If you are looking to make a large purchase, or just want some extra money to play with every month, the best way to go about that is to ask your employer for a raise. If you have worked at a company for a long enough time (say a year) and have not yet received a raise, this could be the perfect time to go about it, especially if you are coming up to a review with your manager. In order to go about asking for a raise there are a number of factors you will need to look into first.

Firstly, find out what others at your level in your field are earning. This is easy to do over the Internet for a general idea, or if you work for a large company and have close friends at the same level as you asking politely might work. Do be aware though, that earnings are a private matter and if they do not want to answer you should never push them. If you find that you are not earning as much as others at your level then you are in a prime position to ask for a raise. You may still want to ask if you find that you are earning the same as others in your position, but you will need to go about it in a much more careful way.

Doing your research

Take a look at your employer’s financial situation. In the current climate many businesses are having to make cutbacks to make ends meet. If there are redundancies and cuts being made in your company then you will need to have a very good reason for wanting a raise, and should prepare yourself for still being told no in this situation. If your employer is in a healthy financial situation and seems to be taking on more employees, this may give you an opportunity to ask to take on more work in order to receive a raise. This would be the best way to go about asking to have your salary boosted, as you are offering more in terms of skill and labour to receive more financially.

Matching you expectations with your experience

Consider your own experience when preparing how to ask for your raise. If you are in a skilled position and have more experience and assets to the company than you are being given credit for, make a note of them. Perhaps someone else in your team is at a higher level and has less experience, try to work out how you can make the most of your skill and experience to benefit the company, and present this as an argument for a higher position and thus more pay. If you find that you are less experienced than others at your level, take into account what you have done and are continuing to do for the company on a day to day basis and use this as your jumping off point.

When preparing your argument, don’t talk about what you need in order to live on, as this comes across as desperate and unprofessional, but talk about what you deserve with regards to your skills and workload. Let your employer state their case to you and have counter arguments prepared to demonstrate a higher value and make your argument seem convincing and appropriate. Decide in advance what you are going to do if you request for higher pay is rejected and let your employer know what this case will be. You do not have to go as drastic as threatening to leave your job, but reaching a compromise saying that you will ask again after a specific amount of time, or asking to be considered for promotion in future.

What if your request is rejected?

If your request is rejected and you still need extra income, take a look into part time or weekend work to make ends meet. There are plenty of jobs you can do online or in your spare time that need not take up too much time or energy and will make you a little extra cash. Sales representatives for Avon or even Ann Summers can host one party per week and earn enough commission for a healthy amount of savings, or babysitting and dog walking could earn you a little extra cash. If your financial need is immediate and short term, look into payday loans as a short term solution. If you are only trying to make ends meet for one month because of an unexpected financial crisis, payday online loans are there to help you make ends meet. You can apply online and find that the money is in your account within 24 hours. Interest usually amounts to around £25 per £100 borrowed, so make sure that you will have enough in your pay cheque to pay it back in full the following month, but payday loans can really be a very helpful bridging loan for short term financial problems.

In the long term, wait a couple of months and then ask your employer for a meeting to discuss a possible raise again. If your request is rejected more than three times over the space of a year, it may be worth looking into a new job!

In the current financial climate, with banks cutting back on lending and price hikes making borrowing money a crucial way of staying afloat, having a bad credit rating can affect you far more negatively than ever before.

Credit checks are required in order to take out a loan, secure a mortgage and even to take out a mobile phone contract. A credit check tells lenders your credit history, and helps them to make a decision on whether you are an attractive prospect to lend to, ultimately making up their mind about giving you credit. A number of things can affect your credit rating. The most serious is defaulting on a loan or credit card, which makes you an undesirable customer for a number of years, but many little things can drag your credit rating down. Late payments on credit cards or loans, missing repayments and even unsuccessfully applying for credit one too many times can leave a mark on your credit rating, making it difficult to get credit later in life. You can find out how your credit rating stands by applying for a credit report from companies such as Experian or Equifax, who, for a fee, will send you your full credit report, which lists all of your credit activity and gives you an idea of where you stand.

Ways to improve your credit history

Should your credit rating not be looking as healthy as you might like, there are a number of ways that you can begin to rebuild your credit report.

• Bad credit history credit cards

Offered exclusively to high risk customers with bad credit ratings, these bad credit-credit cards give customers a chance to prove that they are capable of responsible borrowing. Giving small amounts of credit with clear repayment terms, spending little and often on a bad credit credit card, and then repaying the full amount (or at least over the minimum) every month, will start to rebuild your credit report and prove that you can make repayments in a timely fashion. The most important thing with this option is to ensure that you never spend more than you can afford to pay back, and stay as far from the credit limit as possible. These cards are exclusively designed to help customers rebuild their credit history and should not be looked at as a form of ‘free money’, or used to get further into debt.

• Check your credit history for discrepancies

Once you have obtained you credit report you should go over it carefully to make sure that everything makes sense to you. Mistakes can be made, and with so few customers checking in on their credit histories you may find that you have been marked down for a loan you haven’t applied for, a repayment noted as missed when it was made in full and on time and so on. Correcting these mistakes is relatively simple and will require you to contact both the lender involved and Experian/Equifax directly. Just one negative mistake on your credit report can drag your overall score down, so it is worth getting these mistakes rectified.

• Keep up to date with current borrowings

It is never to late to start repairing a bad credit rating, so if you still have debt with companies, even ones who have led to a bad mark on your credit report, try to keep up to date with them straight away. If the problem is that you are still struggling with debt, you will find that a lot of companies are very understanding if you call them to explain the problem. You may be able to work out different dates or smaller repayments to bring you up to date. Even if it takes longer to pay off your debt, as long as you are keeping within the limits of your credit agreement, regular repayments of debt can be used to start to improve your credit score. Try to see any current debt as an opportunity rather than a hindrance.

• Stop applying for credit

Every application for credit is noted on your credit score, and affects your rating negatively if you are rejected. If you have applied for a loan and been rejected it is worth getting your credit report and finding out why rather than applying for a loan with a new company. If you need a quick loan, and are in the position to pay it back in full, then payday loans do not require a credit check and can be deposited into your account within 24 hours. If you do need to take out a loan from a payday loans company, make sure that you are able to pay this back in full under the repayment terms (be they 30 days, 60 days or 120 days) and use this as an opportunity to relearn how to deal with debt. Improving your mindset about borrowing can quickly lead to improving your financial situation overall!

Along with moving house and job stress, financial struggles are one of the top reasons for excessive stress in life. We all need money to stay afloat, and managing your outgoings versus income, as well as trying to allow yourself a few of the things you want rather than just what you need all of the time is one of the most difficult challenges in day to day life. However much money you have, you are bound to want more as your threshold for what is in your reach shifts to accommodate your budget, and a common pitfall is spending everything you have every month, leaving nothing over for savings. Not knowing your limits and living right up to what your means allow each month is one reason so many people fall into the devastating debt cycle that can lead to severe financial troubles that can mar your life in the long term. Here we list the top 5 financial mistakes people make – and how to avoid them!

Frivolous spending

In today’s instant culture, money seems far more expendable than it used to. Think about your journey to work, you get on public transport, grab a cappuccino and a croissant, maybe pick up a paper for later on. Without thinking about it, you’ve probably already spent between £5 and £10 on items that not only did you not need, but you could easily have gotten for cheaper or even for free with a little prior thinking. Taking breakfast to work, walking in and checking the news online may mean putting in a little more effort but over the year it will save you hundreds of pounds, without you feeling deprived. This is the same for new technologies like mobile phone upgrades, video games and mp3 players. When they first come out they cost far more than a year down the line, and people will often buy them to stay up to date when they already have older versions of the same technology at home. If you have three old mobile phones lying around you probably don’t need another one until the price drops a bit!

Buying things you can’t afford on credit

Tying in with frivolous spending is buying expensive items on credit just because you can. Consumers often think that because they can get credit to cover a new television or expensive kitchen equipment that they can afford it. The truth is if you need to get it on credit then you can’t afford it. Saving up for a few months with money from your pay cheque means that when you do eventually buy the item it is yours outright, and the financial burden of paying for it has already passed. If you won’t be able to afford it after a few months of saving up, then it’s probably not a purchase that you should be making in the first place!

Subscriptions and memberships

Do you have a gym membership? Most working adults do or have done at some point. And how often do you go to the gym? A large percentage of people with gym memberships go less than once a week, and at a figure of around £50-£80 per month, it would be far cheaper to pay for one off exercise classes, run in the park or take up swimming twice a week. Similarly, if you’re paying for TV or music subscriptions that you are not using but think you might, one day, it is worth cancelling these and paying for them when you really want to use them. Subscriptions and memberships often get lost amongst your monthly spend as it is a regular payment, but it is money you don’t need to spend going out of your account for no reason, often just subscribing to a lifestyle rather than a service.

Living on borrowed money

Credit cards, overdrafts and loans all offer a quick solution to debt or financial struggles. However, these ways of obtaining cash all carry hefty interest rates, meaning although this money is yours in the immediate, in the long run not only do you need to pay this back, but you will be paying your own hard-earned cash out for the privilege. Often it seems like a good idea to take out a credit card when it is offered to you, or take a loan out for general spending, making your bank account look healthier in the process, but these are long term commitments, and if your situation changes you may find yourself living entirely off of money that isn’t actually yours, leaving you very little of your own money for savings and legitimate spending money of your own. It can be quite a negative experience mentally to feel that you have no money of your own, so it is best to avoid overdrafts or loans as expendable cash.

Living payday to payday

It is human nature to live within our means, spending everything we earn then waiting for the next pay cheque to come through for the process to begin again. But this is a dangerous cycle as it leaves you with very little wiggle room should your situation change, and stops you having a chance to save money for expensive purchases in the future. Also, spending that close to the line of your account/overdraft can lead to you accidentally going over your limit and paying excessive and unnecessary fees every month. Try to cut back on spending and save a little money in a high interest account every month. Payday loans can be a helpful way of staying out of your overdraft and away from longer term borrowing commitments, as long as they are used only for one-off times of financial struggle and paid off as soon as your next pay chque comes in. In this case, a payday loan is a short term and helpful way to make sure you stay afloat and that your borrowing ends as soon as the month does. After paying the loan off, look into opening a savings account and saving a little bit of extra cash every month (even just your daily cappuccino) to keep you out of debt in future!

Over the past few years, banks have increasingly come under fire for what have been deemed ‘unfair’ or ‘unexpected’ charges and penalties on customers’ accounts. Until relatively recently banks would apply charges of up to £30 per day to accounts as penalties for going into an unauthorised overdraft or bounced cheques or direct debits. As often this occurred a few days before a customer’s payday these charges would quickly rack up, costing upwards of £100 every time. If this happens more than once in a month, people quickly find themselves spending a sizable chunk of their monthly pay just on bank charges.

The official line from the banks

The banks explained bank charges as being for the necessary ‘administration’ caused by a customer borrowing unauthorised money, but customers soon became wise to the fact that it would cost more to keep charging these high rates day by day than to take a one off penalty payment. Also, if a person is struggling with their finances and unable to make it through the month on their pay cheque, the least helpful thing the bank could do would be to take more money from them, essentially making them even less better off month by month.

This prompted an investigation by the FSA (Financial Services Authority), who deemed the charges excessive and ruled that banks should charge no more than a £12 penalty charge for unauthorised borrowing, and that customers who have fallen foul of these high charges should be able to go to court to claim back their money.

At the same time, an investigation was made into Payment Protection Insurance (PPI) on bank loans. Often this has been applied to loans without it being pointed out to the customer in advance, and adds a sizable amount to the monthly payments, and how much a customer will be paying off of the loan in the long run. In many cases, PPI does not apply to the customer (for example in the case of those who are self-employed), meaning those customers are paying extra money for their loan for no reason.

Of course, PPI is a good idea for those in regular employment that are worried their situation might change, especially with the unstable financial climate making jobs more and more scarce. Payment protection in this case will save someone from having trouble making their loan repayments should they become unemployed, and is a useful safety net for people in jobs which may not be completely secure. However, as the banks have often added this to a loan contract without asking the customer in advance, and have skimmed over the contract before signing, consumers were upset that they had been paying for a service that they didn’t necessarily want. In the small print of these payment protection plans there is often a list of people who will be ineligible should they find themselves out of work, and this was often not discussed either, despite the bank being aware of the customer’s position when selling the loan.

The FSA deemed that banks should also pay back PPI payments to customers who has been mis-sold the insurance, leaving a huge number of consumers going through the courts to take back their overdraft and PPI charges. This is a lengthy process and is not always successful. So what can you do to avoid getting into these situations with the banks in the first place?

Short term cash crunches

If you are hoping to borrow money for a short space of time or unexpected expense, it is worth looking into taking out a payday loan. These loans remove the need for PPI as they are taken out over such a short space of time, and will save you from excessive and unnecessary bank charges by keeping your account topped up until your next pay cheque arrives. You tend to make a payment of around £25 in interest for every £100 taken out, which keeps the process simple enough for your to be able to manage your finances for the next month easily, and as their terms tend to be only a month you stay away from paying large amounts of interest over a long period of time.

Should you be looking for a longer term loan then a bank loan is the safest way to go, but make sure you have the terms laid out unequivocally for you, and that you know exactly what you are paying for. With payday loans the short amount of time and relatively low amounts of cash borrowed means that the whole period of debt is short and painless, but with a larger loan it is a much longer commitment, so it is always worth taking your time and asking the bank to explain everything to you – more than once if necessary!