What is Buy Now, Pay Later?

You’ve probably seen Buy Now, Pay Later while shopping online (some high street shops offer it, too). Choosing this option lets you delay paying for your purchases or split the cost into smaller instalments.

Some stores offer their own Buy Now, Pay Later programmes. Others partner with well-known brands to run it for them – for example, Klarna, Clearpay, Splitit and Laybuy.

All of these let you order or take home whatever you want, from clothes and accessories to games and gadgets. A few weeks later, the payment company collects the cash you owe from your bank account.

If you choose to pay in instalments, the company collects a smaller, set amount on the date you’ve agreed. This could be once a month, once a week or every fortnight, until you’ve paid it all back.

When would you use Buy Now, Pay Later?

The flexibility of paying later is especially tempting when:

• You haven’t been paid yet or are short of money, but can’t put off a purchase
• You like ordering several items to try at home before deciding which to keep
• You can’t get a credit card, or worry about the high interest they charge
• Paying in instalments just feels easier to cope with.

The Pay Later effect

Some customers say delayed payment can feel like getting stuff for free, or that it’s more affordable than it really is (because the instalments are smaller).

Because this masks how your money’s doing, you can end up either buying more stuff than you need, or burning through more cash than you mean to. Both can get tricky.

The problem with Buy Now, Pay Later

Buy Now, Pay Later isn’t the store just doing you a favour. You’re actually agreeing to borrow the money from a lender – put bluntly, it’s a type of debt.

Most Buy Now, Pay Later plans don’t charge interest, so you get all the flexibility but only repay the price of your purchases. However, this is only half the story. Just as with credit cards and loans, Buy Now, Pay Later is only free if you repay on time.

Deals vary between retailers and payment plans. Some don’t charge interest on repayments, others are interest-free for a limited time. Always check the details before signing up.

What happens if you miss a payment?

You can be charged late fees on top of what you owe (so now you’re paying more than the cost of your purchases).

Things get stickier if you don’t get back on track ASAP. Your details might be passed to a debt collection agency. Their demands to pay up can be frightening.

Falling into debt could also damage your credit history. This can make it harder or more expensive to get financial services in future – and it can be a real pain.

It’s worth remembering even small changes can turn up the heat. For instance, an extra night out one month could mean you don’t have enough in your bank account to cover an instalment.

This can trigger the lender’s late payment penalties or push you into debt with your bank or other bill providers. Staying organised is the key to getting credit without the hassle.

Have a plan

• Remember it’s called Pay Later for a reason. You have to pay back whatever you spend – it’s not free!
• Don’t assume all payment plans work the same way. Some charge interest, others have expensive late fees. Check the small print each time.
• Make a budget and keep it up-to-date. This is the best way to be sure you can afford your spending or can cover instalments.
• Already paying off one purchase? Think hard before taking on more. The more payment dates you have to juggle, the harder it is to keep up.
• Set alerts and reminders on your phone to check your bank balance before payments are taken.
• If you fall behind, get onto the payment company pronto (some might pause or rejig instalments to help you). Don’t ghost them – it’ll only make it worse.
• Get professional advice from trustworthy organisations if you are struggling.

Buy Now, Pay Later can be a decent way of managing your finances if you’re disciplined about money.

If you’re using it to cover up money problems (like always being skint), you’re better off getting help to review your finances.

Ultimately, Buy Now, Pay Later is a form of credit. It can give you finances a temporary boost, but it can bite back if you take your eye off the ball.

@ruthbushi

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Earning money on the web could not be easier, and it’s very satisfying earning from your sofa! Here are my top five tips:

1) Earn cash for replacing online ads

Banner adverts popping up when you’re reading something online is incredibly annoying. The solution couldn’t be more perfect.

You can replace adverts when searching the web with feel good images of pugs and beaches – and get paid in credits every time you view them.

Gener8 ads is a browser extension that is a must have for your computer. Vouchers for Amazon and Netflix, as well as charity donations can be claimed from using it.

2) Make money through your Twitter/Instagram

If you have a decent social media following, you can turn it into cash through sponsored posting. Posting a story or tweet promoting a company can pay you anything from a few pounds up to £100s, depending on the size of your following.

Apps on your phone such as Tribe and Manifest will give you cash for posting about their campaigns. The highest paying ones have to be pre-submitted and negotiated on price before accepted.

3) Sell old DVD/games to CEX

While the shops might be closed, you can still send your old tech in a box to a reselling website like CEX, to exchange for either a voucher or cash. You’d be surprised at how much you get for things.

If you have an old Mario Kart Wii game in its original box – you’d get £13 in cash. Old Wii remotes get you £7 in cash. GTA 5 in its box gets you £11 for Playstation and £9 for Xbox One – the list goes on.

It’s worth checking the prices for your old tech to see if you have a gem in your old stash. My old Wii and Nintendo DS games fetched nearly £100 in cash.

4) Review new music and video ads for cash

If you’re a music buff, you can listen to brand new music and submit your opinions on it for cash. Slice the Pie is one of many review websites which can earn you some extra cash.

For every review you leave, you’ll build up some cash. The more in depth your reviews are, then the more you’ll earn. Although you earn cash in USD, you can withdraw in pounds via PayPal at a $10 minimum.

5) Sell your school notes

If you’ve been attending classes and written notes for school/university, you could sell them to fellow students for cash.

Websites such as Nexus Notes and Stuvia will let you upload your scribbling during lessons and set a price that you want to sell them at. If a fellow student downloads your notes, you’ll get some cash (minus commission).

The notes you submit have to be to a certain standard (there can’t be doodles and lines everywhere), but you can rewrite the badly written ones!

@Jordon_Cox

^{Photo credit: Pexels}

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There’s no getting around it: this is not an easy time for freelancers. Yes, you’re probably generally more used to working in isolation than others – but, given that we’re in the throes of a global pandemic right now, there’s considerably less work out there to actually do. 

Things will get better, but until then, here are a few ways you can get a handle on your financial situation.

Claim your benefits

First of all, it’s time to find out exactly what kind of money you’re entitled to from the government. You can check whether or not you’re eligible for the self-employment support scheme here.

The grant pays up to 80 percent of your usual profits, covering three months, and is capped at £7,500. As a general rule, in order for you to be eligible, your annual income needs to be under £50,000 and you need to make most of your money from sole trading. You’ll need to have paid your self-assessment tax for 2018/19, too. Not eligible for the grant? You could also try applying for Universal Credit to help you stay afloat.

Try something new

Now is the perfect time to explore areas of work you wouldn’t normally dabble in, using the skills you already have. For example, if you’re a journalist, you could take on some copywriting gigs – these tend to be better paid, with more opportunities readily available. It doesn’t need to be something you do forever, but it could really help during this tricky time.

If you really want to diversify your skill set and maximise your chances of getting work, why not take a professional course? Remember, if you pay for any training to do with your freelance career, you can offset the cost against your tax bill. There are plenty of free learning resources out there, too – try Skillshare or LinkedIn Learning.

Reach out

Don’t be afraid to reach out to previous clients who know and trust you, explain that you have a lot more free time than usual at the moment, and ask if they need anything from you. Companies are always likely to work with freelancers they’ve used before, and many will be glad to offer you gigs if they know you’re struggling.

You could also ask fellow freelancer friends to recommend you if they’re offered any work they can’t do. It’s all about those connections.

Make use of the downtime

Inevitably, there will be some quieter periods for freelancers while the world reckons with this new normal, so use this time to pitch to new clients and apply for opportunities you might not have had a spare minute to think about otherwise. Scour job boards, newsletters and Twitter for openings – work is out there, it’s just a little trickier to find at the moment.

Plus, free time doesn’t necessarily have to be a bad thing – it’s a good opportunity to deal with the admin side of your freelancing business, so that you can hit the ground running when things start to look more fruitful on the work front. Update your website, create an invoice template or make a list of coffee shops you’re going to work from when all this is over. If you’re feeling super-industrious, you could even file your 2019/2020 tax return early (but we really, really won’t judge you if you don’t).

rebeccahastings.co.uk
@rebz_hastings

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The secret to saving is to keep it small, keep it regular, and be realistic.  Thankfully, there is some brilliant tech out there that will help you make a start. You can do it!

Round up your spending

Most banks today are offering clever apps which will ‘save the change’ –  whenever you use your card they round up the difference to the nearest pound and sweep it into a savings account. Smaller spends mean you save more because think about it: a £2.50 coffee nets you the same saving – 50p – as a £29.50 meal out.  The interest, that’s the amount of money you earn from saving, is pretty low and sometimes even nothing on these accounts. But once the pot builds up a little (it will) you could shop around and look at moving it to a more generous savings account.

Nudge your way to higher saving

If you want to have a bit more control over your spending and saving, why not go for a chatbot like Cleo, Plum or Chip. They monitor your spending and work out when and how much you can afford to save. They’ll either do it automatically or send messages nudging you to save the suggested amount. In the meantime, they’ll help you budget by keeping an eye on your spending and telling you if your coffee habit is getting a BIT too out of control. Kinda like a cross between your mum and a financial adviser!

Easy like Sunday morning

This is your Yikes fund, the pot you’ll be glad to have if your boiler breaks down, your granny isn’t well and you need to go and visit, or you lose your job. Aim for a few months of your typical income, or enough to cover a rental deposit if you have to move out. (P.S. emergencies don’t include those shoes you MUST have or late-night pizzas!)

Be sure that your account is ‘easy access’ – you don’t want to have problems getting your money in a real emergency.  So avoid ‘notice’ accounts (where you have to wait) and investment accounts, which put your money in the stock market and are only suitable for REALLY long-term goals.

But going easy-access means you’ve got to be strict with yourself. If you can resist dipping into your Yikes fund during the good times, boy you’ll be glad when you do need it!

Suss out your savings goals

You’ll have other stuff you want to save up for, like a holiday, new tech or Christmas presents.   So figure out your short-term, medium-term and long-term goals. For shorter-term goals, you want easy-access accounts but in the medium-term, you can lock up your money for longer to get a better return: try looking at regular saver accounts, fixed-term bonds or even current accounts that offer great interest (just make sure you don’t use their overdrafts!)

For long-term goals which will take more than five years to achieve, you might want to consider investing. This is riskier because you might lose money. But historically, the stockmarket has produced more wallop than cash accounts across most timeframes. There are plenty of apps known as ‘robo-advisers’ which could could get you started.

Switch your savings mindset

 Finally, it’s crucial to get in the right mental zone for saving. Don’t think of it as a sacrifice but as an act of self-care. Remember, it’s still YOUR money: you’re just putting it one side to give yourself more options, choices and ultimately freedom in the future. That’s why saving is so empowering – and so worth doing.

It does mount up.  The consumer group ‘Which?’ reckons that just by sweeping your change, you might save £1.22 a day on a typical spend. That adds up to £450 over a year.  And imagine if you could target £10 a week on top of that. That would bring your yearly saving to almost £1000. Wow!

Good luck on your savings journey. Starting it today is a decision you won’t regret!

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Perhaps you absolutely smashed it out of the park when it came to your finances…I hope so! But the start of this New Year is the perfect time to ask: are there lessons we can learn to help us absolutely OWN our finances in the next decade? There sure are!

Spending has got a LOT easier.

The teenies was the decade that we started using debit cards – and specifically contactless debit cards – for EVERYTHING. Just tap and go, baby. Unfortunately, that has made us all far more likely to spend more, bust our budget and go into debt. When money becomes totally virtual, it’s tricky to get a handle on its REAL value.  So, as we go into a new decade, make sure you’ve got a grip on your spending. If you use contactless cards, at least make sure you also have an app that allows you to see your spending in real time, and categorise it so you know exactly where all the money is going. And maybe, just maybe, take some cash out once in a while to keep the spending in check. Just a thought! 

…and so has borrowing!

At the beginning of the teenies, thousands of young people were taking out instant, so-called ‘payday’ loans with hardy any credit checks. That didn’t end well, with dozens of lenders going bust and lots of borrowers getting into huge debt.

Towards the end of the decade, we started seeing a new debt danger: the rise of buy-now, pay later schemes like Klarna. These allow you to buy something, see if you like it then send it back, with no money changing hands. But if you keep anything, the bill’s due in exactly 30 days, and late payment will hurt your credit score, and therefore your borrowing prospects, in the future.

So before you click on the cute pizza icon at the checkout, think. Would you still buy this if you had the money? Do you really want or need it? I say stick to buying what you can afford right here, right now.

An overdraft is the quick fix, and from May an unarranged trip into the red will probably be cheaper, because the banks have been told to slash their super-high interest rates.  But the sensible, much cheaper, ‘agreed overdraft’ that many of us rely on will actually get more expensive. So be warned!

….but so has saving!

The teenies was the decade that the smartphone took over the world – and our finances! Today, we have a huge range of banking apps, which typically have

a “round-up” savings feature.  These round up the amount you spent to the nearest pound and transfer the difference from your current account into a savings account. You may also be able to choose when to round up or transfer spare cash, such as on payday. These apps are a game-changer for those who find active saving too difficult and well worth checking out next year, if you haven’t already. 

If you want to take things to the next level, you can now link your account to a chatbot like Plum or Cleo. It will analyse your spending, help you budget, flag up spending weaknesses (mine are beauty products!) and decide how much you can save and when to do it.

Social media rules

At the beginning of the decade, it was all about Facebook and Twitter. But later Instagram, YouTube, Snapchat and TikTok took over, partly thanks to the rise of influencer culture. As a new decade arrives, it’s important to keep influencers and their commercial activities in perspective. Numerous studies have shown a link between excessive time spent on these apps and mental health problems.

We view people who appear to have a better life than we do, and this can subconsciously influence us to spend money we can’t afford. Always remember that social media tends to present the edited highlights of other peoples’ lives, not the messy reality. Keep it real and resolve to live more IRL: it’ll do your finances (and your peace of mind!) the world of good.

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Set a financial goal you can stick to – if you were spending frivolously during the Christmas period, it’s likely that you’ll want to start the New Year with a resolution that includes managing your finances better. One of the common mistakes people make here is setting unrealistic financial goals that they can’t stick to – which in turn causes early disappointment, loss of motivation and before you know it everything goes downhill. If you need help creating a budget plan for the year, Money for Life’s ‘Penny to Pounds’ app is a great place to start.

Stay away from expensive takeaways – the winter season can be another cause for those January blues to creep in. As it’s the coldest, darkest time of year – most of us tend to feel sluggish and let’s admit it would rather just stay indoors snuggled up with a Deliveroo and Netflix right! But as tempting as it sounds, this can put a huge strain on your bank account. If comfort eating is a habit you find hard to let go of this time of year, try deleting all fast food apps from your phone so the temptation won’t be as easy. Also cooking in bulk and having your meals prepped for the week will do wonders on those days when you’re feeling lazy!

Volunteer – One of the best ways to break out of the dull routine of studying or working is to dedicate an hour or two a week to trying something new. Volunteering is not only a perfect way to help other people in the community – it’s also a way of meeting new people and improving your mental wellbeing. Whether it’s joining a charity, helping a neighbour, or walking someone’s dog – the satisfaction gained from knowing you’ve positively impacted someone’s life or made someone happy is what will also make you feel a lot better about yourself.

Get active – Aside from the obvious physical benefits of working out, there are also physiological ones too. Did you know, the chemical hormones released in your body when exercising naturally improves your mood by making you feel happier? Another great benefit of regular exercise is that it doesn’t have to cost a penny and provides a routine for you to stick to – which is also great for the mind and for staying productive. So, make plans with a friend or head to the park by yourself for a run or a nice long walk (have you hear of exercise snacking?).  Even socialising and being out and about can help.

Research and plan a holiday – Christmas isn’t easy on the wallet, and it’s certainly a key reason why many see January as such a depressing month. But there’s no reason why you can’t start making holiday plans for later in the year. Having something to look forward to can make the month fly by, and the search for hotels and things to see and do once you get there is a great motivator to keep going. If you’re really low on cash and/or desperate to get away sooner, check out towns or cities near to you that you’ve never explored and consider a day trip or night there – a change of surroundings can do wonders for shifting the dreadful feeling that you’re going nowhere.

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On the day A-levels results come out, the internet is overflowing with articles about famous people who failed their exams. People like Jeremy Clarkson, Richard Branson, Prince Harry, and JK Rowling. The message is clear – you don’t need formal education to succeed in life.

However, what is left unsaid is that these are very special exceptions. As Jim Rohn said: “Formal education will make you a living. Self-education will make you a fortune.” He is right. You need education – both formal and informal to make it work for you. A combination of street-smart and book smart will go a long way. Always keep learning!

#2. You must buy a house young

Your dad bought a house when he was 24; I get it, but you don’t have to do the same. When your parents bought houses in their 20s, their lives and careers were more settled than they are these days.  Young people today are expected to change careers over ten times in their lives; research shows they change jobs much more often than that. These job changes often go hand in hand with geographic moves. What does this mean? It means you should pay less attention to studies suggesting buying a house is a great idea but genuinely think about why you’d want to buy a house (tangible reasons or societal pressure reasons?) and do the math of if it’s worth it. Renting a home is not a waste of money; it can be the smart thing to do until you settle down.

#3. You must get, and keep a job

When I was in my early 20s, my path was clear; I’ll finish my education, get a job, marry a great guy, and live happily ever after. I finished my education and, much later, married a great guy. Jobs turned out to be a bit trickier. I moved to the other side of Europe and got a job. Still, failure to win work, or research funding, would have meant losing my job. You were taught to expect a job, and this isn’t working too well. Don’t feel down but think of smart ways to make money when life’s a bit tough.

#4. You must become an expert

An expert knows ‘a lot about very little’. Industrial societies valued experts highly. Times have changed and, with them, the knowledge, skills, and competencies valued by industry and business have too. Expert knowledge and skills are automated. Computer algorithms select and trade stocks, build machines, predict song success and write novels. Become a maverick who knows ‘a lot about a lot’ and leave the expertise to robots.

#5. You should learn to save money

Did your mum teach you how to save money? Most parents believe their children must learn how to save.  I think instead of learning how to save, you should learn how to spend mindfully. When there is nothing left of your wage once you’ve paid your bills it’s hard to save. Instead, learn how to spend mindfully and potentially attend a money management workshop or two, to help you with your spending habits and spending mindfully.

#6. Money doesn’t grow on trees

‘Money doesn’t grow on trees.’ – my dad used to say. What did I learn? I learned making money is hard and opportunities can be scarce. But also, guess what? Money can grow on trees, and money-making opportunities are plentiful. It’s all about learning to spot and implement great ideas. You’d be surprised how many opportunities to make some money are out there. And if you decide to start some side freelancing, make sure to get financially rewarded for your work. Check out the Multi-Hyphen Method book by Emma Gannon or the Creative Rebels podcast if you need any inspiration!

Finally…

Now you know the money lessons it is time to put this knowledge to good work and practice. Here are seven money lessons to replace the outdated ones:

• Learn something new every day; become slightly better at life and money every day.
• Rent your home without feeling like a failure; you can still win the game of wealth.
• Focus on work rather than jobs; you’ll get further and earn more.
• Become a maverick and expend your competences and skills; all the time.
• Learn how to spend money mindfully, and saving will take care of itself.
• Opportunities are plenty; learn to spot them and act fast.

Congratulations on taking steps to become a money master!

The post 6 Money Myths to let go of and Become a Money Master appeared first on Money For Life.

If you want to really understand what’s going on behind your bank balance and what you can do about it, this book needs to be at the top of your reading list. Emilie’s approach helps you take a frank look at your finances – debts, poor spending habits and all – and start addressing them today. She takes you through practical tools to understand where you stand financially and how your beliefs about money are affecting the way you manage it.

From there, the book takes you through a process of setting money goals and lays out straightforward and friendly advice for achieving them – from getting debt-free to making your first investment.

Whatever your money goals, these are efforts we shouldn’t be taking on alone, according to Alex Holder’s new book Open Up: Why Talking About Money Will Change Your Life.

Would you be willing to share with friends and colleagues how much you earn? Alex thinks we should be sharing this and much more. In chapter two she leads by example and puts a number on the advance she received for writing the book.

Open Up argues that on a personal level, taboos about money are trapping us in shame, confusion, and bad habits. And, as a country, more transparency could be part of the answer to tackling pay inequality across gender, age, and race. Alex’s book is an invitation to have a more honest conversation about money in our relationships, with friends and at work.

The long-term impact of learning to talk about, plan and manage your money is life-changing according to Money Lessons, Lisa Conway-Hughes’ guide to money management.

Lisa knows that when it comes to money, most of us are scared, stressed and busy burying our heads in the sand. Her book encourages you to step back, map out the future you want, and understand how your finances can help you get there.

The book sets out a challenge: “If you spent an hour a month nurturing your finances for the next twelve months, how would you feel this time next year?”

Why not pick up any of these three books and set aside half an hour today to get started on resetting your own relationship with money.

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Before you set off, check if your debit card charges you extra to use it abroad. It might sound dull but look through your account’s terms and conditions and search for terms such as “foreign exchange fee” or “non-sterling transaction fee” – some cards charge up to 3% of the transaction amount just for using your card in another country.

On top of this many cards also charge “purchase” fees when you pay by card, or ATM fees when you withdraw cash abroad. These tend to be from 50p to £1.50p each time.

These fees might not sound much but they can quickly add up. For example, if your card has a foreign exchange fee of 2.75% and purchase fee of £1, a £10 card transaction will cost a total of £11.28. Assuming you make two £10 card transactions every day during a fortnight’s holiday, you’ll pay nearly £36 in card fees – enough for a decent night out in some destinations.

Fortunately, not all debit cards charge these fees. App-only banks Monzo, Starling and Revolut are fee-free to use abroad and they have the bonus of categorising your spending to help you stick to a budget. You can also “freeze” these cards on your phone – handy if your card is lost or stolen.

Watch out for dynamic currency conversion

Whichever card you use abroad, you need to be aware of a sneaky trick called “dynamic currency conversion”. This happens when you pay by card and the retailer asks whether you want to pay in pounds or the local currency (e.g. Euros in Europe).

While it might sound a good idea to pay in pounds, you should say no every time as it won’t be the cheapest option. Paying in pounds allows the retailer to carry out a currency conversion calculation at a rate it chooses. If you pay in the local currency, your bank will do the calculation at a much better rate.

Watch out at the ATM as you’ll be asked the same question. Make sure you say “no” to the currency conversion offered – you’ll still be able to complete the transaction but at your bank’s more favourable rate, not the rate dreamt up by the local ATM.

Where to get your cash

Most people like to arrive in a foreign country with some of the local currency, rather than having to hunt for an ATM on arrival.

But where you buy your cash can make a big difference to how much you get. Each foreign exchange bureau will offer different rates and fee structures. Don’t be fooled by money changers claiming to be “commission-free” – they normally just offer worse rates to make their profit.

The question you need to ask is “How many euros/dollars/ etc. will I get for X number of pounds?”

In general, the best deals can be found by shopping around online and collecting your foreign currency in person. The worst rates are always found at the airport – so never wait until you’re airside to buy your foreign currency.

Budgeting

I don’t want to sound like a parent, but it’s a great idea to stick to a budget while on holiday. Work out how much spending money you can afford to take and divide it by the number of days you’re away – that’s your daily budget and you should make every effort to stick to it.

Alternatively, you could work out a budget for different types of spending on holiday such as excursions, food, drink and taxis. Remember, the more you can stick to your budget, the more holidays you can have…happy days!

Emma has been writing about personal finance for a range of national newspapers, specialist magazines and websites for the past 15 years. She prides herself on explaining complex subject matter in a way that’s easy to understand. 

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