All posts by Marianne

Freelance financial journalist, author and blogger with specialist interest in entrepreneurs, running your own business, stockmarkets, investment, trading strategies and savings

Nifty ways to save money on holiday

With the value of the pound having fallen dramatically as a result of the Referendum result last week, it’s time to think about how to make your holiday money go further.

Holiday money tips
Make your holiday pound go further

Whether you are on a budget holiday or going for something more luxurious, you can save £££ by organising your currency, parking and phone calls in advance – leaving you more spending money to enjoy while you are at your destination.

Cheap foreign currency: Airports are the worst places to change money as they give very poor rates compared to the high street. Buy your currency in advance from a local travel agent, or better, still, order it online from www.travelex.co.uk or www.postoffice.co.uk.

Best cards to use abroad: A lot of debit and credit cards really rack up the charges if you use them to shop abroad, and you can be hit by hefty fees if you withdraw cash via an ATM. This can amount to 3% of the purchase price or a £1.50 fee each time you spend. Beat the charges by opting for the Halifax Clarity card or The Post Office Platinum Card which charges no fees on purchases overseas and 0% interest on balance transfers for 22 months with no balance transfer fee.

Save money on calls abroad: if you have a Skype account you can use an internet café to make calls via a wi-fi network. Or you could use a service like Just Call which claims to cut the cost of landline calls overseas.

Find supercheap flights: If you can be really, really flexible, then a website like Cheap Flights  which has a bunch of bargains – some flight-only, some with accommodation. Many of the offers expire within days, but if you can travel with very short notice you could get a great deal. Also worth trying is Expedia.

Book airport car parks in advance: airport parking can be very costly if you turn up and park, so try booking ahead with Holiday Extras or Parking 4 Less which covers all the major UK airports.

Plan ahead for airport transfers: Instead of using expensive airport taxis when you arrive at your destination, why not pre-book your transfer to your hotel or apartment with a service like Shuttle Direct or Travel Republic and beat the queues as well as saving money.

Your debt management cheat sheet

Any debt that you are struggling to repay, that is keeping you awake at night, or that is affecting your relationships with other people, is one that needs to be tackled.Debts can mount up

Even so-called “good debt” – your mortgage, student loan, business investment loan – can turn bad if you can’t keep up the repayments or if it is taking its toll on your mental and physical health.

What are the warning signs that your debt has turned bad?

  • Making the minimum payment each month on your credit card
  • Using credit cards for essentials such as food shopping
  • Maxing out on your existing cards and your overdrafts
  • Juggling cards but never paying them off
  • Taking out a payday loan

Your debt cheat sheet

  1. Work out your total income each month including pay, benefits, and allowances
  2. Look through your bank statements and add up your regular monthly commitments – food, utility bills, mortgage or rent, council tax, travel
  3. Now add up your unsecured debt payments (credit cards and loans)
  4. Make a separate list of items that you regularly spend money on but are not essential – entertainment, gym membership, eating out, clothes, shoes and gadgets
  5. Work out where you could make savings and put together a spending plan which enables you to pay off chunks of your unsecured debt
  6. It’s best to tackle debts with the highest interest first, as these mount up the quickest and can potentially take the longest to pay off.
  7. Transfer debts with high interest rates onto a credit card with a 0% interest – but have a plan to pay this card off in monthly instalments so that the debt has gone by the end of the offer term.
  8. If you can’t do this, then pay off debts one by one, concentrating on increasing your monthly payments to reduce the interest you are paying on the outstanding sum.
  9. Make a note in your diary of when any deals or offers expire, so that you can plan in advance.
  10. When you are debt free start to put aside money in an instant access or regular savings account. As a rule of thumb, your emergency savings fund should be able to cover your regular outgoings for at least three months.

If you need help with debt advice there are a number of charities which offer free confidential help. They are:

StepChange

National Debtline

Citizens Advice

Don’t get carried away by Black Friday

Last year police were called in to help high street retailers break up scuffles between shoppers on Black Friday.
This year the date falls on November 27, and some online retailers and high street chains, including Asda, have admitted that they won’t be going all out to capitalise on this annual consumer feeding frenzy.
On the one hand, retailers shift significantly more merchandise than usual – last year John Lewis revealed that the Black Friday week had been its biggest trading week on record.
However, some retailers are starting to question whether it is commercially viable to give so much emphasis and discount so heavily just on a single day. Given that sales at the end of November 2014 seemed to cannibalise Christmas spending, many sellers found they had simply sold Christmas goods at discounted prices.
What’s more, shoppers appeared to be more savvy – targeting retailers for a particular item and showing no evidence of being loyal to that shop or store in the future.
No wonder retailers are wondering whether it is all really worth it, especially with the fights that break out in the electronics sections and the high probability that their website will crash under the strain of trying to process thousands of extra transactions.
For the smart shopper, Black Friday may be an opportunity to buy a large or high-value item that you have coveted for some time.
If you are thinking of using the sales frenzy in a fortnight’s time to get your big-ticket item then here are my top tips:
1. Research your product now – not all sales offer better value and shopping around might save you the hassle of trying to buy on the day.
2. Think about how you are going to fund the purchase – depending on your credit card’s interest-free period, you may get hit by your first instalment just after you have spent heavily on the Christmas festivities.
3. Plan what you are going to buy, and don’t get carried away. Bargains are not really good value if you buy something you didn’t really want or need.
4. Be mindful of your own psychology. Just because everyone else seems to be spending freely without thought doesn’t mean you need to join in. Resist the impulse to join the frenzy.
5. Don’t get hung up on the date. There are plenty of good deals around at present – for example at Boots, Argos and Worldstores – which offer three for two or discounts. These may be just as useful if you start to buy your Christmas presents now.

How to have a financially smart Christmas

It’s a time of year that tests even the most strong-minded of money managers. it’s a time when people end up in debt, and wish they could escape debt in the New Year. Whether it’s a passion for gadgets (iPhone, iPad); a rush round the shops for a new Christmas dress; the temptation of lovely food; or the desire to make your childrens’ wildest gift dreams come true, it’s an expensive time.

But it doesn’t have to be a financial hangover in January if you plan ahead in December. Here’s how to budget for Christmas, and have a happy Christmas without breaking the bank. This is my checklist for handling the family finances to ensure that I can be generous with my gift-giving, but cool-headed with my purchases:

Stay out of debt this Chrismas
How to budget for Christmas

1. Decide on a budget. Calculate what you can afford for the whole of your Christmas that includes food and drink, eating out, party-going, new clothes, presents and hotel costs. Girls, that means you have to include the spray tan and manicure for the Christmas ball in the calculations, no cheating.

2. Set aside a portion of your budget for presents, and make a list of what your friends and family would like. Take this list shopping (or use it to shop on the internet). This saves time, stops you buying rubbish and panicking at the last minute and spending lots because you feel guilty.

4. Shop when you have plenty of time. Impulse purchases are often the most expensive, and the least appropriate.

5. Personalise your gifts. If you are on a really tight budget this year you can spend time instead making a gift that means something to you and the person who will receive it – maybe a framed photograph or something you have made yourself.

6. When you have bought all you need, STOP. It’s easy to get carried away in the last few days before Christmas, especially with the wall-to-wall ads of perfect, happy families. You probably already have more food and more presents than you need, so don’t be lured into buying more.

7. Use a smart credit card that gives you plenty of time to pay back your balance.

8.  Price comparison websites are an easy way of cutting the cost of household essentials.

How to plan financially for Christmas

As the last quarter of 2015 begins, it’s time to start thinking about Christmas and other holiday shopping. Though autumn has only just begun, three months isn’t that long to spread out your spending, so get organised now and save yourself the usual holiday hangover in January.

Add up your budget, then divide it
If you receive bi-monthly paycheques, you only have about six or seven more until Christmas.

“Think about how much you can afford to spend, and create a budget per person,” says Wilma Allan, money coach and founder of The Money Midwife, which helps clients tackle money problems by focussing on the connection between mind and money. Consider each person on your list, including those that may crop up at the last minute or even including a buffer in case you realise you forgot someone. “Remember to include food and festivities in the budget and factor in the cost of going out. Put a price on everything. Then total it up and divide by the number of weeks you have left.”

Christmas shopping

The figure you come up with might be a shock, but it could also help you understand how you end up overspending every December.

“The pressure to buy for family, friends and neighbours is huge at this
time,” Allan says, “but you need to start from what you can afford to spend, not from what you feel you should spend.”

Take your weekly figure and determine how much you need to set aside
per paycheque (whether you get paid weekly, bi-monthly or monthly), and put that amount of cash in an envelope or a separate account specifically
for holiday spending, she says. Then you can either use that fund as you find gifts, or, if you want to wait for Black Friday and other deals, you’ll at least know you have the money waiting.

Use your credit card wisely, not as a crutch
Of course, one of the most common ways to pay for Christmas is to use a credit card. According to Bank of England statistics, credit card lending increased by £0.3 billion in December 2014 compared to the average increase of £0.2 billion in previous months.

Used wisely, cards can help you manage your spending, but you do need to think about how you will use them, rather than just running up debt with no plan to pay it off.

The first option would be to take the same “divide and conquer” method and apply it to your card spending and repayments rather than putting the money in a separate account or envelope. Figure out how much you can spend per paycheque, spend only that amount, then pay it off (even if this means making a payment or two before your bill is actually due). This route is helpful if you want to take advantage of any credit card rewards or if you simply prefer to spend on your card, but want to stay in budget.

Another option is to apply now for a card with a 0%  interest rate on purchases, says Andrew Hagger, founder and director of the independent money information service MoneyComms. However, there are a few catches to doing this. Often, to take advantage of these deals, you’ll have to make a minimum purchase within a certain period — usually 60 to 90 days — and you cannot make any late payments, or you’ll negate the offer, he says, leaving you with a high APR.

Some of the longest 0% deals on the market are 23 to 26 months, but it would be wise to have a plan to pay it off quickly, even if you won’t be paying interest. “You don’t want to be paying off your Christmas spending for two years,” says Hagger.

However, this route does allow you to divide your Christmas total by a few more weeks. You could set a goal to spend £700 on gifts and plan to pay it off between the end of September and the end of February. That would allow you to pay only £70 per bi-weekly paycheque — much more manageable than spending £117 per paycheque between September and December for the same total.

Start early to save later
Regardless of how you break up your winter spending, it’s still likely to save you some money if you start sooner rather than later.

First, it can keep you from overspending. If you only have a certain amount to spend, you might rethink adding gifts to your list at the last minute or giving in to the temptation of “great deals” that you don’t really need. Your funds will be limited, so you’re more likely to treat them a little more carefully.

Additionally, if you are already on the lookout for gifts now, you can avoid the last-minute panic that can lead to a more expensive purchase, or even paying more for hot-ticket items that get marked up at the last minute.

Finally, you’ll be paying ahead, before you reach the end of the holiday season, rather than paying backward. It may be much harder to be disciplined in paying something off that is, literally, last year’s news. If you have a plan now, and even start saving, you can be sure that your 2015 debt isn’t going to put a damper on your 2016 financial resolutions.

This article first appeared in Creditcards.com. For more articles see the news pages 

Which should you choose – student debit or credit account?

University students on their own for the first time often face a tough decision: apply for a credit card or make do with a student bank account and debit card?
The answer depends on how much experience you have in managing credit, and whether you think you will be able to control your spending, says Andrew Hagger, founder and director of the money information site MoneyComms.co.uk.

High school students walking down a corridor Image downloaded by Marianne Curphey at 13:19 on the 06/10/15

With enough discipline, a credit card can be great, Hagger says.
“After all, at 18 you are a young adult, so [it’s] fine to get one so long as you feel comfortable that you can use it in the right way,” he says. “However, you don’t want to be running up a balance of £5,000 and then only be able to afford to pay the minimum amount each month, while paying an interest rate of 18.9%. If you can use it wisely and pay it off in full each month, then it can be a useful financial tool.”student-debit-or-credit
You should also be sure to get a card that fits your personal needs,
Hagger says.
“Some credit cards have a maximum credit limit and some have a
minimum limit, for example,” he says. It may help to determine what you’ll use the card for (e.g., textbooks, groceries, emergencies) and estimate
how much you’ll need to put on it each month, then look for a card within those parameters.
However, Jane Tully, head of insight and engagement at the Money Advice Trust, which runs National Debtline, said credit cards should be used only
in certain circumstances, such as security deposits, overseas studies or other scenarios where a debit card isn’t accepted.
“Credit cards must be used with caution and only if you are sure that you will be able to meet repayments,” Tully said in her emailed response to questions. If you can’t be certain of this, she said, a credit card might not be suitable for your needs. You could find yourself in a serious financial situation, which could put your credit rating — and future borrowing — at risk.
Student bank accounts
For those who aren’t ready for credit, a student bank account may be the better choice. You’ll get a debit card, which will allow you to make online purchases or simply not carry cash. Most accounts come with interest-free overdrafts, allowing you to get a feel for credit without the interest or potential damage to your score.
“The most important piece of advice I can give students is to steer clear of the freebies and look at the account features and charges in detail,” says Hagger.
For instance, many student accounts offer free railcards or free overdrafts. However, “if you just took a £2,000 overdraft … and then later you found you needed an extra £1,000, then to add that on it would cost you an extra £154 a year, which far outweighs any freebies you might receive,” he says.
“It can be easy to be enticed by introductory offers and other joining incentives but consider how you will be using the account on a day-to-day basis and what features you may need — such as an overdraft or insurance for electronic devices — to make sure you get the most out of the account and you aren’t being stung by any expensive features you don’t use,” Tully said.
But Sharan Jaswal, education director at financial and enterprise charity MyBnk, warns overdrafts can be dangerous, too, if you fail to come out of overdraft before you graduate.
“With my overdraft, as soon as I graduated, the interest rate rose, and then other charges came into effect,” she says. “Even today, there is still variation in the charges made by the different bank account providers.”
Jaswal suggests looking for an account that won’t allow you to overdraw or at least one that lets you know you’re nearing your limit. At the very least, be sure you know all the terms and conditions of the account — something you should do regardless of what type of account you get, Tully said.
“There is a huge jump from living at home to being independent at university,” Jaswal says. “Everything comes at once — your overdraft, credit card and student loan all need to be managed and we explain to young people that they need to choose a financial product that suits their needs.”
“It is often a steep learning curve, and without a real commitment to budgeting in line with the money you have coming in, you can quickly find your finances spiralling out of control,” Tully said.
If you ever are concerned about your finances or are struggling to deal with debt, seek advice as soon as possible from your school’s student union, which provides on-campus help with finance and budgeting, or the National Union of Students (NUS). You can also seek a free debt charity such as National Debtline.

This article first appeared on Credit cards – see Credit Card News for more stories like this

The key to business success is just doing it

Sunset on the beach
Free your mind and your body

If you want to run a successful business, or are thinking of quitting your job for a new life of independence, then start training for a marathon now. Or a Channel Swim, or a triathalon, or a 5k fun run or anything which pushes you physically and challenges you to aim for a long-term goal.

There is an intimate link between body and mind. When you step out of your physical comfort zone and start pushing through the pain barrier you realise that you can accomplish plenty of stuff you thought was impossible. Committing to a medium or long term fitness goal also gives you a massive sense of purpose and achievement which carries over into other aspects of your life.

In a teleclass I held last night about how to launch a new business in a recession, many of the questions I was asked in advance centred on issues of safety and security. People wanted to know how to find the courage, and the finances, to step out of their comfort zone and leave their job.

You only have to look at characters like Richard Branson, who regularly challenges himself with wildly ambitious projects, to see the correlation between those who are successful at business and those who never stay in their comfort zone for long.  You don’t have to attempt a round-the-world balloon race to reap the benefits, though.

Some of the world’s most successful traders, (people who have made millions from buying and selling shares on the stockmarket), advocate regular exercise as a mental and physical discipline,  an antidote to stress and a source of creativity.

 

Who knows, this discipline might also give you the courage and inspiration to change your life in other ways, too.

What’s your price? Are you a commodity or a premium product?

Discretionary spending is down, people are dipping into their savings to maintain their lifestyle and the Age of Bling is behind us. In such a climate, only the brave would consider putting up their prices – or would they?

Pricing is one of the trickest issues for any business, but particularly challenging for a new or start-up business that is looking to establish market share and build a critical mass of customers to cover running costs. The key to deciding where to pitch your fees or price for your product depends on what you are offering to your customers. Here are the essential questions you need to ask yourself before setting a price:

1. Am I offering a commodity or a premium product? If you are simply looking to shift high volumes of basic goods where there is very little differentiation between your product and that of your competitor, then you are selling a commodity product and you will need to compete at the lowest price you can. Contrast this with a premium product like the Apple iPod. There are plenty of other great MP3 players on the market which play music as well as the Apple, but they are not selling the lifestyle image of cool and cutting-edge design.

2. Is my product unique? You can go a long way to making your product stand out from your competitors by looking again at your USP (unique selling point). What are the design, quality, service or unique customer experience that you offer that is not available from your competitors? What makes you special? Being able to identify and articulate this to your customers enables you to charge a higher price because you are delivering quantifiable value.

3. What is your brand? Are you going for top-end quality (bespoke furniture or clothing), mid-range quality, or budget fun? Can you offer a range of products to suit the demands of customers, rather than “one size fits all”? Can you offer a package that offers outstanding value while still making you a profit?

4. What is the ethos of your business? Look at a company like Smile, (the Co-op Bank) or First Direct. These are examples of businesses with a clear vision of how they wish to do business and treat customers. Smile takes an ethical stance while First Direct has invested heavily to ensure that it offers high quality customer service and responsive call centres. When you identify what inspires you and where the passion lies in your business, you can communicate this to customers in your interactions with them and your marketing literature.

5. How do you resolve problems? This is often the test of a well-structured operation and excellent staff training. Companies like Marks & Spencer, Lakeland, and John Lewis have all done exceptionally well in communicating that a positive customer experience is vital for repeat business. Given that clients and customers are now able to vent their frustrations much more publicly via social networking sites, it pays to have clear policies in place to deal with complaints. A customer who feels they have been treated well in the face of a difficulty is likely to become an advocate of your brand and your business.

In my next blog I’ll be looking at how to use social networking to market your brand and build customer relations.

Until then, best wishes, Marianne

Ten things they don’t tell you in business school about running your own business

Water lillies
Nurture your business

By Marianne Curphey

1. Business plans don’t work…. or rather, they don’t come to fruition in the ways you expect. When you have a fledging business it is very hard to predict the speed and way in which it will develop over the next year, never mind the next five years. So although it is important to have goals and objectives, don’t be too rigid in implementing them if new opportunities come along.

2. The business idea you start with won’t be the one you finish up with. One of the most exciting things about running your own business is watching it evolve into a bigger and better project than the one you started with. Dream big!

3. Nobody pays on time. Many a brilliant business has suffered and/or collapsed because creditors were tardy in paying up. Plan for late payment, and put measures in place to ensure you chase up unpaid invoices at regular intervals. This means having a robust system for logging work, invoices and payments, which will become more important as your business grows.

4. It’s harder work….and better fun than you could ever imagine. No more office politics, boring meetings, tiresome commutes to work…..but also no more being paid to chat by the water cooler or take long lunchbreaks.

5.People in PAYE jobs secretly think you watch daytime TV all the time. Some of them say it to your face. Relax, they’re just jealous. Disarm them by telling them how they too can make the break for freedom.

6. Cashflow, not a great business concept, is what keeps your business afloat in the long run. You can have a whole stadium’s worth of fantastic ideas, brilliantly executed, but if you don’t keep on top of your utility bills, tax payments, NI costs and other administrative tasks, your business will fail.

7. Diversification can save you in tough times. Try to think of as many ways as possible to monetise your ideas, both through active and passive sources of income. Think creatively.

8. Carry your business card everywhere. There is nowhere that’s out of bounds for networking, as long as you do it subtly and respectfully.

9. You are the brand. Your unique blend of skills and experience are what makes your business special.

10. Admin takes up about 50% of your time. When you plan your week, make sure you factor in enough time to deal with the boring stuff – bills, insurance, and well as the fun bits.

In my next blog I’ll be looking at how to manage your finances in a small business,

regards, Marianne