Archive for the Personal Finance Category

Credit Crunch: A Survivor’s Guide – Seepage, Wastage – Being switch-conscious

Posted in Life..., Personal Finance, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on March 17, 2010 by stanleyriiks

Did you know it takes about 40-90 minutes to charge your phone? How long do you leave it plugged in? Once it’s fully charge, which most phones display, you’re just throwing money at the electricity company! Don’t overcharge! This goes for rechargeable batteries (which are much better value than regular ones so invest in some if you use a lot of batteries), electric toothbrushes, iPod (although you’re more likely to plug those into a PC.

Switch off at the plug, seepage means your electricity is draining away. For multiple plug sockets, videos, dvd players, microwaves, kettles that light up, internet routers/modems, anything with a display that is left on, will move that little electricity meter and cost you more money. Unless you use it your plugged in device as a clock turn it off! At the plug! Never ever use standby, it uses almost the same electricity as full power.

You can buy special plug sockets that power down certain PC accessories for you when you’re not using them. But how about not switching on your PC speakers when you’re messing around on myspace or downloading porn! If you don’t need it on then don’t plug it in!

And remember when you’re switch-conscious you are not only being good to your pocket but also to the environment.

Credit Crunch: A Survivor’s Guide – Smaller Portions, Bigger Savings

Posted in Life..., Personal Finance, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on March 12, 2010 by stanleyriiks

Have you ever seen a Weight-Watchers microwave meal? Have you tipped it out and tried to spread it out on a plate? I’m not having a go at Weight-Watcher here (Please don’t sue me!), most supermarket ready meals actually have similar portion sizes. When I tip one out onto a plate I’m struck by the smallness of them. When I cook (ok, when my girlf cooks) I don’t want to see the plate for food. To me a decent portion size is when I struggle to squeeze in dessert, and I can always squeeze in dessert!

But the supermarkets (and Weight-Watchers) are doing you a favour! If you can get used to those three-quarter sized portions you can save yourself a nice lot of money. Don’t actually buy the ready-meals, as we said before the bigger the bag of frozen chips, or the larger the packet of chicken, the better value it is, in general. But if you can squeeze down your portion size just slightly (you don’t want to starve yourself, and you don’t want to be so hungry that you need snacks!), you can save pounds every day.

It’s not about will power, it’s about what you are used to. At the moment I’m used to three lots of dessert, but previously I was used to one. So I’ll work my way back to the good old days when I didn’t spend more than twenty pounds a month on snacks.

Having mentioned snacks I have to say, as delightful as they taste, snacks are bad for the pocket. They are not good value. Often you can get two packets of crisps or a couple of mars bars for the same price as a meal.

Eat meals (slightly smaller portions), and may be dessert (I couldn’t go without dessert, life just wouldn’t be worth living!). Continue to decrease your portion size until you hit a good level, three-quarters, two-thirds; you know how much food you need. Don’t try to go too far, we’re trimming here, not cutting.

Which leads me nicely to my next tip: cut your hair shorter. Again, just a trim, although for the boys a buzz-cut is a great look! I have one myself. Saves on shampoo and conditioner as you don’t need to use so much.

Smaller portions actually works best with items that you don’t notice how much you use. But think about it, do you really need a handful of shampoo to wash your stubbly head? Do you really need to use that much bubble bath, or that much shower gel? Cutting back just a little on these regularly used (I certainly hope they are!) items, can save you pounds over the course of a month. Next time you do the washing put in a little less powder or gel, next time you do the washing-up use a little less washing-up liquid. There are many ways where you can save by using smaller portions and if won’t even matter to the quality of what you are doing.

Don’t fill your mouth with mouthwash. Buy an electric toothbrush (there are loads for less than £20.00), and just use a pea-sized squeeze of toothpaste instead of filling the entire manual brush. Your new electric toothbrush will pay for itself in a couple of years!

Remember: smaller portions equal bigger savings!

Credit Crunch: A Survivor’s Guide – Debt: The Enemy

Posted in Life..., Personal Finance, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on March 2, 2010 by stanleyriiks

Most of us have some form of debt.

If you don’t think debt it bad then think about this: the whole entire world went into recession in 2008/9, the main cause of this was debt. Too many people owed too much money and couldn’t afford to pay it back. Debt is always, and will forever be, the enemy.

The list below is not comprehensive, but it gives you an idea of the vileness of the debt. Each one is another layer further into the rings of hell. We start off with the cheapest form of debt, only two of which can be considered acceptable. After that you’re on the rocky road to hell!

Student Loans – From the Student Loans Company or a similar body. The rates on these are based on the rate of inflation, so they cost very little. Unfortunately you are limited by the amount you can borrow per year and you have to be a studying full-time. You don’t have to pay these back until you have a certain monthly income, rather than having to start paying it back as soon as you finish your studies.

Mortgage – Likely to be the largest amount of debt you will ever have (hopefully!). Although it may actually cost you £300,000 to pay off a £150,000 house, mortgages are generally the cheapest form of debt available. But, by overpaying your mortgage you can save thousands. By changing your lender and getting the best deals you can save hundreds of pounds a month, which you can use to pay it off faster, hence saving you several years of debt.

Unsecured Loans – Loan agreements vary, depending on the length of time, the amount you want and the lender. 7-15% is normal for a high-street leader. You can get them for home improvements or buying a new car. Also popular is consolidating credit-card debt.

Credit Card – Get back hellbeast! With rates of 18 to 35% normal, you could be paying off an iPod for 20 years if you only pay the minimum payment. Credit cards are basically a way for banks and merchants to lull you into a false sense of security, and slowly and methodically rob you of all your hard-earned wages.

There is only one reason to use a credit card, and there is only one sensible way to deal with the debt: pay it all off every month. Use a card that has added benefits, such as cash back or airmiles, or BA miles, but always always always pay off the credit card balance every month.

If you already have credit card debt (and don’t worry, it happens to us all) this is the biggest obstacle to have to deal with, and you do that by transferring your balance to 0% interest card for the length of the 0% period and trying to pay off as much as possible, and then moving the balance again once the period is up, preferably to another 0% on balances card and continuing to pay it off. If it’s too large for you to ever be able to pay it off in 18 to 24 months then it would be worth looking at an unsecured loan.

Storecards – The actual devil! I kid you not! Rates for storecards have come down a little in recent times, but 20 to 50% is not unheard of. Some of them do nice introductory offers, which might be worth looking in to, but read the fine print and know what you are signing up for. It could well be your soul you’re signing away! The storecard is the ultimate enemy!

You have to try to work your way out of the debt. The way to do this is to work your way out of the hole. The less you pay to service the debt (overdraft fees, interest, etc), the better off you are.

Try to never get into debt. Having debt means your money is not your own. If you’ve budgeted and you have £400.00 left and you have a load of credit-card bills then that £400.00 won’t last long. Most of what you will be paying back will be interest, which just means you’ll be paying nearly the same amount next month and the month after and the month after that! Don’t fall into the debt trap, and if you do, try to escape as soon as possible.

If you have debt what you are basically doing it throwing your money at your bank manager, or credit card company, or loan company. Throwing it, picking up big piles of cash and throwing it away.

Don’t do it, it’s wrong.

THE SNOWBALL: WARREN BUFFETT AND THE BUSINESS OF LIFE By Alice Shroeder – Reviewed

Posted in Life..., Personal Finance, Reviews, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on February 16, 2010 by stanleyriiks

Despite this being an epic book, I expected more.

How can you sum up the Oracle of Omaha? The most successful investor in the history of investing?

For a man over seventy years old, having his life described in a little over 700 pages gives us about a 100 pages per ten years. Even though the first page is so awash with description (of Buffett sitting in his office) that it’s difficult to read, what we don’t get in the full Warren Buffett. We get a version, the tight-fisted, thrifty, intelligent, teacher, who’s more at ease with numbers than he is with human beings, and certainly more comfortable dealing with a class room full of students than he is with his own children. A man obsessed with making money and keeping it. To the point where much of the time his family acted almost, but not quite, as a distraction, and Buffett doesn’t particularly like distractions.

The failure of this book is the lack of detail about some of Buffett’s investments. Probably the most important part of his life, not only for him but also for most of his readers. We get the glamorous stuff, and we also get the dirty stuff, but where’s the detail of the stuff that made him his money?

Most of the information contained in the book can be found on Buffett’s wikipedia entry. The details of his earlier life are interesting, and the milestones he achieved in his early years are quite extraordinary. But I want a map. I want to see what he invested in, at how much and why: I want a description of how he made his billions. I don’t understand how a book so huge and detailed about Buffett’s life but be so bereft of such important details.

For a financial analyst Shroeder doesn’t seem very interested in the money.

This is certainly an interesting book, and Warren’s life as a self-made man certainly holds your attention. But the missing details of his investments, the things that are skipped over, or just not even mentioned, serve to give us only half an image of this great investor.

Buffett is still my hero, with the knowledge gained from this book even more so. We share much in common, he had a paper-round, as did I. Buffett was making money as a child, as did I, once getting in trouble at school for telling my friends toys. Buffett also skirted a bit too close to the law, well, I’m refusing to comment on that! He was also buying shares before he was sixteen. I bought shares in my mother’s name because I was too young to have them in my own. Unfortunately, and I really don’t know what happened (perhaps discovering horror novels), but our paths diverged and I’m not a billionaire.

This is a personal and probably the most detailed of the books on Buffett, and yet it still doesn’t manage to capture the complete man. It does capture most of him, and it’s a moving story, but I almost feel short changed.

Amazing book, and yet still slightly disappointing.

Credit Crunch: A Survivor’s Guide – Shopping Intelligently: Part 2

Posted in Life..., Personal Finance, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on February 10, 2010 by stanleyriiks

We’re talking about groceries here, if you’re even thinking about any other kind of shop you need to stop right now. Unless you can’t eat it or drink it, or need it for washing, then don’t buy it.

Never ever go shopping without a list. Big mistake. Also, have something to eat and drink before you go, so you won’t be tempted to buy yourself a snack (this is my biggest problem, I go to buy myself some lunch and eat up with £20.00 worth of crisps, biscuits and chocolate!).

Stick to the list!

You will need to buy essentials, food, drinks, cleaning stuff, washing powders, you know the type of thing. Check out the offers, half price and buy one get one free (BOGOF) are the best. If they have something you will use, shampoo, shower gel, frozen pizza, toothpaste, get double you normally would. If it’s something you use all year-round such as shower gel, then stock up when it’s BOGOF. I recently bought sixteen bottles of Original Source Shower Gel in Tesco when they had a BOGOF offer which will keep me going for several months, at half the cost.

It’s important you don’t get carried away with offers. Never buy anything you might use just because it’s on sale, only things you will definitely use and are on your list.

If you do internet shopping it’s much easier to check all the offers, it’s how I choose half my shopping.

It’s also worth changing your supermarket once in a while. The big supermarkets will often send you a discount voucher to use online to entice you back, if you haven’t been there for a couple of months.

Shopping intelligently is about not buying more than you need, making offers work for you, and adding value to every purchase.

Credit Crunch: A Survivor’s Guide – Shopping Intelligently: False Economy, it’s not cheaper!

Posted in Life..., Personal Finance, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on January 21, 2010 by stanleyriiks

Don’t buy smaller than you can use.

A small tub of butter/spread is more expensive than a large one in terms of weight (per gram the smaller tub is more expensive). If you’re going to use a kilo tub before it goes off, which is fairly likely, then you are better off buying the larger one.  Buying the smaller one because it’s cheaper (although more expensive per gram, and therefore worse value) is false economy.

This works for almost all products, and supermarkets are now being quite helpful by giving the price of items and the grams, rolls, sheets, litres, cost.

Buy sixteen or eighteen rolls of toilet paper rather than four. (Can save £2.00 a month on average)

Buy a five-litre bottle of mineral water, or a six-pack instead of individual bottles. If you need to use smaller bottles for work or ease of use, buy a big one and a funnel and pour it in. Ok, so it’s slightly more work, but it’s less money. The average family can save over £100.00 a year by giving their kids small bottles filled with water from larger bottles. (Of course investing in a water filter jug and several filters will be even cheaper, it costs about 2p a litre. If you live in London and have to drink the hideously cloudy and foul-tasting recycled liquid, it may take a while to get used to it after Evian [trust me!]).

This also uses less packaging, which is good for the environment. Good for the environment can be good for you!

Use this technique for everything that doesn’t have a short shelf life, soft drinks, bottled water, toilet rolls, butter/spread, tinned goods, frozen goods. Doesn’t work so well for short-life products like milk, but work it out. If you can use a six pint bottle then it’s still better value than a four and a two pint, or three two pints.

You can save hundreds of pounds shopping this way.

Credit Crunch: Saving money without going without. The no pain savings plan.

Posted in Life..., Personal Finance, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on January 13, 2010 by stanleyriiks

You need to start thinking about how your money is spent and being aware of waste. Most of the things I’ll mention are just common sense. All of us waste money to a certain degree, and don’t think you don’t. If you are paying more than you should for something then that’s a waste. If you’re using something you don’t need to use then that’s a waste. If you can cut out as much waste as possible and live more efficiently then you will save money.

Get loyalty cards for everywhere that offers them for free, Sainsbury, Tesco, Iceland all offer loyalty cards. What better way of saving money than getting something for free, even if it is only one week’s worth a shopping a year, it all adds up!

Turn the light off when you leave a room (providing no one else is in there!). This can save you upwards of £5.00 a month.

Use Energy Saving light bulbs, good for the environment, good for your wallet! (can save you another £5.00 or more a month).

Reuse plastic bags, particularly in Sainsburys (where you can receive nectar points for using them) and Tesco (where you get clubcard points). (Can gain you £1.00 or more a year depending on how many shops you do a month).

Put on a jumper when it gets cold. Ok, so when it gets really cold you need to put on your heating, but only use your central heating to heat, then turn it off until the temperate gets low again, then turn it back on. Set your timer for the minimum time you need it and make sure you never have it on when nobody is home. (can save £20.00 or more).

Never put things on the radiator to dry! It will suck the into the wet towel and the room will not be as warm as it should be!

If there are rooms you don’t use, such at the hallway or spare room, shut those doors and turn off the radiators. Don’t heat rooms you don’t need to. It might also be worth turning it off in the kitchen, normally when you are in there (whilst cooking) it’s warm enough.

Go to bed early. Not only will you benefit from all that extra sleep, but you can turn off the lights and heating while you’re in bed.

You think that’s all a waste of time? That little lot could save you over £500.00 a year!

Credit Crunch: A Survivor’s Guide – Bills

Posted in Life..., Personal Finance, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , on January 7, 2010 by stanleyriiks

The easiest way to save money is to look at your regular outgoings (bills) and see if any of these can be made smaller.

Rent is a difficult one unless you’re willing to move, but downsizing or moving further out-of-town can help. Remember to check to see if commuting costs will increase and whether the cost of moving and the hassle is really worth it. I wouldn’t want saving some rent money to be my prime motivation for moving. Although my sister moved back in with our parents when she was younger for a couple of years to sort out her finance and get herself into a position to buy a house.

Electricity and gas can be easily compared on websites like uswitch.co.uk and www.moneysupermarket.com. You may also be able to save money on your insurance, whether it be home insurance, contents insurance, car insurance, travel insurance, you get the idea… Basically with any kind of insurance you have the potential to save money just by shopping around.

Look at packages of insurance, home and contents together, or annual travel insurance instead of individual holiday insurance if you go away more than once. Never buy the travel-agents insurance as it will probably be the most expensive.

I saved nearly 50% on my annual worldwide travel insurance.

Look at your transport situation. If you travel on public transport, look at travel-cards, Oyster cards, or if you’re lucky enough you might be able to walk to work. I gave up my motorbike and a ten-minute journey to and from work, and instead walk for half an hour there and back. It not only saves me money but it keeps me fit! That’s what I tell myself as I trudge home on a Friday in the pouring rain in the dark on a winter’s evening!

THE RIDE OF A LIFETIME By Paul Teutil, Sr with Mark Yost – Reviewed

Posted in Personal Finance, Reviews, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on December 31, 2009 by stanleyriiks

If you’re coming to this book as a fan of the show, as I was, if you’re thinking this is a business book, as I was, and are looking for insights into running your own business, as I was, then you’re in the wrong place.

This is a very basic management book. It contains very few business tips, there are a few time-worn management skills, many of which are basic common sense, and most of which are fairly obvious. The depth of the book, at nearly a hundred and fifty pages, isn’t worth mentioning. Reading the chapter titles will give you a very good idea of what to expect as Paul gives us his own person take on management. He’s obviously a big man with a good strong head on those broad shoulders, who tries to surround himself with good people.

He also has some serious issues with his parents and his troubled childhood, and he’s rightly proud of doing so well considering his upbringing and dealing with his own demons, in the form or drugs and alcohol, which he was addicted to for twenty years.

What comes across more than anything is that this is a hard-working man. He doesn’t have any special secrets or any special talent, but he does have the drive to succeed and a passion to do his best.

As a fan of OCC and American Choppers I can’t help but think of this as a cash-in. Perhaps not by Paul, who seems to think his wisdom is worth sharing, but more by the publishers, who haven’t pushed Paul at all to reveal how he managed to be a functioning alcoholic, and build two successful businesses.

If you’re looking for business insight then you would be better served with another book. If you’re looking for an OCC book then look elsewhere too. This is not a bad management book, but it’s not a bible, and it’s only one man’s opinion. And it’s very basic, barely backed up by experience.

This book is for those really interested in OCC and how Paul got started, and his management style. Which I would imagine is really only a few people.

The book doesn’t fail because of the OCC tie-up, it’s the only thing it has going for it. I can’t help thinking that as the season of American Chopper ends, with the family going in their separate direction, the future of OCC is going to be very different. Apart from the unknown daughter, the sons don’t particularly come out too well in the book either. And despite appearing so important to Senior in the book, the arguments and the way two of his sons are treated in the series and described in the book, it seems that his children won’t stand in the way of his success either. It seems that it is the end of OCC as it was, and that Senior is powering on by himself, and with his management tenets behind him, you have to worry that the future may well not be as bright as he thinks it is.

Credit Crunch: A Survivor’s Guide – Budgeting

Posted in Life..., Personal Finance, Uncategorized with tags , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , on December 14, 2009 by stanleyriiks

Budgeting is not scary, it’s not difficulty and it doesn’t take a genius to do it. You don’t need a degree in finance, or 25 year experience as an economist, nor to you need a financial advisor or book-keeper do it for you.

Budgeting is about knowing what your incomings are (wages normally), and your outgoings (mortgage/rent, utilities, telephone, cable, shopping, credit cards, etc).

Start out by printing off your monthly bank statement. If you haven’t got internet banking then sign-up now. The easiest way to have control of your money is to know how much you have and how much is coming out. This is budgeting.

Make a list of your income:

To make it simple and give you an example we’ll say you receive £1000 wages a month and you have no other income.

Now make a list of your direct debits, standing-orders, and any other monthly payments that you can’t get out of, this should not include any spending on shopping or food:

Rent:               £300.00

Electricity:             £100.00

Gas:                £100.00

Water:                         £20.00

Taxes:             £50.00

Insurance:             £10.00

Travel:             £20.00

So you start with £1000

When you’ve paid all of the above you’re left with: £400.00

This is your working budget. Spend more than this and you’re going into debt. Debt is the enemy! You should always try to spend within your budget. Food, clothes, going out, holidays, petrol, everything that is not a regular bill will come out of your working budget.

Check your bank regularly, internet banking and telephone banking are very helpful in making sure you are aware of your spending.

Budgeting is the opposite of dieting, but both work in the same (although opposite) way: there are only two ways to improve your situation, get more money in or spend less money. (Dieting is use more calories up or take less in).

Being aware of your financial situation, however bad it may be, is always helpful. Remember that knowledge is power.

Next time: Bills