Cash flow planning is a very useful tool for businesses; however they can be helpful for personal finances as well.

Thinking about the future

When you’re young you feel invincible; it rarely occurs to you that one day you will no longer be young. You don’t think about how you will cope when you are no longer able to work. If you have children, you will most likely spend more time worrying about their future than your own.

The future can be quite worrying, so it’s important that we do all that we can today to alleviate some of those worries. We cannot predict the future, but we can try and minimize the impact of what the future may throw at us.

How can cash flow planning help?

Every month more and more families are finding it difficult to cope with the increasing costs of living. When you have people struggling to deal with paying for now, then it is understandable that they will fail to plan for the future. However, it is possible to improve your situation now so that you can look towards the future.

A cash flow statement is a plan which takes your income and measures it against your outgoings to assess your net cash flow.

Revenue for your cash flow plan can include –
• Wages/ salary (individual or household)
• Interest earned on all savings accounts
• Benefit payments
• Investments
• Assets from houses/ car/ etc
• Anything else which generates an income

Outgoings for your cash flow plan can include –
• Rent or mortgage
• Utility bills (electricity/ gas/ water/ phones/ etc)
• Weekly/ monthly shopping costs
• Travel costs (petrol/ bus/ train/ taxi/ etc)
• Leisure (clothes/ books/ days out/ restaurants/ pubs/ etc)
• Anything else which you regularly pay

To calculate your net cash flow, you will need to subtract your outgoings from your income. If your income is greater than your outgoings, then you are considered to have a positive net cash flow. However, if your outgoings are higher than your income, then you are deemed to have a negative net cash flow.

If you have a negative net cash flow, then you may need to reassess your outgoings and see where you can cut down.

How can I improve my net cash flow?

If you currently have a negative net cash flow, or you want to improve your positive net cash flow, then the best way to achieve this is to look at your outgoings.

Start with the things that you want and don’t need (such as holidays or football season tickets) and work your way upwards. Once you take care of your wants, then you can work on your needs.

If you have travel costs, then see how you can make these cheaper. If you drive then, you can work out if public transport would work out cheaper. If you live near your place of work then maybe you can walk or cycle to work.

As you work your way through your cash flow plan, you will be surprised with some small changes you can make to reduce your outgoings.

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FinTech companies are starting up across the globe, but what exactly is FinTech?

What is FinTech?

Financial Technology (or FinTech as it’s starting to become more commonly known as) is a new industry slowly taking over.

FinTech is an industry which offers financial services to people while utilizing the latest software and technology, from computer programs to apps FinTech offers something for everyone.

FinTech covers the more traditional financial service but is also taking advantage of services such as crowdfunding and peer to peer lending.

It’s too early to say whether the FinTech industry is a passing phase or if it’s here to stay, but for the time being new start-ups are launching all the time.

FinTech in the UK

The UK Government have already pledged their commitment to making the UK the FinTech Capital of the World. The UK FinTech industry has already managed to generate £6.6 billion and created 60,000 jobs in 2015.

Recently the UK and Singapore came together to launch the FinTech Bridge. The Monetary Authority of Singapore (MAS) along with the Financial Conduct Authority (FCA) have joined to form a regulatory cooperation agreement.

This new agreement allows UK and Singapore regulators to refer FinTech firms to similar companies based in the other country. There are also guidelines which state how regulators will share and use information.

FinTech vs. the banking industry

The banking industry has recently been featured in the media a lot; with a string of crisis’s affecting consumer confidence banks are finding rebuilding their reputation a tricky task. The FinTech industry, however, is soaring, and this had made the banks stand up and take note.

A recent report has stated that 63% of customers would use and recommend a FinTech company over a traditional financial service.

The banking industry has two options; they can self-design their financial technology platforms, or they can use the existing FinTech company that has pre-designed platforms. Both of these options come with costs and risk.

The benefits of FinTech

The benefits of the FinTech industry are –
• FinTech can offer potential solutions to businesses
• FinTech solutions are effective and efficient
• Financial solutions on offer include improved cash flow generation, capital management, monitoring, online transactions, etc
• Technology exists which can match lenders with borrowers
• The digital aspect of the technology allows for simpler auditing processes

The future of FinTech

It is too early to speculate how the FinTech industry will progress, with new businesses opening every day it would appear that the sector still has a lot of life in it yet.

One thing is sure; FinTech has opened up a whole new side to financial services which forced other industries to change and adapt or else they run the risk of vanishing.

The FinTech industry successfully shook up and brought the Financial Industry back in action.

The long-term impact and the overall success of the FinTech industry will be clearer after a few financial cycles, but one thing is for certain. There will be a lot of people paying close attention to the bigger picture.

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Do you find you are waiting for the payday every month? Are your wages not lasting the whole month?

When pay day feels far away

When your salary just doesn’t quite stretch until the payday, it can feel like a trap with no way out. This situation is affecting more and more families across the country. It may feel like there is nothing that can be done but that’s not so.

Here are some ways to improve your finances.

Don’t live beyond your means

The living beyond your means is a simple but often ignored sentiment. The number one way to give your income a much-needed boost is to make sure you are not spending more money than you have coming in.

Something as simple as completing a budget sheet can help you compare your income against your outgoings. Once you know what you have coming in and out, you can then have a better overall picture of your finances.

The best budget sheets include details of all money going in and out. Once you have completed a budget sheet, you will be able to cut out waste and improve your cash flow.

Stop unnecessary shopping

Although it may seem like you do at the time, do you need the latest game or that dress in the shop window? Stop. Think.

A lot of our income gets wasted buying things that we want rather than need. These expenses are not always such a bad thing; however if you consistently find yourself in a situation where you struggle then, all these unnecessary purchases could be detrimental to your finances.

Once you have your finances under control, then you can allow yourself the occasional treat.

Sync your pay and bill dates

If you find that your bills come out at different times of the month, and so some bills are constantly going unpaid as a result, then it may be the time to coordinate your bills.

However you find it easier, paying everything off at once or spreading the payments over a short period, most companies will be willing to adjust their paydays if you contact them and explain your situation.

Limit the number of credit cards you have

A credit card can be a lifeline for many people; they improve your credit ratings, and they can be a life saver in financial emergencies. However, if you are struggling to repay multiple credit card bills, then it may be time to start limiting yourself to one or two cards.

As brilliant as credit cards are, it is incredibly easy to fall into debt after missing a few payments. Credit cards work best when you pay off as much of your bill as you can afford each month.

Do not let financial stress affect your family

In times of stress, we tend to take out our frustrations on those we love rather than deal directly with the source of our frustrations. This stress can be extremely damaging, not only to ourselves but also to our relationships.

You may feel that by keeping your financial struggles to yourself, you are protecting them. However if the weight of your financial problems is causing you to lash out then, they will still be affected.

Rather than working without your family consent, become a team and work together.

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When merging two families into one, there are always plenty of things to consider to ensure that everything goes smoothly. Like a lot of these things, there may be no single ‘right’ answer to the question of how to manage your finances when blending families. Different people will have their situations, needs, and concerns. The important thing is to figure out what’s going to work for you.

Where is square one?

Pretty obviously, the main thing is to keep everyone on the same page. Talking things through openly and honestly before making any decisions is vital to avoid issues down the line.
It’s also essential to both be candid about your finances – income, expected spending, investments, debts – as well as what your financial priorities are. Knowing what you’re working with and what each of you feels you need to consider allows you to make informed joint decisions.

Who else is in the picture?

Outside of your ‘new’ blended family, there may still be the other parents to consider, as well as grandparents and other relatives. Considering how they will affect your decisions before making your mind up over how you plan to manage your finances together can save a lot of hassle.

Altogether, or separate?

The question of whether to pool resources or each be responsible for ‘your’ half of the kids is one of the first things to solve. Simply pooling everything and working from a single joint set of finances may be the easiest solution for some people. It can also avoid the issue of having two halves of the family, potentially operating on very different budgets.
For others, though, it may be more appealing to each keep a separate ‘childcare’ account for dealing with your kid(s), with another for ‘family-wide’ spending. Reasons for this vary, but commonly include concerns from a previous partner regarding where their childcare contribution is going or merging existing accounts and savings being complicated and overall detrimental.

Straight down the middle?

When merging finances, the fairest approach to any pooled resource can appear to be an equal contribution system. You both put in a set amount per paycheck; fair’s fair. However, if you have noticeably different salaries, one of you can end up getting the raw end of the deal – so think about whether you might in the long term have fewer money-related misgivings if you go for a proportion set contribution instead.

How will this affect our tax?

As with all financial decisions, make sure to look at how it’s’ going to affect your tax. Depending on your situation, you may be better off filing tax returns separately or jointly. You’ll also need to figure out whether you can file all, some or none of the children as dependents.

What about inheritance?

It may not be what you want to think about when planning your new life together as one family, but it’s worth putting some thought into what happens in the long run. Making wills and other plans to ensure that it’s crystal clear how you want the estate divided up and what happens if one of you outlives the other can prevent arguments later on and leave you reassured you’ve made the best plans you can for your loved ones.

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Searching for a credit card can be an overwhelming and confusing experience.

A quick search on various credit card lenders and a comparison website will bring up an endless selection of credit cards all claiming to offer you the best. It’s important that you understand what you’re applying for before you sign up for a credit card.

Here are some things you should know before applying for a credit card.

What are the benefits of a credit card?

When one uses their credit card responsibly, it can be a valuable and rewarding way to make purchases.

Credit cards offer a quick and handy way to make large, and small, purchases. A lot of credit cards also have additional bonuses for example–
• Consumer protection
• Cashback
• Spread the cost of large purchases
• Loyalty points

What protection do credit cards offer when making purchases?

In the UK under the Consumer Credit Cards Act 1974, consumers have extra protection when they purchase an individual item worth between £100 and £30,000.

However, in the Republic of Ireland, this is not the case. The level of protection for credit cards is the same as debit cards. Purchases made with credit or debit cards are protected by ‘chargeback’.

Through chargeback, you will be able to claim a refund through your card provider for purchases that don’t arrive or are damaged/ not as described. This protection applies regardless of whether the retailer is still trading or not.

Although offering chargeback is not a law, it is still worked into the procedures of most credit and debit cards. Both Visa and MasterCard’s have added chargeback to all of their cards.

Chargeback is also available in the UK.

What exactly is APRC (or APR)?

APRC stands for Annual Percentage Rate of Change (or Annual Percentage Rate as it’s also known as). Mortgages, loans, and credit cards include APRC and APR.

With the help of APRC/ APR, one can understand what percentage of interest you pay throughout the year.

What about interest-free?

The majority of credit cards have an initial interest free period. This term, essentially, means that you can borrow money without incurring any interest charges; this however only applies as long as you pay off your card in full each month.

It is best to check the exact details of your interest-free card, for instance, it’ll be good to know –
• Length of interest-free period
• Charges for cash withdrawals
• Any other additional fees or charges
• The rate which you will begin with post the end of the interest-free period

What are the downsides of a credit card?

As with all things in life, there are downsides to credit cards. The biggest issue people face with credit cards is debt. If you fail to pay your full bill each month, then you will find that interest will quickly build up.

The best course of action is to pay as much of your bill as you can afford each month.

There are also other additional charges for missed payments, late payments, or exceeding your credit limit. There are also substantial charges applied for cash withdrawals; these may still be applicable during interest-free periods.

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Banking scams have hit the UKs financial industry; this has caused fraud rates to rise by 26%. The biggest contributor to this was remote fraud which has cost the UK consumer £168 million in 2015.

Financial fraud is rising

In 2015 £755 million was stolen from financial institutions and British consumers.

The methods adopted by fraudsters are becoming increasingly smart. They are starting to target people directly as a result of financial institutions tightening up their security measures.

Attempts have been made by various organizations and companies to alert the public to new scams adopted by fraudsters. The advice giving out is to remain vigilant and do not give out personal details unless you are 100% certain to whom you are speaking.

Despite these measures, fraud is still continuing to rise.

Remote fraud

Fraudsters will pretend to be bank staff, police officers, or even representatives from various companies. They will contact you directly to either obtain your bank details or encourage you to send money to them.

This type of fraud has become a gray area in the industry, and banks have been known to refuse refunds on the basis that victims handed over their details voluntarily. Victims of this type of fraud have also reported that the police have also shown little interest.

There has been a 64% rise in internet banking fraud and a 92% rise in telephone banking.

Other areas of fraud

In 2015 –
• Card fraud rose by 18% to £567 million
• Cheque fraud fell by 6% with a total of £18.9 million reported lost
• There was also a reported 2.8 million lost toward mobile banking
• Card companies and banks successfully prevented a total of £843.6 million.

What is going to be done to talk financial fraud?

The UK in February announced the creation of a new task force to tackle fraud.

The taskforce will include representatives from the police, the government, and the banking industry.

Despite the announcement of the new task force consumer confidence has been damaged. When you take into considerations that victims get a reply of “we are helpless, or we cannot rectify the problem” by the police or by bank staff then this it’s not surprising.

How to prevent fraud

There are steps which you can take to lessen the risk of being a victim of fraud –
• Remain alert – there is an increase of fraudsters who are imitating Government and company officials
• Do your research – if you are unsure about a phone call, email, or letter you have received then look online, people are sharing their stories and companies also regularly issue warnings
• Be care with payments – be wary of those who demand you pay upfront or want you to use companies such as Money Gram to send them money, legitimate companies and Government organizations will not require you to pay them in this way
• Do not rush yourself – it’s a common tactic among fraudster to rush you or demand you give them an immediate answer, do not allow yourself to feel pressured, take your time and make informed decisions

These are just a few steps you can take to keep yourself safe. New scams are operating all the time, so it is crucial that you safeguard yourself and keep an eye out for fraud alerts.

The post Bank Scams Are Causing Fraud To Increase appeared first on My Money Platform.

In 2012, the RBS Group was hit by a banking disaster due to computer system problems. Could similar complex business codes cause further disruptions?

The 2012 banking IT failure

The RBS Group, which includes the banks NatWest, Ulster Bank, Coutts, and Royal Bank of Scotland, computer systems became severely corrupted after a routine computer update.

The corruptions, which happened in mid-June in 2012, affected the computer systems ability to process payments/ direct debits, withdraw cash, view bank details, and various other banking transactions.

The system failure affected many customers, some of which faced fines for late payments. Some customers had to wait to regain normal access to their accounts until mid-July. In an attempt to assist clients who were affected many branches extended their opening times.

RBS faced a fine of £56 million for the incident in 2014.

Could another event like this happen again?

Banking computer systems are extremely complex and are often ancient.

In the UK the mission critical banking systems have between 800,000 to 900,000 lines of code; this is considerably more than the standard mission critical banking system which only has roughly 6000,000 lines of code.

The bigger and more complex a system is the harder it is to maintain and the likely hood for glitches and corruptions increases. The average UK bank will experience 20 to 30 computer incidents a month.

Keeping in Lieu all that is going on, many foresee another major IT event in progress i.e. near future

Can another incident be prevented?

Avoiding another event like the RBS Group crisis is possible. However, this would not be an easy process, and it would involve banks replacing their core systems with new ones.

It may sound like a straightforward task. However, it is more complicated and time-consuming than it sounds. There is also the risk of issues along the way which could range from slight teething problems to major system breaking problems. Replacing an old system for a new system could potentially cause more disruption than it solves.

The problem with banking computer systems is mainly down to the software. The software most commonly used in banks is ancient, and most of the original designers of the software are no longer available. Due to the old feature of the software, it leads to a knowledge gap as many software engineers do not have in-depth knowledge about the systems they use.

The future…

The banks will be forced to update their systems eventually. Banking systems are under increased strain, and the cracks are already beginning to appear.

It is extremely likely that banks will be forced to update their systems over the course of many years to minimize disruption. In the meantime, consumers should be vigilant when it comes to their accounts.

It is always good practice to regularly check your bank account. Make a note of the amount you have in your account, details of regular payments, keep an eye out for suspicious activity.

The more you know about your account, the more prepared you will be if you are unfortunate to face problems, whether they will be the next banking crisis or theft/ fraud.

The post Could The UK Be Faced With Another Banking Crisis? appeared first on My Money Platform.

It’s a typical situation. You wrote out a to-do list, set out to tick everything off…and somehow despite your attempts at organization; you didn’t manage to get everything done. Maybe you didn’t even manage any of it. Sometimes it’s because something major came up, but most of the time it boils down to not knowing how to maximize your productivity within the day.

The early bird gets the worm

Even if you’re by nature a night owl and can’t function in the morning without consuming a concerning volume of coffee, your productivity is still likely to peak in the morning. Studies suggest that within half an hour of getting out of bed – even if you had to drag yourself out rather than springing joyfully into the new day – your energy levels are starting to climb. By the afternoon, they’ll start to tail off. The power cycle is part of the circadian rhythm, or ‘body clock’, which affects your productivity throughout the day.
So the best time of day to get on with that checklist of things that need to get done is ‘first thing’. Naturally, sometimes this may not be possible – if you want to tackle odd jobs around the house but have to go to work, you may have just to get things done when you get home. Even then, doing them as soon as you get home is likely to be better than waiting until just before you go to bed.

Every so often

If this is the case then maybe it’s worth actually having a few separate to-do lists: things you need to do in the morning before you go to work, things that can get done on your lunch break, and things that need to get on with when you get home. You’ll avoid that crushing ‘i didn’t get everything done’ feeling and break things down into manageable time slots.

Prioritise the time

Even when you know when you’re most productive, realistically you still can’t get everything done in that window of opportunity. Instead, prioritize your to-do list. Urgent tasks first, and those that require more mental involvement.
Urgent emails may be best done the first thing so that they hit your recipient’s inbox at the start of the day and write them when your brain is getting into gear. Necessary but routine tasks such as filing or shredding old documents can wait until the afternoon when your productivity is naturally tailing off.

Plan ahead

The first step to tackling your to do’s isn’t actually to decide when to tick things off the list – it’s making the list in the first place. Setting aside time at the end of the day to write out what you need to do the next day means that when you get up to get those odd jobs done or sit down at your desk at work, you don’t have to think about what needs doing. You can dive right in and get started when you’re at your most productive.

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Whether you’re in full-time employment or job hunting, a student trying to raise some extra funds around studying or busy keeping your household running, earning some extra money quickly and easily can be tempting.
The internet provides plenty of opportunities to make a little cash, either as part of a routine or just as and when you have the time. Unfortunately, it’s pretty unlikely that you’re going to hit the jackpot and make millions. But every little help, and even a relatively small extra income can feel like a big difference to your finances.

Freelance work

One of the more time and effort intensive options, taking on freelance work around your other commitments can be a flexible way of making use of your skill set. You can set yourself up as an independent freelancer, or make use of an online freelance ‘agency’. After setting up an account and profile, you apply for jobs that match your skills. The type of job can vary widely, but common areas include editing, ghost writing, or voice recordings.

If using an online platform, make sure to check what cut the site itself takes off of your income! Even if you don’t pay to join, the company will usually take a set percentage of your pay per project. They can still be worth using, but it’s worth bearing in mind when you’re looking at projects to apply.

Filling in surveys

Online surveys or studies sometimes offer financial reward for filling them out, or the chance to win in a prize draw. If you have the spare time to click through a few customer research questions, this can be a viable way of adding a little extra spending money to your account. The prize draw option usually has a bigger payoff if you get lucky, but the chances of it happening are much lower. Hence, the best would be to choose the low-pay, but certain options.

Browsing the web

Being paid for spending time on the internet sounds too good to be true, but happily it’s not. There are both separate browsers and add-ons that pay you per web search – at only the cost of a few additional sponsored results or adverts.
Of course, the payment per search is pretty minimal, and it may not be every search, so this isn’t necessarily a reliable source of income. Still, this is probably the easiest way to make a little extra money online, as it can be simply a background aspect of your usual routine with only a minor change.

Internet shopping

It might not be a strategy with a net gain, but some sites also offer a financial reward for using their online shopping system. Again, the cash back isn’t for anyone purchase going to revolutionize your bank balance, but over time, it adds up. Like browsing the internet, it’s also a neat way to reap a benefit from something you were going to do, so doesn’t take up any extra time or effort.

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When most people think about financial planning you immediately think about planning for the future, but what about the present?

Planning for now or the future?

There is no denying that planning for the future is essential. However, it is also imperative that you do not misjudge the value of planning for now.

Planning, for now, can make your current situation better which in turn can secure your future.

So why is financial planning important?

Financial planning can help improve your financial health as well as help you achieve long and short term goals. Financial planning can significantly improve your –

• Income – careful planning can not only help you organize how to spend your income, but it can also help you identify and cut out waste which will boost your cash flow
• Savings – your increase in cash flow can be used to boost your savings which can help you achieve goals or prepare for unexpected circumstances
• Capital – increased cash flow can also contribute to an increase in your capital
• Investments – Financial planning can help you gain a better understanding of your financial circumstances, with this in mind you can make better investment choices
• Assets – having assets can be rewarding, but they can also become a burden, it’s important that your assets help boost your financial health
• Standard of living – a boost to your income can significantly improve your life, by enhancing your disposable income you are creating more economic opportunities
• Family security – increasing your savings, making smart investments, looking after your capital and assets, will help you keep your families future safe, it’s also worth looking at insurance policies which, along with savings, can also help during times of unexpected circumstances

The list above makes it clear, how by looking after the now (income) you can start building up to take care of your future (family security).

How to plan for now

Financial planning does not have to be an overwhelming and complicated process; it will, however, be an incredibly rewarding exercise.

Creating your personal financial plan is possible–

• Creating a budget and making note of what money you have coming in and what you spend
• What are your financial goals? It is important to come up with specific goals which are realistic; we would all love to be billionaires with our island and private jet, but this is not a realistic goal for the majority of us
• It is important to set up safety nets to prepare for events such as accidents/ ill health/ or death as well as things such as damage, loss, and theft – insurance policies and healthy savings will help protect you and your family
• Keep a close eye on your credit report; a quick credit check will give you a good picture of your financial health
• Keep on top of your financial plan; there may need to be adjustments or if you reach your goals you can then plan your next steps, ensuring sound financial health is an ongoing commitment

However, if you prefer then you can contact a financial planner, and they can go through your finances with you and create a financial plan for you.

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