money4dentists
Richard T Lishman founded money4dentists in the 1990’s and is now the principal. money4dentists have won 5 independent financial awards in the last 2 years alone for the quality of service they provide dentists in all aspects of financial planning, and are recognised as being the leading specialist IFA’s to dentists in the UK.
The money4dentists group of companies offer a one stop shop for dentists from their highly qualified team, and advise areas on such as financial planning, tax, accountancy and law.
The money4dentists team lecture on a regular basis to LDC’s, VDP’s, MoD, and other specialist groups & Organisations such as DentEd and the DPA to ensure dentists are kept up to date with changes within the financial world that could effect dentists.
In this issue Richard is going to cover some useful hints, tricks and tips on how to save money. Some you may already know but need a gentle reminder to “do it”, however, others will be new.
Let’s save you some money
It is no secret that dentists are no different to any other professional, in that they like to save money. Even though many of them are high earners, they still like a “deal”. I would like to share a few ideas on ways to save money, and by changing just a little to your daily routine, you could save a lot of money a small fortune!
Property
1. Purchase a home in an area with good schools. Even if you never have children, strong school systems are a top priority for many home buyers. This will make selling easier and increases the chances that your property value will rise.
2. Get the shortest loan term you can afford. Usually the shorter the term, the higher your monthly repayments, but you’ll save much more in the long term due to paying less in interest charges.
3. Avoid purchasing a home with an “incurable defect.” A busy street, no parking or train tracks nearby will most likely get you a discount, but the house value will not increase as much in value as other homes in the area and you will have a much tougher job selling it when you need to.
4. Run the dishwasher only when it is full. A typical dishwasher costs about £60.00 – £100.00 a year to run with 80% of the cost due to heating the water needed to run it. Running a partially filled dishwasher two times will use twice as much energy as running a full load once since most dishwashers don’t have different load size settings.
5. Consider carefully before carrying out house renovations that will make your house one of the more expensive in your neighbourhood. For resale purposes, it’s better to own one of the less expensive houses in an expensive area.
6. Replace your old thermostat with a programmable model – they can save you £000′s over the years.
7. If you don’t have a programmable thermostat, you don’t need to set your thermostat at a warmer setting than normal when you first get up. This will not warm your home any faster and it usually results in excessive heating which costs you money – please tell my wife this one!!
8. If at all possible, install double-glazed windows in your house – Single pane windows, or windows that are improperly insulated can account for up to 15% of your heating costs. They are often low maintenance & can look nicer too, increasing the value of your home.
9. Turn off or lower the heating in rooms that are rarely used such as cloakrooms and close the doors. If you’re having guests to dinner, turn the heating on in that room a short while before they arrive – cloakrooms are generally the smallest rooms in the house, so will take hardly any time to warm up.
10. Once your house is up for sale, mystery shop the estate agency and judge how it promotes your property. Ask for properties of similar specification and see if they recommend yours, & you will also get an idea of the competition.
11. The most common route of purchasing a property with a partner is Joint Tenancy. However, if you have a partner, you may be able to reduce your liability to IHT by over £100,000 by switching the property from Joint Tenancy to Tenants in Common. This is where each of you own a stated percentage of the property – normally 50 per cent. This enables the property to be disposed of in your will more flexibly, which can help your heirs avoid Inheritance Tax.
12. A cost effective way to own land is by ‘annexing’. If you extend your fence to claim a piece of waste land at the end of your garden, then after 12 years you may be entitled to claim it as your own. (Statute of Limitations Act 1977). This is not a simple process though so make sure you use a solicitor.
Insurance
13. On Buildings insurance a common mistake is to cover the house’s market value (the amount it could be sold for), meaning many people are over insured and paying too much for their buildings insurance, when actually the amount you need to cover (called the sum insured) should be the rebuild value. Therefore location is less important than the value of materials, labour and architects fees. However it’s important that any building policy covers the cost of an alternative residence for you if your home were being rebuilt.
14. All insurance policy prices are based on risk assessments, so to cut the cost, cut the risk. Such things as getting approved locks and alarms, joining neighbourhood watch schemes will cut the cost of your policy.
15. Increasing the excess on your policy – This can reduce the cost by almost the amount of the excess!
16. Many dentists don’t really need Accident, Sickness & Unemployment insurance (ASU), and those that do can often get it for half the price available on the high street.
Bills
17. As the global demand for power threatens to outstrip supply, prices are rising. But that doesn’t mean you need to be paying over the odds. The domestic market for fuel is a competitive one and you can change supplier with a few clicks of your mouse. Your new supplier will take care of the formalities – you just pay less every month. Look at www.uswitch.com
18. As a Nation of obsessive DIY’ers, for around £100.00 you can take a course at your local adult education college to improve your skills needed to tackle most household repairs. You may even qualify for tax relief on the cost if you have BTL properties!!
19. Do you pay your insurance premiums by monthly instalments? If so, you are probably being charged a premium of between 15-20% APR for the privilege. In other words, if your home and car insurance bill for the year is £600.00, you’re paying up to £120.00 a year in interest by paying monthly. If you are in a position this year to save up for next year’s premiums in advance, you can save money by paying the whole lot in one go.
20. Turn off lights and use energy saving light bulbs.
21. Check the times when your heating comes on & goes off – shaving a few minutes each day off the time could save you quite a lot of money each year.
22. Switch off appliances at the plug which could reduce the risk of starting a fire and save £££ over the years.
23. Investigate whether a water meter would be cost effective – some advice suggests if you have more bedrooms in the property than people living there, you might be better off.
Grants
24. Property grants are available for loft insulation & draught proofing – contact Energy Action Grants Agency (EAGA) or www.freeinsulation.co.uk
25. Empty Property Grants – Payable in respect of work required to bring properties that have been empty for more than 6 months back into use.
26. Offset Mortgages – ideal for people that have good credit balances in a linked current account.
27. Everyone’s main home or Principal Private Residence (PPR) as the taxman catchily names it, is exempt from Capital Gains Tax (CGT) when sold, but any other properties you own attract CGT at your highest rate when sold. If you live in a property, then let it out at a later date, you will be exempt from CGT for a period.
28. Repay personal borrowing ahead of business borrowing as the latter receives tax relief against interest paid, whereas the former doesn’t.
Buy To Let
29. Don’t get emotional about buying property to let. Remember, as long as the figures add up & the property is in an area where lettings are relatively easy, do it!
30. Think neutral décor.
31. Choose hard wearing surfaces as prospective tenants do not always treat rental properties as they would their own.
32. Never take out extended warranties as these tend to be expensive for the cover you get. If you have, say four items (dishwasher, washing machine, oven & hob), this could cost in the region of £400.00 per annum. If you didn’t have the cover, this would free up this money to purchase new goods as & when old ones become faulty. Also remember you generally receive 12 months warranty with most new items anyway & in our experience most goods last around 4-5 years.
33. Check what other houses on the street have actually sold for to make sure you’re not paying over the odds – check on www.upmystreet.com
34. Buy property out of season to get a bargain, most people buy in the summer, so there is more competition. October to March tends to be the quietest time for the housing market, & this tends to be the best time for deals.
35. Re-negotiate the price if the survey shows any problems, however small. You may save more than the price of the survey.
36. Make sure you sell a property in a better condition than when you bought it.
37. Rent a room relief – you can rent a room within your home & receive up to £4,250 per annum tax free.
Practice Finance
38. Get your pension fund to buy your practice.
39. Set your practice mortgage up on an interest only basis and ensure your personal debts are paid off in full before paying off any business debt – after all you don’t get tax relief of up to 50% on your residential mortgage!
40. Have a handyman available who you can turn to at short notice for general repairs & maintenance – if a lock breaks its better paying a retired gentleman for an hour’s work than a locksmith £150!
I hope you enjoyed the read, and feel free to email me any additional money saving ideas at richard@money4dentists.com
