Friday, August 28th, 2009 at 9:21 am
The news that house prices rose at their highest rate in one month in July since 2004 will have brought a little cheer to some people’s lips while those still hoping to get on the housing ladder may be disappointed but with the August bank Holiday upon us there will be plenty of people deciding that a little diy home improvements will be the way to spend their long weekend.
DIY should, perhaps, come with a wealth warning though as diy home improvements often end up as a botched job that requires and even greater amount of money to have it fixed by a professional than it would have cost to have done in the first place. While the recession continues to take it’s toll many people with little previous knowledge or experience are tempted to do jobs around the home that are beyond their limited abilities in order to save money. This is in fact a false economy as it is predicted that Brits pay a massive £1.5 billion to fix DIY jobs gone wrong, adding to their already hefty household debts.
Figures have shown that over a third (38 per cent) of Brits choose to spend their bank holiday working on DIY jobs, and an amazing one in ten of those projects will have gone wrong. To add to the cost there are something like 250,000 people who suffer DIY-related injuries every year, but debt management company Kensington Financial Management Consultants warns that such DIY disasters could lead to further unwanted debts.
It may seem like a good idea to use the break to put up a few shelves or repaint the front room but bank holiday DIY can prove to be a very costly mistake if it all goes wrong. Common accidents include flooding caused by drilling through water pipes or damaging a tap, flat screen TVs falling off the wall, flat pack furniture collapsing, paint being spilt on carpets, broken glass and electrics short circuiting.
Mark Love from Kensington Financial Management Consultants says: “With the housing market struggling to improve there has been an increasing trend of ‘improve, don’t move’. This has lead many to undertake a spot of DIY in a bid to save cash. But this can end up costing more in the long-run and most Brits can’t afford to take on any more debts. For more ambitious jobs, we’d recommend saving up to get the work done professionally.”
The average house decreased in value by £62 every day during the last 12 months, so it’s probably only really worthwhile doing jobs that are absolutely necessary or that will increase the value of the property by more than the cost of the work.
Many people become over-ambitious when it comes to DIY so here are some tips to avoid throwing a spanner in the works-
- Manage your money and work out exactly how much you will need to spend on tools, materials and equipment to finish the job and make sure you stick to this budget.
- Check your tools and make sure they are in good working order to reduce the risk of mishaps. Check that any equipment you use carries British or European quality or standard marks in the manual.
- Know your limits – If you are unsure of the extent of the job, call in an experienced professional. This may work out both quicker and cheaper as you won’t have to fork out for specialist tools and you may get a better end result.
- Check your insurance policies to see what you are covered for in case of an accident and make sure you would be covered for any accidental damage.
- Rushing a job can lead to a botched job so make sure you have the time to finsih the job and don’t leave the job unfinished, or sharp tools lying around.
Work and play safe and have a great bank holiday.
Thursday, August 20th, 2009 at 9:18 am
We all buy things all the time and sometimes they are significant purchases that we notice but often we have habits and habitual behaviour that makes it all so common we hardly even notice. I have been looking at some figures for regular purchases and it starts to get scary when you look at them over long periods of time.
The habit might be a daily one like smoking which will cost perhaps £5 per day. Maybe that doesn’t sound so much. What if you look at it as £35 each week? Starting to notice it?£150 per month is enough to do something worthwhile with isn’t it? If you look at a whole year it comes out at £1825.00 which would pay for a decent holiday and over 40 years it comes to £73,000
- Daily Cost = £5.00
- Weekly Cost = £35.00
- Monthly Cost=£150.00
- Yearly Cos t= £1825.00
- 40 Year Cost=£73,000.00
It makes you think doesn’t it and I am not picking on smokers here. It’s all about regular habitual purchases and the same cost might apply to having a coffee and a cake or a couple of pints down the pub.
It applies to buying newspapers, magazines, bags of crisps, gym memberships and anything else you do on a regular basis.
How long do you have to work for the annual cost of any of these things. A regular smoker or a drinker might be working one hour in every day to pay for the habit. If you enjoy it and feel it is worth the cost then fine. I am not picking on any particular habit here but understanding how regular payments mount up and seeing the numbers should make you look at them and question if that is really how you want to spend your money.
Quit a daily habit and it might pay for your holiday or allow you to have another holiday. It might enable you to make an extra payment on your mortgage each year and cut the overall cost and length of your mortgage term quite significantly. We tend to focus on money on a day by day basis but looking at costs over the long term can give a broader perspective that might make you question some of those daily incidental expenses.
Wednesday, August 12th, 2009 at 9:08 am
There are new rules released today by the FSA for the financial industry and they say they require bonuses to be more closely linked with banking results to reduce the risk of bonuses encouraging risk taking by financial company employees. The rules are aimed at reducing the risk taking that many believe was the ultimate cause of the financial crisis we all have had to suffer.
The FSA say that they believe that the bonus culture was a factor rather than the cause of the banking crisis but I suspect many will take that with a large pinch of salt. If there had been no bonus culture would we face the current crisis? Probably not because there would not have been the incentives for staff to make the deals that turned out to be so bad for the banking industry.
This leads me on to wonder if bonuses are ever good for consumers. Bonuses are usually paid to staff to encourage them to be more productive and to generate more business for the company but does this have any bearing on consumers? Yes, it means that the staff will try to make sales to customers that they might not otherwise make. The customer may not even want the product but they might be persuaded by a member of staff who knows they will get a bonus if they can make the sale.
We saw a very good example of this with the promotion of credit cards and loans. People in the banking industry were expected and required to try to sell credit cards and loans at every opportunity. Many current credit card holders only have their credit cards because of a staff member trying to boost their bonus income and many of those credit card holders will wish they had never accepted the card.
It is hard to see how bonuses ever benefit the consumer. They always add additional costs to the company and often, it seems, the bonus encourages deals that are not good business for the company. There was once a time when people worked for their salary and always tried to do their best for the company without ever seeing a sniff of a bonus. If you are an asset to a company you would hope that company would show their appreciation with a salary increase. The idea that you retain good quality staff with bonuses is ridiculous as it just emphasises that the only thing that matters is the money and there is no loyalty whatsoever but maybe in this modern era that is the basic fact of life and business. Grab what you can and have no loyalty to anyone but yourself.
