There are many things to consider when making one of life’s more significant purchases. Given the financial outlay, it is important to be completely satisfied with what you are buying. In the case of purchasing a car, there are usually many different finance options available. However, although monthly repayments may be affordable, paying the initial deposit may represent more of a challenge.
So how can you ensure an adequate financial security net is in place to help in such circumstances? After all life isn’t always plain sailing; a major financial outlay may be just around the corner!
- Control Your Spending – Find out what your monthly income and outgoings amount to. What do you have left over? Next break down all ‘unessential’ purchases – they may add up to more than you had imagined! Cutting back on unnecessary spending is vital to ensure you are in a position to afford a major purchase or financial setback in the future; it is important to have a reasonable sum of money to set aside each month…
- Manage Your Savings – Setting up a standing order between your current account and savings account is a good idea and will help you to steadily build up your savings. However, it can be tempting to dip into your savings account; sometimes it may be necessary. Therefore, it may be sensible to set aside an ‘emergency fund’ in a separate savings account.
- Select a Fixed Term Investment Product – Seek financial advice to find an investment product to suit your financial situation. Cash only ISAs are an example of an investment product that may be appropriate; they offer tax-free savings up to a certain value.
- Get the Right Bank Account for You – Having the right bank account for your circumstances is vital to ensure you are in the best possible financial position. However, it is more difficult for people with bad credit ratings to have an application for a new bank account accepted. Bank accounts such as those offered by Think Money Limited are designed to help people in such a situation, with no credit checks and no overdraft fees. This gives account holders the peace of mind that a financial reserve is available if needed.
Long-term preparation is key when it comes to managing any aspect of your finances; building the foundations of a financial safety net today can help you in the long run, whether this is to offset a loss in income or to make a significant purchase.
Ultimately, although financial security nets can usually only be built over the long term, simply having the right bank account for you is an easy start.