Learn to be a Financial Hunter - Not the Hunted

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Our 10 Secrets of Good Personal Finance

1. Financial education - a little goes a long way
You don't have to be a financial whiz to manage your personal finances.

This is where the LearnMoney website helps you: we take the blinding gloss off the glossy brochures so you can understand the basics.

You're well qualified to understand banking and personal finance products if you -

  • Can add, subtract, divide and multiply
  • Know how percentages work, and
  • Understand banks are often sneaky
All you then have to do is some simple research which is the next secret.
2. Do your own research - it won't take long

Beware a salesman shaking his head and warning that you need financial advice. In most circumstances you don't: money and finance, at least on a personal level, are not that complicated. Once your research has established what you actually need:

  1. Weigh up the advantages and disadvantages of each product, remember the disadvantages are far more important to consider, and
  2. Strip bare the fees and charges which will help make your decision much easier and a whole lot cheaper

Rely on your own judgments backed up by your own independent research. Banks' 'research' is never free and never independent.
3. Buy simple and flexible - you can't read the future

Einstein said it best - 'if you can't explain it simply, you don't understand it well enough'.

Know what you want. Finance firms love selling complex products. That way customers don't know what they're buying, won't understand the potential downside risks, or realise the true costs, many of which will be expertly hidden in the small print.

Buy the simplest products you can. Stay away from those you can't easily explain to a friend.

Who knows how events in the future may affect you? So buy flexible financial products: such as a mortgage that allows you to over pay or switch to a different lender.

Ultimately the best financial products are those that are simple yet flexible.

4. The Internet - 4 reasons why it's your financial friend
  • Transparency - The internet has shed a blinding light on the secretive world of finance, bringing transparency to the nooks and crannies (the fees and charges) that for so long was hidden from us all

  • Research - Pre internet days it was hard to research details, especially the costs, of any financial product, now it's easy

  • Choice - The net has opened up the financial services industry to increased competition which in turn means there are always some fantastic deals available

  • Online banking - It's a great invention and can turn even the most financially disorganised person into someone on top of their game. Plus, contrary to some reports internet banking is very safe
5. Play banks and finance firms at their own game

Bank profits are big because as Andrew Ellson, Personal Finance Editor of The Times, perfectly sums up:

"All Banks employ every trick in the book to disguise the true cost of almost every financial product they sell"

But with the internet, as indicated in Law 4, we can now work out for ourselves what's good and what's bad.

Also don't be loyal to your own bank - they aren't loyal to you. Other industries look after loyal customers. Banks do the reverse; rewarding new customers with the best deals while neglecting their existing ones, regardless of how long you have banked with them.

So how do you play the banks at their own game?

  1. Be aware and be on the lookout for their catches, and
  2. Be ready to move your business elsewhere to get a better deal
6. Ask - there are no stupid questions

You worked hard for your money. So don't throw it away or let others take advantage of you because you don't know or don't understand.

If you ask a 'stupid question' and it saves you money, was it really that stupid? That's why there are never any stupid questions when money and finance is involved.

Bankers and financial advisers can be arrogant, trying to project mystique about their 'terribly complex' business - you can puncture pomposity by asking those 'dumb' questions.
7. Protect your Credit File with your life
Protecting your credit file (often called 'credit rating') with your life might be a step too far - but you get the point.

A bad credit rating limits your financial options - you could be completely denied credit - cards, mortgages or a new bank account. Even if you are able to get credit you'll be charged astronomical interest rates - sometimes exceeding 60%.

A good credit rating puts you in control - it expands your financial options so you can choose the best firms to do business with.
  • How do you get and keep a good credit score? Pay all your bills on time and make sure you don't get financially overstretched
  • How do you get a bad credit score? Pay your bills late, fail to repay a loan, or take on too much credit
8. 10-30 minutes a week - all you need to be financially organised

You don't have to devote all your waking hours to being financially organised if you follow my basic rules. I spend as little as 10 to 30 minutes every Friday morning:

  • I batch - throughout the week. I dump all bills, statements and the like into an old shoebox
  • I log onto my internet bank and check my balance

  • I pay all bills (pay your credit card bill 1-2 weeks in advance not 2 days before it's due)
  • Finally, I check previous bills were paid and that the money has been debited from my account
9. Prioritise your personal finance - be good, not perfect
Get your priorities right. Let's say you have a £150,000 mortgage, a £250 annual home insurance bill and you're paying 29.9% on a £300 negative balance on your credit card.

Focus on the biggest item - find the best mortgage deal - simple, flexible and cheap. This is far more important than trying to save £10 here or £30 there on insurance or credit cards.

Strive to be good with personal finance and not perfect - you've got a life to live.
10. Remember - you're in the driving seat

Do you realise the Banks and finance firms are desperate for your business, but you can choose who gets it.

At any one time there are some fabulous deals available on the market, whether bank accounts, credit cards, loans or mortgages. These are the deals you should be actively seeking out, so -

  • Know how the game is played - be aware of the likelihood of sneaky tricks
  • Arm yourself with the right tools - simple, quality research
  • Remember the 10 secrets on this page, and then
  • Instead of being the financially hunted, you can become a financial hunter!


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