much as you’d like at your day job, or if you’re looking to discover an untapped passion or skill, consider making more out of 2019 with a side hustle. Not only would a side hustle help you reach your financial goals, but in the age of the ‘Share Economy’, the opportunities are growing. Options include selling old items online, renting out a room on Airbnb, tutoring online, working odd jobs, starting and monetising a blog, or selling your technical services.

Posted on 18 January '19, under money. No Comments.

Credit card do’s and don’ts

Credit cards are useful financial tools that can help you manage cash flow but can run you into debt if you are not careful. Before you swipe your first credit card consider the following do’s and don’ts, so you gain all the advantages without the headache of a tarnished credit rating.

Do’s
There are several actions you can take that will help you manage your credit card. Follow these rules:

Don’ts
Credit cards can accumulate debt with ramifications for your credit score and loan applications down the track. Avoid these standard blunders, so you do not end up regretting your credit card:

Posted on 29 November '18, under money. No Comments.

Tips to save money on office space

The expenses of running your office and paying for rent add up to a significant cost to your business. There are several key ways you should consider to reduce costs, without sacrificing conditions in your environment contributing to your employee’s productivity.

Consider the following tips to help you better your bottom line on your office space.

Get a second opinion
Another set of eyes and a fresh perspective will spot savings that may be hiding in plain sight. Get someone who has experience in running an office who will assist you by spending a day in an office and working out what is necessary and what can be culled.

Allow flexible working arrangements
Where it is possible and beneficial to both the employer and employee working from home is a great way to minimise the number of bodies in the office, and makes a smaller office space with lower rent a more viable option for your business.

Rent your office space on weekends
If you own your office space and want to find ways to finance your mortgage, consider renting out your office space when you are not using it. You could potentially rent it to organisations who run workshops or classes on weekends.

Negotiate a fixed fee
Certain office spaces will entice you with low rent options but your amenities costs like electricity, internet and water bills will be significantly higher. Including all the services that your landlord provides in and renting the actual office space in a fixed rate, will help you stay in control of your costs and avoid any nasty surprises when your bill rolls in for the month.

Posted on 30 October '18, under money. No Comments.

Haggle like a pro

When it comes to saving money on anything from home loan interest rates to new appliances for your house, haggling is critical.

Master some of the haggling skills below to reap some saving rewards.

Timing
If your timing is not right many of your haggling skills will be wasted. Make sure you are bargaining when the salesperson has adequate time to consider your proposal or when the appropriate moment presents itself. For example, negotiating in a fixed term of your contract have low prospects of success in comparison to when your contract is up for renewal.

Compare to competitors
If you have done your research and know who the relevant competitors are, you are on track to achieve the best deal. Many business’ price match or seek to beat their competitor’s on value so by being educated, you may get the two business’ to drive the price down while they compete for your business.

Be nice
Building a rapport with the salesperson is vital. Many forget that bargaining is a negotiation process and that coming in and demanding your price will not be effective. It is better to get the business’ representative onside so that they genuinely want to help you.

Talk to the right person
An employee higher up the corporate ladder is often the one who makes the calls. Cut out the middleman and speak to them if you can, as they are a more direct and efficient route to bringing in your purchase under budget.

Posted on 5 October '18, under money. No Comments.

Managing your working capital

Working capital is the money needed for day-to-day business operations and is often a measure of a business’s liquidity, efficiency and financial health.

To ensure your business has adequate working capital, the working capital cycle should be applied. The working capital cycle is the length of time from the purchase of inventory to the receipt of cash from customer sales.

The cycle comprises four elements: cash (funds available), creditors (accounts payable), inventory (stock on hand), and debtors (accounts receivable). Maintaining good cash flow requires control over each component. Ways to improve working capital:

Invoicing
To collect payments from debtors early, consider:
– establishing a credit policy
– invoicing early
– reducing payment terms
– stop supplying credit to debtors that do not pay
– following up on overdue accounts
– offering early settlement discounts

Inventory
Inventory can tie up a large sum of your working capital; reducing inventory through the just-in-time model can increase efficiency and eliminate waste. The just-in-time inventory model is beneficial as it allows for quick changes to customer needs and frees up working capital to better meet financial obligations.

Managing cash outflows
Managing the money you owe to creditors is just as important as managing your accounts receivable.

To ensure your cash outflow meets your obligations:
– consider early payment discounts
– prioritise suppliers
– ensure the accuracy of invoices before making a payment
– only make payments when they are due

Posted on 6 September '18, under money. No Comments.

Bad business habits

When you run your own business, it can be hard to step back and look at the big picture. Failing to do so, however, not only harms your business; it can also make it even harder to sell.

Whether it is failing to track cash flow or not investing correctly in key staff, there are many bad habits that business owners commonly make. Here are the top three:

Using the business as your personal ATM
A common business tax-minimisation strategy is to spend business earnings on personal expenses that are not directly related to the business. The idea behind this strategy is that reducing the earnings will make the business liable for a smaller tax bill at the end of the year. However, the strategy can create complications that cost more in the long run.

For example, when selling the business, the owner will need to convince buyers that the number of expenses claimed should be added back to profits since they are not ‘real expenses’.

Not making cash flow king
Many small businesses fail as a result of cash flow issues. Problems with cash flow can be caused by a variety of factors, such as poor debt collection, unfavourable terms negotiated with customers, lazy record-keeping or a lack of regular costing analysis. Failing to manage cash flow hinders an employer’s ability to pay employees and meet suppliers’ invoices. The business’s capacity to meet unexpected debt obligations can also be significantly reduced, resulting in missed opportunities and potentially forcing the closure of business at worst.

Coasting along
Far too many business owners neglect to spend enough time developing formal business, financial and operational plans; instead, they spend each day focusing on their short-term to-do list. These plans, however, are vital in determining whether all the owner’s work results in business growth or if they are gaining little return.

Particular objectives need to be mapped out to monitor and measure performance. This allows business owners to identify areas of reduced productivity or activities that generate lower-than-required returns and take appropriate action to rectify this.

Posted on 13 July '18, under money. No Comments.

Reducing your winter bills

When the winter season commences, you might notice a spike in your bills. Although, it is no surprise that additional heating and hot water adds up, you may be surprised at how you can reduce these costs with minimal effort.

Consider the following tips to reduce your winter bills and lessen your environmental impact:

Heating and electricity
Instead of turning up the dial on your heating, look to other ways of heating up without using gas or electricity. Simple changes such as dressing warmly, closing the doors of the rooms you are not using and using a door snake can help to avoid the use of unnecessary heating.

Water
You don’t need to make big changes to make a difference. Some small changes you can easily implement include taking shorter showers, turning off the tap when brushing your teeth and installing a dual flush for your toilet. Fixing your dripping taps and leaking toilets will also lower your water bill.

Appliances
Before purchasing new appliances, be sure to check the energy efficiency rating. Switching to energy efficient light bulbs can also reduce your electricity bills. Installing a water efficient shower head and only using the dishwasher and washing machine when full can help to save water. Switching off and unplugging appliances when they are not in use is a good habit to form.

Posted on 15 June '18, under money. No Comments.

How to spot a fake loan

When shopping around for a personal loan, it is wise to be conscious of any potential scammers that may try and offer you a deal that sounds too good to be true.

Though a loan may look legitimate from a first glance, there are various tell-tale signs to watch out for to spot a fraudulent loan.

When applying for a loan, be wary if your lender:
– does not evaluate your credit report before approving your loan
– calls or emails you to advise that you are a candidate for a loan
– asks for an initial fee to be wired to a local or international bank account
– offers a low-interest rate
– approves an amount that is higher than you require or applied for
– emails you from a personal email address (i.e., hotmail or gmail)
– sends correspondence using an email address where the company name is misspelt
– gives you an immediate deadline to accept the loan
– has not provided a legitimate address

It is essential to ensure the company you are dealing with is legitimate. Find their number from an independent source and then call them. Never call a number provided in an email as the scam artist may be impersonating a legitimate institution.

To be more adept at identifying a fraudulent loan and to avoid being scammed, never solely rely on the advice of a lender. It is always better to do independent research before you finalise your decision.

Posted on 17 May '18, under money. No Comments.

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