When it comes to investing, there are numerous questions that need to be asked, and lots of things which need to be properly understood before committing your hard-earned money
5 awkward money conversations you need to have
Nothing can bring up those cringe-worthy, uncomfortable exchanges quite like money can. The guidelines of the social contract tend to keep us all on the same page in most instances.
However, financial etiquette is an area that is either inadequately covered by this unwritten manifesto, or, apparently, is too open to interpretation. As a result, certain situations leave us with sweaty palms and a spluttering voice – regardless of whether we’re dealing with friends or strangers.
Here are five of the worst – or best, if sadism is your thing – situations, along with some advice on how to get through them.
1 – Saying no because you can’t afford it
Let’s face it, we live in a busy country. If the weather is good, it becomes a mad dash to fit as many activities in as we possibly can. If the mercury drops and the skies turn grey, it’s either straight to the pub, or a rapidly-hatched escape plan to head to warmer pastures. It leaves Facebook and Whatsapp groups constantly abound with a world of fun. Yet these things all cost money, and being the first of your friends to play the budget card not only defies the innate desire to enjoy life, but carries an element of humiliation. However, the best way to get through this one is to pull the band aid off. Engaging in the pre-fun hype will only make it harder to pull the plug later on. Besides, credibility with our friends can be rather important, so it’s best to say no from the outset, rather than bailing closer to the time. Otherwise next time you say you’re all in, they may not believe you!
2 - Don’t all rush for the bill at once!
We’ve all been there. A lovely meal with family and/or friends has its atmosphere punctured by the arrival of the bill. Does everyone make a move for it? Does nobody? Few things can top the latter for intolerable awkwardness. Eventually you make the leap to sort out who pays what – no easy task in itself. Do you pay for what you had? Split it? Have others abused the code by having four courses and some expensive drinks?
Knock this one on the head by having a bit of assertiveness about you, and suggest that the bill is split. After all, if you go out with the same group of friends, things should even out in the end, and trying to work things out to the last penny will only make you appear petty. However, if one or more members of the party has had an inordinate amount more or less than the rest, then they should be requested to chip in appropriately. A bit of a judgment call may be needed here!
3 – Splitting the Estate
Arguably the worst of the lot. A loved one has passed away, the subsequent weeks of grieving have been and gone, and there is no survived spouse to hold the fort. So who gets what? A recent Moneywise study found that over 60% of the UK’s adult population do not have a will. Even in the over-55 age bracket, the number was an astonishing 35%, meaning families are often left squabbling over assets not clearly bequeathed by the deceased. Standoffs and bad blood can quickly envelop relationships if the situation isn’t dealt with delicately, especially if it is a matter between siblings. But our solution is a simple one… Designate the belongings that carry little or no monetary value to those who would cherish them most, and split the rest evenly among immediate family. Once you start weighting it in favour of who was closest to the deceased, you’re headed into dangerous waters.
4 – Where’s my money, man….
So you’ve lent money to a friend, and you’re all too aware that there can be few confrontations more excruciating than the one where you have to remind them that it’s time to cough up. To make it worse, they plead poverty, but you’ve seen pictures of them on Facebook out socialising! Just remember that if he or she is late in repaying you, it is they who are in the wrong here – not you. Of course, you don’t want to upset the apple cart, so don’t go in guns blazing. However, this needs to be dealt with head on. Be polite and play nice, but leave them in no uncertain terms that not paying you is unacceptable – otherwise it will be you who is left out of pocket.
That said, our rule number one is… Don’t lend significant amounts to friends or family. Ever! And, if you do, at least put it in writing first!
5 – Talking money with your partner
He spent a truck load on a “good deal” for a new LED TV. She spent too much on holiday. He eats more than she does. She spends more on self-maintenance products. I earn more than he does. No, I do! Whether you’re a young couple living together, or one married for decades, these are inescapable thoughts or grievances, and can quickly result in growing bitterness and discontent in the ranks.
This will always be a difficult one to contend with because people are inherently different, and your perception of value will almost never be perfectly in sync with someone else’s – no matter how much you love each other. The best way to nip this one in the bud is to simply talk about it. The starting point is a strict budget – be that weekly or monthly. This gives both of you a clear outline of the funds collectively at your disposal, and once these parameters have been established, each person knows what they are working with.
Nevertheless, any purchase that falls outside of the regular and the mundane – regardless of cost - should be thoroughly discussed first. Can we afford it? What sacrifices do we need to make in order to make it viable? Will this affect our long-term savings? Compromise will be needed to reach a mutual agreement in such conversations, but this financial minefield can be safely negotiated if both parties are on a similar page. It need not end in tears! Like most things in a relationship, all this one requires is a little communication.
Not many will ever consider the above conversations to be a ball of fun, and the ability of money to generate tension with even the most familiar people in your life is indeed unique. However, chances are that such matters will crop up from time to time, and by sticking to the advice above, you’ll give yourself the best chance of getting the best result for you – without antagonising those you care about in the process.
Our website offers information about saving, investing, tax and other financial matters, but not personal advice. If you're not sure whether peer-to-peer lending is right for you, please seek independent financial advice, and if you decide to invest with Lending Works, please read our Key Lender Information PDF first.
For all the resilience the UK economy has shown, there is no doubt that this year's ISA season is set against a backdrop of uncertainty. Whatever the pros and cons, Brexit, and a lack of clarity on what our future economic relationship with the EU will look like, has left us at a crossroads.
The Lifetime ISA (LISA), announced in 2016, would prove to be one of George Osborne’s last flagship gestures to UK savers and investors as Chancellor, eventually launching against a backdrop of anti-climax a year later in April 2017.
As the tax year end approaches, the financial services industry readies itself for a flurry of activity. That's in large part because, with just a couple of months to go, the so-called 'ISA season' is upon us.
Over the last decade, there can be little dispute that the reputation of mainstream banks – and particularly the so-called ‘Big Four’ (HSBC, Barclays, Lloyds and RBS) – is at its lowest ebb.
The peer-to-peer (P2P) lending industry is now regulated by the Financial Conduct Authority (FCA). The regulatory framework has been designed to protect customers and promote effective competition.
Loan underwriting is the process that we undertake to analyse all of the information provided by each loan applicant and their credit file to assess whether or not that applicant meets our minimum loan criteria. As part of that process all data is verified, analysed and summarised to paint a picture of each applicant.
When you earn interest from a regular bank savings account, for example, the bank automatically deducts basic rate tax (currently 20%) before paying your interest. With interest earned from peer-to-peer lending, tax is not deducted automatically so lenders will need to declare their income to HMRC.
The starting gun has been fired to seek out Mark Carney's successor as Governor of the Bank of England (BoE), but he will nevertheless remain in his post until January 2020.
The vexing issue of social care, set against a backdrop of an ageing population trying to sustain itself, refuses to go away, and policy ideas invariably prove divisive.
On a daily basis, diligent readers of financial publications consume a wide range of economic data, which act as key performance indicators regarding the state of the UK economy.