Financial Literacy – the three questions to ask yourself.

financial literacyFinancial literacy is something we should all have but unfortunately not all of us do. Getting our heads round all the financial terms can often be a headache but it is important that we are all aware of our finances and any problems that should arise.

Debt is one such problem that can spiral out of control if not financially literate. Survey results have shown that plenty of people don’t understand the difference between good and bad debt and sometimes can potentially make the wrong choice. Would you be able to differentiate between good debt and bad debt? In fact, do you have debt and you aren’t sure of which yours is?

A recent survey conducted by Wonga SA found that when over 18,000 of their South Africans were polled, 83.7% of people would take out credit to buy a house and 58.6% would do the same for university education. These are considered good debts as they are for advances in your life – broadening your education or starting a family. However, 5% would borrow for a holiday and 4.5% for things such as gadgets and fashion. These are considered bad debts – these are items or things that people spend money on that aren’t for the long term but for short term pleasure generally.

When it comes to financial literacy, there are three important things to ask yourself before making a purchase:

  • What’s it for? Is it for the long term or for short term pleasure?
  • Can you afford it? Have you got savings or available cash you can use or will you need to use credit? Can you afford the credit repayments?
  • What will it cost you? If using credit, what interest rates are you likely to incur?

 

Is it for a good debt, something that will benefit you and/or your family and friends in the long term – or is it for something short term, such as a holiday or the latest smartphone until the next new model comes along and you want to have that one instead? If taking out credit, can you afford to repay said credit once you have borrowed it or is this something you would struggle with? Have you considered the overall costs of taking out credit – how much interest are you paying on it, what amount does that mean you need to pay overall? These are all major questions that everyone should ask before making a big purchase and these are important to stop yourself from getting into dire financial situations.

We’ve all heard stories about people finding themselves in massive amounts of debt and not being able to see a way out. By being financially literate, knowing your worth and what you can realistically afford to spend and maybe even taking control of the situation by making major changes to your lifestyle and/or spending habits, you can save yourself from getting into sticky situations that you may find harder to get out of than just days before.

Top Five Tips on Fees for Not Having Medical Insurance

Everyone deserves the peace of mind that comes with access to an affordable health care coverage plan. Ironically the medical industry agrees as it turns out that not having medical insurance is officially against the law and now results in heavy fees. While affordable health care coverage does exist, understanding how much money you could stand to be charged might just be the motivation you need to start finding a plan. As of January 2016, you are now required to pay a variable amount of fees on your 2016 federal incomes tax filing as part of the penalty of not being covered. Here is a list of the most common fees you stand to bear if you don’t have medical insurance.

Circumstantial fees – If you fail to get yourself covered, fees can be calculated differently depending on your living situation. This can be calculated as a percentage of either your household annual income or a pre-determined amount for each individual in your household that is not covered with insurance. Thus, lower income families with few children will not be hit as hard as their wealthier counter parts. As you file your income taxes, you’ll be required to pay a fee if you went over 3 months despite having the funds. Visit “HealthCare.gov” to estimate your particular fee.

The Fee has risen – The fee for 2016 has risen by over 100% since 2015, from 325$ per person to 695$ per person. For families with a low income, this difference could be highly significant, so it is worth it to make sure you avoid this unnecessary cost. However, if 2.5% of your income exceeds 695$, you’ll end up paying that amount instead. Thus, your income is what will decide your fee above all else.

Time counts – Fees are calculated on a month by month basis. Thus, the more months you go without health coverage of any form, the more you can expect to pay with respect to the maximum amount. It is important that you make sure each member of your family is covered as there are no exceptions to the law unless you have mitigating circumstances.

Exemptions are available for some – Those with especially low incomes or other mitigating circumstances can be eligible for exemptions. However, it is never worth it to assume that you qualify without doing the due diligence. Check with “HealthCare.gov” to find out whether you truly do qualify to not pay the fee, and to be sure you may want to speak with a representative over the phone.

Sign up ASAP – The new law has been in effect since January 31st of 2016. So if you haven’t signed up for a coverage plan yet, you best begin now before you start accruing even higher fees. Before heading to “Healthcare.gov” however, you may want to shop around for the best dental insurance plans. Combining overall health insurance and dental insurance is one fast growing method of saving big. Some private coverage plans include dental insurance as part of an all-inclusive plan. If you have children, this can be a hugely important financial move.

Making Sure Your Money is Safe Online

Although there are some people who are reluctant to make purchases online due to security concerns, there is no doubt that online shopping is the preferred method of consumerism for many people. Home shopping and entertainment options, such as online betting, and gaming, are extremely popular, but it can be difficult to know what companies you can trust to take care of your card transactions.

People who aren’t so keen on making transactions via the internet are probably concerned about the security risks of divulging bank details online, and with so many reports of online scams in the media, this reluctance is perhaps understandable.

However, shopping online with reputable companies is a not just a convenience, but also a necessity for some people, but if you are concerned about just how secure your transactions may be, there are some things you can do to ensure you don’t fall prey to an online scam.

Choose Your Entertainment Wisely

As the number of online app and game purchases continue to rise, so does the opportunity for scammers to take money from unsuspecting consumers. Online entertainment provided by gaming, casino and sports betting companies can be safely accessed through reputable sites, such as Betway, that also work in conjunction with authorised payment methods. These sites also give you the option to make money, as well as ensuring your cash is protected, and Betway currently offers numerous incentives, such as the fact that they’ll match your deposit up to £500. When dealing with amounts in this range, it is therefore even more important to choose a trustworthy company to handle your transactions.

Have you Heard of the Company?

Reputable companies have secure methods of payment, ensuring your details are kept safe from prying eyes. Banks also protect you from online fraud by enabling you to process payments with extra precautions such as passwords. If you don’t recognise the company from which you are considering making a purchase, don’t use them, unless a trusted friend has already used them and can vouch for them. You should also be able to use authorised payment methods which protect your money and details, such as PayPal or password reliant transactions. These methods should be clearly advertised on the site, giving you peace of mind each time you use their services.

Protect Your Computer

If your device doesn’t have the appropriate anti-virus protection, you could be leaving yourself open to credit card fraud and online theft. Scammers and hackers could easily access your personal information, such as passwords and bank details, but with the right security package you can make sure you are protected. Invest in a high level package such as Norton or Avira and keep your details safe.