Whether we like it or not, financial products are a necessary part of everyday life. From paying our wages into a current account to insuring the cat, the list of financial products is endless. But what do we need? and more importantly what actually are they?
Financial products are used to help us manage our money, to provide us with a bit more financial security and to help us to save, invest, borrow and insure the things we love. Financial products are most commonly offered to us by banks and building societies as well as insurance companies and other lenders to name but a few. The most common financial products include:
Banking – for the majority of us, we need to put our hard earned cash somewhere safe and this normally means having a bank or building society current account. Unfortunately putting it under the bed simply won’t cut it these days. Here we can arrange an overdraft, budget our direct debits and set up a standing order amongst other things.
Savings – if you are lucky enough to have some money left over at the end of the month or you have received a windfall payment, putting money into a savings account can help you build a bigger nest egg for the future. Interest rates aren’t a deal breaker currently but earning money for it sitting in an account is a good way to watch your savings grow. There are many different types of savings accounts on the market, meeting everyone’s needs so do your research.
Borrowing – at some point it may be necessary to borrow money for the bigger things that we want in our lives, from purchasing for that car to buying our first house. Borrowing doesn’t have to be scary but choosing the right type of credit is very important so whether it’s a personal loan, credit card or mortgage that you need, again, always explore what the market has to offer first.
Investments – some people like to take a bit of risk with their money and investing in shares can be a way to boost your income. Remember though that these products carry a risk and it is possible to lose money too. Using a lump sum from your pension pot can also be invested but it is up to you whether you chose to play it safe or take a risk. Be careful though, this money has to last.
Insurance – it seems that everything needs to be insured these days. For some policies you wouldn’t be without – car, home and contents, life insurance for instance and others you might only want if they apply to your own personal circumstances. With insurance, it is always worth remembering that staying with your current insurance provider doesn’t always win you loyalty points so always look to see who can offer you a similar or even better deal. Always use trusted price comparison sites so don’t be lazy…switch.
As with any product or service we buy, choosing the best financial product for ourselves can be a complex decision and it takes time and effort to make sure we are getting the best deal for the right price. Remember these products are not just offered for our convenience, they make huge profits for the companies offering them so make sure that you are getting the most out of your financial products and make them work for you. Before you sign on the dotted line always ask yourself…
- Do I really need it?
- Is this the best deal on the market? Can I get it cheaper elsewhere?
- Do I understand the terms and conditions of the product?
- Does this product meet all of my needs?
Your right to cancel
With most financial products you sign up to, you should get at least 14 to 30 calendar days cooling off period to change your mind if you decide that you no longer need the product or you are having second thoughts. The cooling off terms as well as any additional conditions or penalties for cancelling should be explained to you so always check before you sign.