11 Simple Money Saving Tips For Students

Unless you’ve got a master’s degree in ducking and diving, making your way through university can be expensive. Time to take a few extra lessons in how to save money.

11. Don’t Pay Your Tuition Fees

Let me rephrase that: don’t pay your tuition fees upfront. There are salary thresholds that need to broken before you have to repay your student loans. Many university graduates fail to reach this threshold which means they won’t have to make a repayment on their debts. Any debts that haven’t been repaid after 30 years can be written off. Continue reading

How To Boost Your Pension

Do you fear a future filled with uncertainy and doubt? One where you have to scrape and scrimp for every day of your fast waning life? It’s time to stop worrying and start working to ensure you retirement is going to be more comfortable that the doomsayers pridict.

Before we start, I have to admit that a lot of research time was spent putting this post together. You see, for me, the problem is that there’s an awful lot of advice out there telling how to make your retirement comfortable but all of it comes from people that want to sell you something. Continue reading

How To Avoid Inheritance Tax With Little Effort

We’re all going to die one day but have you made arrangements for the day you throw off your mortal coil?

It’s been said many times before but there really are only two certainties in life: death and taxes. To add insult to the ultimate injury you’re even going to be taxed for having the audacity to die.

I’m not trying to make death sound like a joke but you do need to consider this fact: up to 10 million homes are liable for inheritance tax. With this in mind, I decided to put together some useful information to help ease the burden on your family.

Contents:

What is inheritance tax?

Is inheritance tax fair?

Is there a tax free threshold?

How to avoid inheritance tax

Getting married to avoid IHT

Give your money away

What is a gift?

Where can I get IHT advice ?

What is inheritance tax?

As you go through life you build up what’s called an estate. This consists of all the money you have in the bank, your home, investsments and any business you may own. Not surprisingly, it’s all liable for tax. Currently, your family will pay tax of 36% for an estate that breaches the Inheritance Tax threshold (as long you leave at least 10 % to charity. If not, the liability rises to 40%.

Sadly, many families don’t deal with matters very effectively and end up paying thousands more than they need to. I understand that it can be a sensitive subject even to the point that some memebrs of your family may be embarassed to bring up the subject.

If you want to make sure your relatives get the most from your estate, Inheritance Tax needs to be firmly dealt with.

Is inheritance tax fair?

Probably not. We spend our whole lives paying tax only to be taxed again when we die. The basic idea behind tax is to prevent the children of the rich staying rich. IHT helps to channel some of the money back into the state’s financial system. From there is can be redistributed to help other, more needy people.

If you leave your family a reasonably sized estate and minmise your liabilities you stand a good chance of leaving them a tidy sum in your will.

Is there a tax free threshold?

Yes. Regardless of who you are, you can leave a certain amount in your will without having to pay any tax on it. Called the ‘nil rate’, the current figure is £325,000. Once you go over this threshold anything you leave behind is subject to 40% tax (or 36% if you donate 10% of your estate to charity).

The ‘nil-rate’ is currently fixed until 2014. If you look at it in real terms, this means that, with inflation, you’re actually going to pay less tax.

Example: your estate is worth £400,000 but you pay nothing on the first £325,000. That leaves ou £75,000 which is liable for tax at 40%. If you don’t donate 10% to charity, you inheritors will have to pay £30,000 to the Treasury.


How to avoid inheritance tax

Fortunately, there are quite a few ways you can reduce the amount that’s paid out. In fact, one really move will save a huge amount of money. What’s the sceret?

Getting Married

If you’re married when you die and you leave your assets to your spouse or civil partner then ther’s no tax to pay. As long as they’re living in the UK. As an added bonus (to your partner), their IHT allowance rises by the amount you didn’t leave to anyone else. This means that, currently, a couple can leave up to £650,000 tax free.

Confused? Ok, here’s an example of how it works:

Bob and his wife, Louise, have assets of £900,000 when Bob dies. He leaves £300,000 to his children. The remaining £25,000 of his ‘nil-rate’ is automatically transferred to his wife. This means his wife now has a ‘nil-rate’ allowance of £350,000.

When Louise dies she has an estate worth £600,000. Because Bob’s nil-rate was carried over to her, she is now liable for 40% on £250,000. This means her family will have to pay the tax man £100,000 leaving £500,000 to be shared out amongst the family members.

The ‘nil-rate’ is a fairly new ruling. Prior to 2007, joint assets were liable for tax. This resulted in many people giving away tax free sums as gifts in order to avoid the liability.

If your partner died before the government changed the law you don’t need to do anything. The new rules have been backdated indefinitely.

What else can you do to reduce IHT?

Give your money away

This one is a little tricky. You can give money away but if you die within 7 years of handing out this gift then it’s still classed as part of your estate. This means it could still be liable for tax. Now, to be fair, the tax man would have to track down the money but that’s another story.

If you give away a large sum of money it is possible for the recipients to take out an insurance policy against IHT. If you’re intending to do this you’ll need to see expert advice.

Points to note:

The first £3,000 you give away each year will not be classed as part of your estate nor will it be taxed. This amount can be carried over into the next tax if unused.

Donating your money to your preferred political party or charity is also exempt from tax.

Giving £250 a year to friends and family. You can give anyone you want up to £250 per year, tax free. The rule applies on a per person basis which means that if you have 7 grandchlidren you can gift each of the £250 per year.

Dowery or consideration of marriage. Although it seems antiquated, the dowery is still in use and, more importantly, it’s tax free – up to a point. If you’re a parent you are allowed to hand over £5,000, £2,500 if it’s your grandchildren getting married and £1,000 for the rest of us.

Do run a farm, own woodland or run a heritage site as a business? Working farms with agricultural property could be exempt from tax. If you own woodland, the trees, but not the land, is exmpet.

What is a gift

The Oxford dictionary defines it as, ‘unconditional’. For the purposes of the law and taxation rules, you should not gain from gifting money. For example, you gift ‘some guy’ £3,000 and he repairs your roof. That’s tax avoidance on a Jimmy Carr scale.

Where can I get IHT advice?

Your first point of contact should be the IHT section of the HMRC website.
The information is fairly straightforward but, if you’re in any doubt, you may need to seek help. A financial advisor will be able to help you.

Likewise, if you have a large estate then it’s worth paying a few hundred pounds to let someone else deal with all the paper work.

One final note: make a will! Whilst your aim is to enjoy your old and the money you’ve earned you don’t don’t want family bickering over your estate.


How To Avoid Tax Like The Tax Man Does

TV presenters are doing it. HMRC employees are doing it. It wouldn’t surprise me if other civil servants are doing it: not paying your dues to HMRC is all the rage and I’m guessing you’re here because you want to know know how to avoid tax?

Before we get started, refusing to pay any tax at all is illegal. What we’re going to look at today is a relatively simple way to reduce the amount of tax you pay to Uncle George for loony pet projects like HS2!

Ok, here we go, a 5 point guide to minimising the amount of money you pay in taxes.

How Does It Work?

Rather than paying you a monthly salary, your employer pays your wages to a service company. You then become an employee of your service company. No third parties are required and I’ll show you how it’s done shortly.

Instead of being taxed at 20%, 40% and 50% you then become liable for Corporation Tax (currently 20%) across all income. Corporation Tax is a fixed sum regardless of how much money your company earns.

You then pay yourself a dividend of up to £42,000 per year (effectively tax free). In the meantime, your business continues to build up cash until you decide to close it down and extract the money that’s left. Oh, if you employ your wife, husband, partner (or whatever you want to call them) you can pay them a salary and dividends as well.

Other Benefits

Lower rates of tax aren’t the only incentive to set up your own company. Here are a few others:

  • You no longer pay National Insurance
  • You can claim back expenses for mileage and travel costs
  • Stationery, phone calls and office costs can be claimed back from your business

How do you get a piece of the action?

Before you can start avoiding minimising your tax bill there are a few things you need to know, such as….

How Set Up A Service Company

Setting up your company is relatively easy. You have two options: you can apply directly to Companies House but the process can be quite slow. Alternatively, the list of companies below can have your service company up and running in as little as 48 hours:

ww.theformationscompany.com/
www.setupacompany.co.uk/
www.theformationscompany.com/
https://www.quickformations.com/

Fill in the paperwork, pay a small fee (as little as £4.99) and a few hours later you will officially be a company director.

Do I Need A Business Bank Account

Yes. Your business account is where all of your money goes before you pay yourself. A word of warning: don’t be tempted to dip into your business account if you’re short of cash. You might get a nasty smelling tax bill!

Before you set up your bank account you’ll need all the documentation issued when you created your business. Take your Certificate of Incorporation and a business plan along with the usual paperwork needed to open an account (passport, proof of residence, etc).


Hire A Good Accountant

If you don’t know how to handle our tax affairs, this step is vital. A good accountant will not only do your VAT and Corporation Tax returns but will also keep you advised of changes to tax laws.

When I first set up my own company I knew nothing. My accountant was referred to me by some colleagues. For £80 a month he handles all the paperwork and keeps me up to date with how tax rule changes affect me.

Getting A Contract

You can’t just set up a business and expect your current employer to play ball. First, they will need to agree to pay you as a service supplier rather than an employee. You’ll also need a contract between you and your employer. Don’t worry, this is not as scary as it sounds. If you’re employed you already have a contract to work – it just needs renegotiating.

Tip: get a solicitor or accountant to check the wording of your contract.

Liability Insurance

You’re probably going to need insurance. At a minimum, most companies ask their service suppliers to have Public and Private Liability insurance. Cover of up £1,000,000 will cost you a few hundred pounds a year and can be paid for by your business.

The Negatives

As with just about everything in life, there are negatives points to consider:

  • Accounting – your accountant will do the returns but you still need to track all your expenses
  • Renegotiating contracts – your employer might find someone cheaper or renegotiate your contract to save money
  • HMRC – they constantly make a mess of their own accounting so don’t be surprised when they think you’ve paid yourself more than you actually have. A good accountant is key
  • Changes to tax laws – the government is constantly tweaking the rules to get more money and you at least need to aware of what’s going on (which requires some reading)

Is It Worth The Effort?

Definitely. If, for example, you earn £100,000 as a salaried employee you will take home about £64,000 per year. By using your own company, and avoiding NIC’s, this figure will jump to about £71,000.

Now you can see why Fiona Bruce, Chris Evans and members of HMRC have been funnelling their pay into their own service companies!


Insanely Crafty Ways To Make Your Kids Rich

Tired of finding the same old rubbish ways of making your kids rich? I know it’s not easy getting serious advice. I trawled the web and all I could find were the same old tired ‘save money, invest in stocks and shares’ pieces of generic advice kicking round.

I’ve decided it’s time to kick the boring bits of advice into the long grass and come up with some tongue in cheek ways that you can use to help you make some serious cash for your kids.

Invest in Pigs

pig manure used to make crude oil

Before you start squealing in horror, I’m not suggesting our little pink friends are going to end up between two slices of bread! You may or may not know it but there’s a growing clamour for green vehicles but the problem is that some of the technologies are still expensive. Did you know that it’s now possible to make crude oil from pig manure? Pig poo will save the day!

Alternative energy manufacturers are looking for guaranteed cheap ways to make bio-fuel which means that pigs will be the new gold rush!

Zombie Chic for Undead Clients


If you didn’t already know, the end of humanity is coming. 90% of the world’s population will end up as mindless automatons keen on sucking you dry (a bit like the bankers but with more morals). This emerging market is ripe for the picking and the sooner you get your foot in the door the more likely your little entrepreneur is to, ahem, make a killing.

This should be a pretty easy market to make some money in: rotting meat pies and torn jeans/bloody t-shirt combo’s will be all the rage.

Selling Ice to Eskimoes

I know, it’s a tired old joke but the way things are going it will soon be a reality. Global warming is slowly melting the ice caps (unless you’re a conspiracy theorist, in which case, global warming doesn’t exist). Melting ice caps means that many Eskimo’s will soon be homeless.

Now is the time to invest in a couple of thousand ice cube makers!

Tin Foil Hat Manufacturing

tin foil hat defeats alient invaders

Apparently, Scientology is one of the fastest growing religions in the world. But how does that help your little entrepreneur make money? Simple; as the number of Scientologists grow then the number of tin-foil hat wearing conspiracy theorists grows as well. You’ll have queues of alient dodging nuts beating a path to your doorstep faster than you can say ‘L Ron Hubbard’.

If the tin foil hats fail to take off in a big way you can supply them as lids to the meals on wheels industry that will need to cater for the ever growing population of pensioners.

Become a Banker

Yes, I know there are plenty of bankers out there making a lot of money. It’s a cut throat industry; hard to get into and even harder to get out with being tainted with poo-like smell of dodgy deals and interest rate fixing! So why am I recommending this path for your little cherub? Because, at the rate new banking scams are being uncovered, there soon won’t be many bankers left – they’ll all have been lynched.

If they don’t get into banking they can always go and work for the FSA (I use the word ‘work’ loosely as the regulator seems to have done little regulation at all).

Invent A Rubbish Toy

cabbage patch kids

You think I’m joking? Look at some of the rubbish that made people seriously rich over the years. Cabbage Patch Dolls, Zhu Zhu Hamsters and the Tele Tubbies to name but a few. Kids minds are fertile grounds for the kind of creative processes that go into inventing toys and gadgets that sell like hot cakes.

Fortunately, Iggle Piggle has been done and consigned to the dustbin of history!

Got any more ideas? Let me know if the comments section below and, whilst you’re here, why not like this post of Facebook or Retweet?


Free Films: How To Kick Murdochs Prices Hikes In The Nuts

sky tv Not long ago, getting a copy of the latest blockbuster for free was a pretty poor experience. Many movies were pirated using video cameras tucked into a cinema goers pocket. All you ended up with muffled acoustics and the endless silhouettes of viewers unable to hold their bladder passing by every two minutes!

Amazingly, some people still put up with this! But why? Getting your hands on a free movie is easy. Download it, stream it, borrow but whatever you do stop paying for crap pirate copies.

So where is this media goldmine that would keep even the hardest hardcore movie fanatic going? Let’s take a look.

Google Video


Ok, some of you might have had enough of Google and it’s insidious tentacles but you can’t beat them for finding online movies. If it’s on the web and it can be indexed then there’s a good chance you can watch it.

The beauty of the using Google Videois that, if there’s any issues with copyright, they’re liable (lucky they’ve go billions of dollars in the piggy bank).

Indie Movies Online

Imagine all the film noir and cheap horror flicks assembled in one place for your delectation. Got an image in your head? If so, it probably looks like indiemoviesonline.com (try saying that when you’re eating your fish and chips in front of the TV – without spitting).

This site is quite literally a dumping ground for just about every independent movie production you can think of. If you’re an action movie fan, don’t get too excited – there’s a reason some of them are on an indie label!

BlinkBox

blinkbox

Personally, I like Blinkbox.com but it’s like my grandmother – a little behind the times. The movies are free but they’re not the most up to date offerings so don’t expect to be dazzled by this year’s blockbuster any time soon.

Blinkbox is a great source of older films. I’m a fan of the old black and white movies that seemed to have disappeared from the television but are still available on this site.

Preview Screenings

Now this has to be the ultimate way to catch a free movie. Simply sign up for emails alerts and you’ll be sent updates on the latest preview screenings. Be warned: you might have to travel to get the cinema as I don’t think they hold many advanced viewings in the Truro Palais!

If you’re itching to see ‘Rambo 5: The Fight Against Arthritis’ before your friends then sign up to SeeFilmFirst.com or MomentumPictures.co.uk.

Something More Underhand

Do you have children? Do you like indulging your inner child with a regular binge of kids movies? Then you need to hit the matinees. Again, these aren’t the latest films to be released (the matinee viewing tend to come round a few months after the initial release) but they are a cheap way to see a kids film.

Expect to pay nothing (as long as you’re an adult and you are accompanying at least one child). If you don’t have children offer to look after your mates kids for a day (Despicable Me is hilarious).

Hulu

hulu

Ah, Hulu! How I love you. Hulu.com has been around for a few years now. Thanks to their partnership with some of the biggest names in film entertainment, they have a phenomenal selection of free movies that you can watch online. Again, the movies are the very latest offerings out there but you can’t beat a bit of mindless flogging a la Master and Commander.

One feature that I do like is Hulu’s queueing system. Simply select a list of movies you want to watch, queue them up, buy huge quantities of popcorn and get very fat in a marathon viewing session!

Crackle

Crackle.com is another great source of free to view movies. Like archive.org, some of the offers might be a little old for some viewers liking but, hey, it’s free. If you fancy watching a newer release you can always rent a copy for a massive 99p!

Crackle has a couple of flies in the ointment: the list of movies available in the UK is a bit limited and you also have subject yourself to mind numbing adverts!

Archive.org

If you haven’t heard of archive.org then you really have been missing out. The site is most famous for archiving as much of the web as possible but they have a nice little sideline in movies archives.

Most of the films you’ll find on there are pretty old but it’s a great place to start your nostalgia trip. Check out their movie archive.

Now, if that’s not enough to give square eyes then I recommend you suggest some more free movie sites in the comments section below.

That’s all for today. More money saving tips and ideas coming soon.


How To Get Better At Saving Money

Saving money isn’t hard. After all, most of you learned how to do it when you were a child. So what happened? Why isn’t your bank account overflowing with cash? Did the cost of the rockstar lifestyle get so expensive that your savings couldn’t keep up? Or are your lack of savings a symptom of something a little more simple?

If you want to know how to get better at saving money you need to take a good look at yourself.

You need to understand what you can afford and set some expectations. Continue reading

Cutting Financial Fat Out Of Your Life

Extreme Ways To Save Money

Although this series of posts has been designed to help anyone who’s been made unemployed the tips presented here are worth considering regardless of your situation.

Sell Your Car Now

Cars cost money. It’s not just the price of fuel that hurts you in the wallet. Wear and tear, insurance, MoT’s and road tax all add up. I run a small Peugeot that uses about £30 of petrol each month. Insurance costs me £27 per month. Road tax is £110 per year and a MoT costs about £40. All together I’m paying over £60 a month to run my car. Can you afford £720, or more, a year?

Cancel Your Internet Connection

How much time do you spend on the web every month? How much does it cost? Using an average figure of £15 a month, you’re paying £180 per year for something that, hopefully, you only use an hour or so per day. Take advantage of your time between jobs and get down to your local coffee shop and start leeching their free internet.

Bye, Bye Sky TV

How much does Sky TV cost? £25 per month for the standard package then add another £15 per month if you’ve signed up to the Sports channel. Then add £15 per month if you have the movies subscription. That’s £55 a month back in your pocket. Not sure what to do with the spare time you now have? But some books and start expanding your skills ready for your next job.

Go Christmas Shopping In The New Year

Seriously! Have you seen the savings that are on offer in the January sales? Is there a burning reason why you need to buy your presents in the last few weeks before Christmas Day? In the recent sales, I picked up a games console for half price (£160, down from £320). Bargain! Potentially, you can save hundreds of pounds shopping this way (for the purposes of this post I’ll assume an average of £200).

Wipe Out Your Mobile Phone Bills

In day two of this series, I looked at ways you can cut mobile phone bills. But here’s another idea for you: why not get rid of your mobile altogether? Cancelling your cell phone plan and using an inexpensive pay as you go plan can easily save you $100 a month. This plan will not allow you to have special things like text and picture messaging, but it will allow you to be reached in an emergency which is the only real reason a cell phone is needed. Try to remember that not even 20 years ago, no one had a cell phone and we did just fine.

Sell Your House

Now we’re getting to the really extreme end of ways to save money but if you’re truly broke you may not have an option. Before you rush out to contact your local estate agent you need to see if you’re going to be any better off. How much does your mortgage cost you every month? How much would a rental property cost if you decided to sell your house? If you’re going to make savings of hundreds of pounds per month it might worth considering. For this idea we’re going to assume you’ll have about £250 per month by going into a rental property. That will save you about £3,000 a year plus any equity you have. Once you have a new job you can start house hunting.

Buy Second Hand

Does everything you buy have to be brand new? Could you get a better deal by shopping for second hand items? You may not like the idea but you can save yourself an awful lot of money. In fact, if you’re buying seconds from an online site make sure you use PayPal as you get 45 days to raise a dispute if you’re not happy. It might not like much but with most goods you buy new you’ll only get 6 months grace (and that’s if you can prove a fault wasn’t your fault)

Master The Art Of Couponing

If you haven’t heard of couponing then you’re definitely missing a trick. The idea is to use coupons clipped from magazines and papers to save on your weekly shopping bills. In fact, a woman in the U.S claims to have saved £3,500 on her sons wedding by using coupons. The trick to getting the best savings is to read the fine print very carefully and be prepared to shop around. It might seem like the most enjoyable way of shopping but the potential savings are massive.

Really Extreme Ways Of Saving Money

Some of the ideas listed above might seem a bit drastic but now it’s time to plumb the depths of the barrel. Be warned: The next 5 tips are for the faint hearted and some of them may upset and offend your friends and Family.

Everything Goes In The Doggy Bag

But your faithful, four legged friend won’t see a crumb! If I take a doggy bag home I usually put in the most expensive part of the meal. Go one step further and put all of your left-over’s in the bag. If you really want to push your luck you could ask the diner staff to bag each item individually.

Warning: you will look like a cheapskate and the staff may tell you exactly what they think of you but if you’re that broke you need to go for it.

Stop Buying Drinks On A Night Out

Going out in a group for a drink? First off, can you afford it? If not then you need the cunning of a fox. When you go out in a group, let the other drinkers buy first. If you’re lucky, by the time it’s your turn to buy a round they’ll either be too drunk or simply won’t care who bought a round.

Warning: don’t try this trick with friends unless you don’t want them as mates anymore.

Reuse Teabags For Guests

Twice the life, half the price of shopping for more tea bags! When you’ve made their cup of tea don’t throw the bag away. The might say it’s a little weak in which case you’ll need to squeeze the teabag a little harder.

Warning: this crafty t but guaranteed to have guests running for the door if they catch you.

Sneaky Barbecue Tricks

Planning a barbecue? Even when you’re not skint or unemployed you always find there are lots of left-over’s. What a waste of money, eh? Instead of spending food that isn’t going to be eaten ask your guests to bring along food that they like. You’ll find that there will still be plenty left at the end of the day which you can freeze and reuse.

Warning: Do this too often and your guests will work out what you’re up to and you’ll end up having a barbecue all by your lonesome.

Do All Your Washing At Your Friends House

Save money on your water and electricity bills by claiming your washing machine has broken down. Now ask a friend if you could do your clothes washing at their house. If you really want to push your luck you could ask to use their tumble drier and iron.

Warning: you need to get your story straight. If you’re going to be doing your washing at your friends for a couple of weeks it will only be because, “The bloody repair man hasn’t turned again!”

I make that 12 tips in total. You might think that the last 5 were a bit tongue in cheek and, to be honest, do do I. People are actually doing this. Using their so-called “friends” might seem underhand but there are a lot of desperate people out there. Look at it another way: I’d prefer to help a friend out rather than let them succumb to really drastic measures to make ends meet.

Well, that’s it. This week’s series of posts on what to do when you lose your job is done and dusted. I hope you’ve enjoyed it. I also hope that it’s given you food for thought. After all, you never know when the hammer could fall on you. It happened to me a few years ago and it wasn’t a nice time, I can tell you.

Have a good weekend.