The most important factor when choosing to manage your personal finances effectively is time. A greater time investment will almost always result in a greater financial return.

Therefore the sooner you start to manage your finances, the greater return and financial ease you will feel in the future. Many people fail to plan ahead, which results in struggling to juggle finances at a later point in life.

Money management should focus on four primary questions:

1.       What financial goals would you like to achieve?

2.       When can you expect to achieve them?

3.       What finances do you currently have?

4.       What level of risk would you make to achieve these targets?

Choosing somewhere to live is an essential in everybody’s lives, and therefore, buying a house will be the biggest financial purchase that people will make. The financial investment into a home will affect all your other finances.

Making big decisions on your lifestyle will affect your financial goals. If you consider a luxury holiday to be one of life’s essentials, you will have less money left over for savings and investments.

When do you want to retire? What expenses do you currently have? Deciding what your priorities are will help to determine what money you will have left.

It is worth assessing your current liabilities, as these expenditures and assets could be reduced or sold and free up money for the future.

Calculate how much spare money you have so that you can form an investment plan. Investments can vary dramatically. Some are high risk for higher reward or loss, and some are low risk for a steady growth on investment. It’s up to the individual to decide what level of risk you are prepared to make.

Once these considerations have been made and your plan is in places, it’s important to assess the decisions you’ve made and how they affect you on a day to day basis. You plan may be too restrictive, leaving you with not enough money to live on, or perhaps you could make greater short term sacrifices to benefit you in the long term.

A small amount of time spent on your current finances can be highly rewarding for your future.

Plans to split British bank Northen Rock in two which would allow for its partial sale has been granted by the European Union.

The divide would result in two separate banks forming and are already being described as the “good” and “bad” banks.

The “good” bank would offer new lending, retain some of the existing mortgages and hold its savers’ money.

The “bad” bank would be used to repay the existing government loans and hold the remaining loans.

 Decisions made by the EU to accept the move are seen by Northern Rock as “an important and positive step.”

Changes to the existing setup will be made towards the end of the year.

The EU revealed that the good portion of the bank would be expected to grow and then be sold to third party, with the bad bank allowing its assets to dissolve then becoming liquidated.

The good bank may be sold prior to the general election next year with potential buyers being speculated already, with Virgin and National Australia Bank, owner of Clydesdale and Yorkshire Bank, among the interested parties.

EU Competition Commissioner, Neelie Kroes, believes that the move would make the bank a good long-term option, revealing that “this decision demonstrates once again that the EU’s state aid rules provide an appropriate framework to allow state support for a sustainable restructuring of banks without giving individual banks an unfair competitive advantage.”

Whilst Jonathan Todd, European Commission spokesman, said caps would need to be applied for the duration that the good bank remains owned by the public.

Some of the caps include a balance sheet reduced to a quarter of its size prior to the crisis, not being the market leader for loan interest rates, a cap set to limit its lending to one-third of Northern Rock’s 2008 levels and also a cap on retail deposits to be slightly lower than the pre-crisis level.

An investigation was engaged by the EU into Northern Rock in April 2008, two months after its nationalisation.

The results from the investigation showed that the UK government was kept at a “necessary minimum”.

By 30 June, the bank had paid back approximately half the taxpayers’ £26.9bn loan and will gain a further £8bn from the government during the end of year restructuring.

The EU stated that the restructuring would reduce its market share to below half of its pre-crisis level and “correct the excessive expansion of Northern Rock pre-crisis.”

Northern Rock released a statement, saying “this approval is an essential requirement of the planned legal and capital restructure, which is central to the business plan for Northern Rock.”

“The restructure will strengthen the capital and liquidity position of Northern Rock significantly, and offers value for money to taxpayers” and it would be “business as usual” for its customers.

Are you trapped in the nasty circle of debts and want to get rid of the different type of debts? Then, debt consolidation is the economical and easy way to dispose of your existing debts that have high interest rates. Even bad credit borrowers can avail debt consolidation to pay off the loans and also to build their credit score.

With debt consolidation you can unify your numerous weekly payments into a fixed one. One of the main reasons behind the mounting debts of many is the excessive use of credit cards. Many people use credit card frequently as they are unaware of the huge interest rates they charge and hence fall into debt trap. These unmanaged debts piles up into a big heap thus creating chaos in the normal life of an individual. Falling credit scores and assaulted social status disrupts their day to day life and the only easy solution available to them is debt consolidation.

Debt consolidation is offered in two ways – Secured and Unsecured. Secured debt consolidation can be taken only with collateral; however you can get debt consolidation at lower interest rates for a longer repayment period. On the other hand, unsecured debt consolidation does not need any collateral, but the borrower has to pay higher rate of interest as the risk involved for the lender is more in an unsecured loan. People suffering from bankruptcy, CCJ, bad credit score and late payment can make use of debt consolidation to re-build their credit rating.

When you are opting for secured debt consolidation, one of your personal assets should be put forward as collateral and the loan amount that you get depends on your monthly income, repayment ability and credit rating. You can get up to 125% of the value of your collateral and the loan period can be anything between 3 to 25 years. Conversely, unsecured debt consolidation comes with higher rate of interest and the sanctioned amount will be less and also you may have to repay the amount within a shorter period.

You have to pay only one monthly installment when you opt for debt consolidation and also the variation in interest rates and fee structure will save you a lot of money. If you have too many unsecured loans, then you may end up repaying more towards interest than principal. So, it is always better to consolidate all your loans into a single loan as you have to make only one monthly installment and hence you can manage it in a better way. Also, there is absolutely no need to answer all those harassing calls from debt collectors and you can lead your life with immense peace of mind. You can also apply for debt consolidation online by visiting the lender’s site. You have to fill up the online form and the documentary works can also be done through the internet itself. Normally, the financial company processes your application and sanctions the loan within two weeks duration. But, beware of the fraudulent companies that lure the customers with attractive schemes, you have to check the fidelity and service of the lender before signing up the papers.

Even though the number of the UK population experiencing heavy debt burdens has been rising for some time, many people are still suffering in silence.  They seem to think that their problems will sort themselves out when in reality they need to act, and act NOW!

There are masses of debt consolidation services available in the UK, and while you may need to extend your payment terms, there is a real chance that you could soon see the pressure of debt being reduced.  These are not the fly by night characters which you see in the press, these are regulated companies who make a living out of advising people with debt problems and introducing them to other financial institutions.  While they do normally receive a commission for introducing you to a financial institution, the benefits are there for all to see.

So why do people not make more use of these services?

One of the main reasons why people seem afraid to own up to their financial troubles is pride and the worry of what people might say.  However as they say, pride comes before a fall, and the longer you leave it the deeper that fall will be.  Financial problems have a habit of mounting up once the rot sets in, and while initially you may have missed one payment, it can soon lead to you falling behind on your mortgage, your credit card payments, etc as you struggle to juggle the balls in the air.

Many people are also afraid of what the banks might say, and what they might do.  However, let’s not forget that it is in the interests of the bank to keep you away from bankruptcy, and the possibility that they may receive nothing.  They would much rather you refinanced your debts and paid a smaller amount back per month over a longer period.  They won’t do YOU any favours, but what may be beneficial for them may also be beneficial for you.

We cannot stress enough the need to face your financial worries head one, make use of the mass of debt consolidation services available throughout the UK.  You will be surprised how much the pressure starts to lift as soon as you make a positive move.  What are you waiting for?

The last 20 years has seen a massive increase in the amount of credit cards issues in the UK, not to mention a major pile of debt which has added up over the years.  Everyone seems to have the best intentions when they take out that new credit card, but few will ever payback the full amount, with credit card debt repayments often becoming a way of life for many. 

If you have any outstanding balances on your credit card you should consider a credit card debt consolidation program to bring your finances back under control.  Make use of the many interest free periods available on a range of credit cards, thereby reducing your interest payments in an instant and also allowing you to pay off more of the outstanding capital.

The credit card debt consolidation sector is now an established area of the finance industry which is showing substantial growth.  While you may ask yourself what is in it for the finance companies, you would be surprised how they are able to extract a £5 fee here a £5 fee there – fees which can add up across the years.  After the ongoing overdraft compensation situation is resolved we could well see the financial industry fight back, with many expecting the end of free banking, the end of charge free credit cards and more charges for the consumer to digest.

As Christmas approaches it has never been more important to get your finances into order and reduce your interest payments as much as possible.  Lower interest charges will give you the chance to reduce the actual debt owed, allowing you to be debt free quicker.