plonkee money an english-er's thoughts on personal finance

October 29, 2008

what motivates you financially?

Filed under: Featured,philosophical — Tags: , , — plonkee @ 5:58 pm

Lots of people suggest that the best way to motivate yourself is to have a big goal. You know, like a house that you want to buy, or a vacation that you want to take. You’re supposed to picture yourself doing it and then ask whether you want the house/vacation/whatever more than the pair of shoes in the window, or the meal out.

I’m not sure why, but that’s never worked for me.

goals

The thing about saving towards a goal is that it needs to be of a certain size. One that is neither too easy, nor too hard. It also has to be something that you really want.

I’d love to travel overland from London to Singapore over 4-6 months. I reckon it would cost me in the region of £7k-£10k plus expenses in the UK of around £3k-£5k. Which is sort of doable if I really try singlemindedly for 3-5 years.

Only, I don’t want to give up my job, blog, house or oboe for 4-6 months. Nor do I want to cut back on the fun that I do have. I’d love to do it, but I don’t want it enough to sacrifice for as long as that.

sacrifice

I’m rubbish at this too. I’m not too bad at keeping to a generous budget, but if I have to really cut back a lot, I can’t keep it up for long. Like crash dieting, in the long run it seems to make things worse.

Mostly, I actually feel like I don’t have that much to sacrifice. I keep relatively well to an allowance, I don’t normally have a penchant for wild impulse buys. Undoubtedly my money leaks in small ways, but for me, right now, life is too short. As long as I spend less than I earn and save/invest the difference I’m ok.

the plonkee way?

I kind of half-heartedly motivate myself. I’m tired all the time. I really like everything that I do, it’s just that I spend too much time at work. In an ideal world, I’d only work 3 or 4 days a week.

The plan (formulated a year ago, more or less) is to maintain my income at around the level it currently is (inflation adjusted) and get payrises/promotions at work until I’m in a position to be able to only work 4 days a week.

This means being happy with the amount that I currently live on as a more or less permanent thing. So, I need to make sure that I spend (within my budget) on the things that I want to do because I’m not all that likely to find a magic way to afford them in the future either.

It means working for a promotion. (Another one). I’m earning around 15% less than I need to be to make the 4 day week thing work.

It’s a goal of sorts, but the whole point for me is that it isn’t one that I need to wave in front of myself to stop me buying. It’s got to be much, much more integrated than that. It means being happy with now and not waiting for the future, because the future’s going to look much the same but with more sleep and fun stuff.

It means working out how to live my ideal life with the budget I have now. Since travel is important to me, I’m taking regular budget trips abroad. I’m going to comedy clubs, meeting friends for drinks, and wearing clothes that suit me.

Now, is just as important as the future. That’s what motivates me.

October 23, 2008

finding personal finance information

Filed under: links — Tags: , — plonkee @ 12:00 pm

How do you find personal finance information?

I mean, if you read plonkee money, then hopefully you get some information from here, and there’s always the mighty google, but sometimes you don’t know exactly what you’re looking for. Where else do you turn?

The places I go for information depend on the sort of things that I’m looking for.

the best/cheapest financial products

With a full-time staff of five, the impartial and independent moneysavingexpert.com has the resources to find the best savings account rates, the best utility and insurance providers and a whole heap more. If I have something a specific product or service in mind, I’ll check here first to see if they can tell me where the best rates are.

tax rules

Nothing beats hearing it from the horse’s mouth. Unlike some organisations, information provided direct to the public by HMRC is reasonably clear and they make an effort to write in plain English. Sometimes there are jargon problems, though.

benefits, compensation, and other government policies

Direct.gov.uk has great information on all sorts of things, and is my first port of call. It acts as a portal, so will often lead you to other more useful sites.

how tos and opinions

Normally, I search some likely sites on my blogroll. Although most personal finance bloggers are American, if I’m looking for fairly general information, or some basic principles to start off with, or strident opinions that doesn’t much matter. The sites on my blogroll are essentially the ones that I read every day, and I have a reasonable idea bout who might have which information.

news

BBC all the way. Not without their bias although they aim to be impartial, they do at least make an effort to include international information. The website is easy to navigate and covers the salient information quickly.

anything else

If I’ve exhausted my usual sources, I get my best search skills out and spend time hunting around for the information that I need. Often, if I think it will interest anyone else, I’ll write it up into a post here – the power of knowledge comes in the sharing of it.

How do you find personal finance information? Are there any particular sources that you find yourself using again and again? Let me know in the comments.

October 22, 2008

the impact of the credit crunch on savings accounts

Filed under: savings — Tags: , — plonkee @ 12:00 pm

Funny things have been happening lately. There hadn’t been a run on a British bank for more than 100 years. Until there was one on Northern Rock last year.

Deposits in savings accounts are insured by the Financial Services Compensation Scheme. Unlike the American equivalent (where it is seldom but occasionally accessed), this has basically never been used for a regular bank. Until Landsbanki collapsed, bringing down it’s UK subsidiary Icesave.

Now I’m not one for keeping vast sums of money in savings accounts mainly because I don’t have vast sums of money. But this turn of events has highlighted nicely that nothing is without risk. Savings accounts are safe, but they are not risk-free. Your deposit is only as safe as the institution guaranteeing it – which might be the FSCS, the bank itself, or the government.

In practice, what does this mean?

If you live in a country with a big economy, there is no need to panic. You are not better off putting your money under your mattress. You will undoubtedly be burgled if you do that.

On the other hand, now is definitely not the time to put your money in an uninsured bank. That would be very silly.

I’d suggest general sensibleness. Stay under the insured limits, spreading money around multiple institutions if necessary. If you’re really nervous, then put your money in Northern Rock, or NS&I or something as they are backed by the government guarantee in full.

Usually at times like this, someone recommends buying gold. Indeed, people have been doing just that, which means that the price of gold is particularly high at the moment. Not entirely sure myself whether that makes it a good idea.

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