Tuesday, 22 July 2014

Savings and interest...

Weather wise, the past few days have been hot and humid and the next few are forecast to be the same. Today however, is very different. It is 20C, cloudy with a cool, brisk wind. I have on my thinking cap, it is cool and lovely!
 
Living a simple life which is often frugal, being able to save in any way in this household, is our number one priority. If you are in debt, you need to know how much, what kind and where to make savings in your 'entire' household to begin to tackle it. I use the word 'entire' to speak not only for everyone who lives with you, but 'entire' as in using your brain as well. Everyone who lives with you, should ideally being singing off the same page, many brains make 'light' work! Your debt will diminish more quickly if you are all able to face up to it and tackle it as a unit. If not, don't despair, you can still do something. Anything is always better than nothing.

There are many blog's around that offer better advice on this but here is how we do it.

We no longer need to be as frugal as we once did as our financial circumstances have changed over the years. Do we stop? No we don't. It would be so easy once finances are better to quickly revert to the old slip shod way of running your life. That is the road to ruin my friends and once travelled, you should never, ever, want to travel it again.

If any of you have monetary savings, how often do you check the interest rate? Most good on-line savings accounts, offer a reasonable rate for just one year. On the anniversary of them opening, it will drop down massively, usually to just a fraction of a percent. This includes ISA's (or the new ones NISA's), especially if they have a fixed rate. Write down the end date of any account and check it close to that date to see what the rate will change to.

For example, we have a monthly savings and a bills account. We try to keep it all with one bank for ease of transfer from one to another although the new banking system is quicker than the old. However, our rate finished on the 19th July so a couple of days before that, we started looking around. Not much out there, and our bank in particular is one of the least attractive. The first things we did was to get them to convert the old ones into new ones, lot less work for us!

As their rate is low but we still want to use them, the amount in there will be kept as low as it can. What isn't needed in the next month will live in a higher interest ex fixed rate ISA, whose rate has dropped but is paying out more than any savings account I can find and more than some ISA's.

Yes, it may seem a lot of work but as we check and move money around all the time, we are used to it. If a company isn't willing to invest in us, we don't invest in them.

The same thing applies to your mortgage, check it, could you get better elsewhere? If so, can you move it. If you can, do so, if you can't why not? Find out the reason then move when you can.

More next time.


5 comments:

  1. I agree entirely with your post, we changed our banking and savings to 123 account which pays 3% on balances over £1k and over up to £20k .there is a charge of £2 per month but we make that back on the direct debits cash back. This account is working really well for us and the interest makes a big difference, compared to what we were getting on the ISA's, even taking into consideration the small amount of tax we pay. Our only income is my hubby's small private pension and our savings and its important that we get the very best for our money. Being careful with money for the past 40 years is now just second nature. We have no mortgage and no debts, just a lovely simple life :-)

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  2. Several people I know have done that and in effect, (providing you don't need the £1000), it is treating the current account like a savings account but at much higher interest. I don't really know why more banks don't offer it.

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  3. We're just starting savings having finished the debts a couple of months ago.

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    1. Well done, keep on keeping on!

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  4. very good advice DC - it si worth shopping around!

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