wEAlth

3 simple steps to financial security…

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As you know from my previous posts I am trying to simplify my finances and the third piece of financial advice I have read that resonated with me is –

‘Each month put a small amount from your income into a savings account by standing order or direct debit’.

Putting money away from your income immediately,  before you have chance to spend it, is good advice and far better than thinking you will put away any money left at the end of the month –it probably won’t happen.  I could easily spend any spare cash on the above Household Shopping list – although this is an old list and some items I have bought and some turned out to be more wants than needs so have been removed from my list in my move to simplify and reduce stuff.

Therefore, doing it automatically by direct payment means there is absolutely no chance of spending it first and I think you adjust to the fact that your remaining disposable income is less and helps to keep your spending within this new limit.

Interestingly, there are a few accounts out there that offer a higher interest rate for saving a regular monthly amount and are perfect for this idea of putting away a portion of your income at the beginning of the month before you start to spend it.

I chose a Nationwide Flex Regular Saver account which has a 5% interest return over the year and I have set up a direct payment to put an amount into it at the beginning of each month.  You can put in any amount up to £500 a month so it accumulates over the year.  According to Martin Lewis’s savings calculator if I managed to save £500 a month over the year I would have a return of £160 interest.  To save that much would entail some serious economising on my part!

So there you have it – of all the books, articles and internet advice I have read I think this captures the ideas I think are most helpful –

  1. Spend less than you earn
  2. Devote an hour a week to staying on top of your money
  3. Each month put a small amount from your income into a savings account by standing order or direct debit

Incorporating these 3 simple steps into my daily finances should help me keep on track.

 

This weekend although many lucky bloggers have been out digging their gardens we have had rain and wind but I have used this indoor time to follow step 2 to stay on top of my finances and give my savings accounts a thorough overhaul.  As well as opening the Regular Saver account I have an ISA account recently matured and the money is just sitting in a very low 0.05% instant access account now and I need to reinvest.  I have looked at numerous possibilities – but should I go for 1 year, 2 year, 3 year, 4 year or five-year fixed rates?  In such indecisive circumstances I opt for the middle ground so I am edging towards a 3 year fixed.
My next project is to get rid of some stuff and make some extra money.

I have various large household items that I am going to try to sell on eBay (try being the operative word here!) – I have never done this before so if anyone out there is an experienced seller and can offer some good advice to a novice I would welcome your comments to get me started.

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6 thoughts on “3 simple steps to financial security…”

  1. Thanks for leaving a comment on my blog! I took off ‘anonymous’ comments so any one can comment now! I think you are wise to get your finances in order. I need to sit down with my husband and come up with a finance plan! With regards to ebay – I haven’t had any success selling as I wasn’t prepared to sell my items dirt cheap and therefore didn’t get any buyers. If you do decide to sell on ebay try to do it when they offer free listings. If you have many items that aren’t ‘valuable’ you could try selling at car boot sales or if you have valuable items try auctions? Good luck and let us know if you have any success selling. 🙂

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    1. sorry if you have had anonymous problems but pleased I can now comment at last. I’ll take on board your commments about listing – our items are things that were intended for our cottage before the flood and we no longer need. Not valuable as such but hopefully someone might make use of.

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  2. If it is a large item, ensure you state buyer to collect only in the listing, upload as many photos as you can from all angles, give clear dimensions of furniture for example in your listing and only list from 99p if you are really happy to sell at that price.

    I once won an auction for an armchair at 99p and the seller was quite rude and off hand with me. I don’t think he really wanted to sell it at that price, so I didn’t collect it. He made me feel really bad like I was cheating him or something. Also, without sounding super untrusting, if anyone is coming to my house to collect, for safety’s sake, I try to ensure that I’m not home alone. Good luck with your selling.

    On the money front, I’m complying with the second two of your tips, but I really struggle with the first, although I’m trying to make sure I get into this habit by the end of this year.

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  3. Thank you for reminding me that I’ve been meaning to set up an autopay to our savings account for some time. Some of these things so easily get buried in the long to-do list. I have no personal experience with e-bay, but I recall my daughter’s first foray there. She listed her entire collection of expensive and relatively unique porcelain dolls, not realizing that she had to specify the lowest bid she would accept. When she received only one bid, a bid unworthy of a single one of the dolls, she found she was forced to accept it and ended up paying far more in shipping costs than the bid netted her. Make sure you understand the fine print!

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