Smart saving tips for families

by Adam on October 31, 2014

The amount of cash that UK households are spending per household seems to be ever increasing, and it’s certainly top of mind for many of us as we head towards the festive season! (yes, it’s coming!)

 

Here are top 4 tips to start using today for your family’s budget


If you are the person who is responsible for the family’s budget, you should consider some of these strategies to keep your family’s personal finances looking healthy:

  • Ensure you are on the right energy tariff for you.

    It’s worth shopping around for your energy. You should be as diligent with this as you most likely are when you shop around for the best mobile phone contract or car insurance. It really can help save you money. And thanks to recent reforms in the energy market, things are now simpler, clearer and fairer – making it easier to check your existing energy deal and work out if you’d benefit from a change. You can learn about the best ways to shop around by visiting Go Energy Shopping. You can also learn all about the new changes that the UK government has introduced to make shopping around for energy easier and clearer than ever.

  • Check your transport costs.

    In a 2012 report on household spending, the ONS stated that transport was one of the biggest drainers of household cash. Transport ranges from motors to scooters. If your family lives close to school, consider walking children to school in the morning if it is close to your home. Using public transport to cut down on the effects of paying for petrol and diesel. We all know that the fuel pump is one of the most expensive aspects of life in the UK – avoid it and try different methods of transportation such walking and cycling which relies on your body and energy for power

  • Keep technology purchases to a minimum per quarter: The ONS also found that more families are spending household money to purchase items such as computers for the home. If this sounds like something you want to invest in, try and look for as many deals and bargains as possible such as using vouchers that you see in print media or checking online. This gives great value for money so you can best use your savings when purchasing a computer. While IT companies such as Apple might convince us that we need an iPad and a Mac book, look beyond the marketing before you buy. Be stringent with your technology purchases in order to balance your family’s budget each month.

  • Buy supermarket brands: This is an area that many families can find themselves overspending because after all, we all need painkillers for headaches and keeping the house clean is a priority. This is where plenty of savings can be had if families opt for supermarket brand versions instead of the market leading brands.

With a frugal grip on household budgeting thanks to these tips, you can manage your family’s money prudently so you don’t feel strapped for cash towards the end of the month.

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Whether you’re finding it slightly more difficult than usual to make ends meet, or you’re simply after that little bit of extra cash on the side to give you more financial freedom, being able to turn one of your favourite hobbies or pastimes into a genuine moneymaker is an essential skill for those of us who are looking to earn that little bit more than what our day jobs facilitate. You never know, if you follow the advice below, you might be able to quit your day job altogether and simoney making ideasmply run your home business full time.

Step One: Explore Your Passions and Select a Niche

If you want to be good at what you do, a good dictum to follow is to do what you love. If you can do this, you’ll be able to put your everything into the product you’re trying to sell, and after all, the best sales person is somebody who truly believes in what they’re selling. So, the way to achieve this is to go through your interests: fashion, jewellery, video games, comic books or anything else, and select the one that you know you’ll be able to dedicate all your spare time to selling without it getting boring. You also need to take into consideration your work process; we’ll discuss this in the next point.

Step Two: Create a Process and Refine Your Workflow

Once you’ve selected your niche, you need to define your process. Are you going to produce your own jewellery, or are you simply going to resell what other people have made? Are you going to design a smartphone game or an app, or are you going to buy classic arcade cabinets, restore them, and sell them on to collectors? Answering these questions will help you to generate a great business plan that you can work from, and that you can adapt and tweak when the need arises.

Step Three: Pleasing the Customer with Quality Service

The third point is probably the most important: customer service. If you really want to impress your customers, you need to leave them with a brilliant lasting impression. There are a number of ways to do this, from setting up a Facebook account and interacting with your customers, by producing an amazing FAQ section on your site to help your customers answer their own questions, or by delivering products on time across the world using a reliable courier like TNT Direct. You could offer the best customer advice, but if their purchase turns up late, your customer will still probably leave you a negative review.

So there you have it: three simple ways to transform your hobby into a genuine moneymaker.

Have any other ideas?

Share them in the comments!

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History of the Credit Card

by Adam on September 30, 2014

Using credit cardsThese days, most of us have a credit card tucked away in our purse or wallet. Some of us probably even have a lot more than one. Now, with so many different credit card types on the market, offering things from cashback rewards to air miles, they have become so much more than just a convenient way to pay. But credit cards haven’t always been available, so when did it all begin?

Though the credit card itself didn’t come about till the 20th century, the concept of credit has been around for a very long time.

The first recorded use dates back almost 3,000 years, to civilizations in ancient Egypt and Babylon, where merchants would allow customers to pay for an item at a later date if they didn’t have the means to pay then and there, after making a note of the due payments. Fast forward to the mid 1900’s and in the US, oil companies, as well as local department stores and petrol stations, had a similar system, creating charge accounts which could be accessed using a card for their customers in an effort to create customer loyalty. It is from this system that the first credit card stemmed from.

The Charg-It Card

The ‘Charg-It’ card is often considered as the world’s first actual credit card and was a concept thought up by Brooklyn banker, John Biggins back in 1946. The idea was that when a customer made a purchase, the bank would pay and the customer would be sent the bill later. It wasn’t without its catches though. The card could only be used to make purchases locally and unsurprisingly was only available to those customers who had a bank account at Biggins’ own bank.

Three years later, in 1949, a new credit card was developed with a rather fanciful tale behind its creation. The story goes, that Frank McNamara, the head of the Hamilton Credit Corporation was out for dinner at New York’s Major’s Cabin Grill along with his attorney and a man named Alfred Bloomingdale, the grandson of the founder of the famous store Bloomingdale’s. A discussion arose regarding one of McNamara’s problem customers who had borrowed money and was unable to pay it back in a short space of time. Embarrassingly, shortly after this conversation had ended, McNamara realised that he had forgotten his wallet and had no way of paying for the meal. He had to phone and tell his wife to come to the restaurant with some money from home.

The Diners Club Card

With thoughts of the problem customer still on his mind, and vowing never to be stuck in this situation again, McNamara came up with the concept of a credit card that could be used to pay at multiple locations. The three men present at the dinner, then got together some money and started a company called The Diners Club. The Diners Club Card saw a step away from individual companies offering their own credit to customers as previously seen and gave customers the chance to pay using one card across many different companies.

At first, the card was only used by a select few at a small selection of restaurants and entertainment venues (hence the name Diner Card) but by the end of its first year, it had spread with over 20,000 people using the card.

Again it was not without its catches. Customers didn’t pay interest, however they were charged an annual fee for using the card and had to pay their bills back in full at the end of each month. Also, companies that accepted the Diners Card, were charged 7% on each transaction made with it.

 

 

Wider Adoption

It wasn’t until 1958 that The Diners Card saw real competition in the form of American Express. American Express as a company had existed for a long time before this date, but it wasn’t until then that they turned their attention to credit cards. It was a year later that the company introduced the first ever plastic credit card that we are now so used to seeing. Up until then cards were made of paper or cardboard. In its first five years, American Express could boast over one million card users across approximately 85,000 establishments and soon became used worldwide. Similar to the Diners Club Card, the early American Express cards required users to pay back their bills in full at the end of each month and it wasn’t until 1987 that the company allowed users to pay across a longer period of time.

Though this put customers at the risk of getting themselves into debt, when used sensibly, it provided customers with more flexibility with their money, which is what we enjoy today.

 

 

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Looking to Sell Your House?

by Adam on September 18, 2014

If you’re in the UK and either buying or selling a house, you’ll definitely find this info-graphic very interesting. London House prices have doubled compared to the rest of the UK. This is the widest gap since the history books began.

 

UK-housing-Infographic

 

We Buy Any House is a professional UK based house buying service.  Check out the latest news section for housing views, news and opinions on the current state of the UK property market, learn more about them at www.webuyanyhouse.co.uk

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business IPOThere’s a internet company that soon will be worth more than Amazon.com

It’s often described as a cross between Amazon, Ebay, and Paypal.

It’s huge in China, and although not well known in the west, already owns stakes in companies you may have heard of like Uber, Lyft and the search engine app Quixey.

And you have an opportunity to get a piece of the action before its shares are publicly traded in a huge Initial Public Offering (IPO) when it starts trading on the New York Stock Exchange in the next few days.

Intrigued?

The Chinese company is called Alibaba and the huge internet e-commerce business is predicting its IPO will value itself at $167 billion if it prices at the high end of its range. As a comparison, Amazon has a $160 billion market cap. And for context, that little internet auction site eBay’s only has a $67 billion market valuation.

On a price per share basis, Alibaba’s new target IPO price range is between $66 and $68 a share (It was set initially between $60 and $66 a share.) and all this new money from the IPO (potentially $25 billion) will mean the site will have plenty of cash to put into research and possibly acquisitions of more Technology companies, so the future looks bright.
If you’re interested in investing in Alibaba, the self proclaimed ‘largest online and mobile commerce company in the world’, you cannot buy shares directly until the IPO, but there is a way to capitalise on the opportunity at this stage, through what’s known as the ‘Grey Market’.

A grey market is a parallel market which allows for the trade of a commodity, legally but unofficially.

IG allows you to trade on the Grey market for many pre-IPO companies including Alibaba: IG offers a Alibaba marketplace to invest in Alibaba before the IPO, and after.

At IG you can trade on their grey market before shares are released and do other things such as Spread bet, trade CFDs or use the stockbroking service to trade Alibaba shares after the IPO.

There’s a lot of demand for owning a piece of the internet giant because, quite simply, it sells so much stuff.

Using gross merchandise volume as a metric, the value of all the merchandise changing hands on a platform over a given time, Alibaba generated $248 billion of gross merchandise volume in 2013. Compare this to Amazon’s figure of $116 billion, according to estimates by IDC, and you can see what all the fuss is about.
In fact, if you add up the value of goods being exchanged on Alibaba, it’s greater than that of Amazon, eBay, JD.com (JD) and Japanese e-commerce giant Rakuten — combined.

Alibaba’s dominance may grow even further as China’s middle class continues to expand. So if you already have sensible diversified investments and want to speculate with what looks to be an investment with a lot of potential, then investing in Alibaba pre or post IPO could be what you’re looking for.

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Energy shopping One of the easiest ways to save extra money every month is to review your monthly bills.

  • Do you know how much is being taken out of bank account every month?
  • Are you using what you’re paying for?
  • Can you get a cheaper deal elsewhere?

You may find a few payments that you don’t need any more, perhaps a magazine subscription that you don’t read any more. Doing an audit of your direct debits and standing orders is a good place to start, but there’s always going to be payments that are unavoidable, like paying for energy.

A recent study by OFGEM revealed that almost half (43%) of those surveyed in Britain admit they don’t prioritise ‘energy shopping’ to find the best deal, despite the fact that it could save them precious pennies (and in many cases, a lot of pounds!).

You may not have checked your energy prices recently because you thought it was complicated, hard to compare, or you of the opinion that all energy companies are as bad as each other.

Thankfully, new reforms have now resulted in a simpler, clearer and fairer energy market for the UK, and there’s a new website launched to help you get the best deal: Go Energy Shopping.

 

What is Go Energy Shopping?

The Go Energy Shopping site has been set up by OFGEM, which stands for the Office of Gas and Electricity Markets. It’s a non-ministerial British government department and an independent National Regulatory Authority, recognised by EU Directives.

The purpose of OFGEM is to promote value for money, and make sure the energy market is being competitive and is keeping to government regulation and schemes. This means the Go Energy site has your best interests at heart.

 

Why Now?

It’s now easier than ever before to compare energy providers. There’s now only 4 core tariffs for gas from any energy supplier, just one pricing structure (standing charge, + unit rate), and just 2 cash discounts allowed – for dual fuel and for managing your account online.  These changes have been brought it to make energy pricing less confusing and easier to compare.

But how can you take advantage of it?

 

The 3 steps to Energy Shopping

1. Take Stock

The first step is getting all your papers together including recent bills and any letters you’ve been sent from your current provider. Look out of your annual consumption figures on the letters you should have been sent. You should also look for the name of the tariff you are on, and if there are any restrictions or ‘exit’ fees that may make switching energy suppliers less worthwhile at the moment.

Tackle Jargon

Don’t worry if you’re getting overwhelmed by the terminology and confusing words used on some bills and letters. The Go Energy Shopping has a helpful glossary  so you can tell the difference between ‘evergreen’ and ‘core’ tariffs and another  words.

 

2. Shop Around

Once you have all your information in one place, it’s time to go comparison shopping!  Helpfully OFGEM have compiled a list of sites that are OFGEM accredited.

These are sites that have been vetted to ensure they are independent, and include option and prices that are displayed fairly meaning you can be more confident about the results.

3. Take control and start saving on your energy

Once you’ve found a good deal you have two options: you can let the comparison site do all the work for you, getting your switched over, or you can contact your new preferred supplier yourself. Just make sure you pay any outstanding debts to your current provider to ensure the switch over goes without any delays.

 

For a more detailed full step-by-step downloadable guide to help choose and change your energy supplier, check it out here:

The guide shows how the recent changes to the energy market can help you to compare tariffs and get a better deal on your gas and electricity bills.

Once you’ve been through the above steps, there’s just one thing else to do: Remember to pat yourself of the back for going through the process. It can seem a bit of a hassle if you haven’t done it before but it really can be worth it, with savings of £200 possible in some cases!

For best results, take those magical penny energy savings and funnel them into your savings account or ISA to get a warm feeling inside as well as a warm feeling inside your home :)

 

 

 

This post is sponsored by OFGEM, a non-ministerial government department of the UK, who look out for the consumer’s best interests when it comes to energy.

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Have you noticed your household bills escalating?

Magical Penny has readers across the world but there’s a sizeable readership in the UK. Naturally I’m not surprised, as I’m British myself.

If you’re living in Britain I’m sure you’ll find this infographic of interest. It details how the cost of living has changed in the UK over the last decade.

The good news is that a Big Mac is only 2p more than a decade ago.

 

rising costs

Source: Vouchercloud

Those take-home points again:

 

  • Taking your date to the cinema in 2004 was £1.38 cheaper than it is today.
  • A Big Mac today costs only 2p more than it did in 2003.
  • Assuming you drink the average 144 pints of milk per year, you spend £7.20 less now than you did in 2003.
  • The recommended limit of three units of alcohol per day equates to £1524 a year, in current pub prices.
  • Going to University today costs over 6 times more than it did in 2003.
  • The journey between Leicester Square and Covent Garden takes only 20 seconds but costs £4.30 today.
  • Those who bought their house in 2007 could have saved nearly £50k in they had waited 2 years to buy.
  • Those earning minimum wage were £665 better off in 2009 than they were two years later in 2011.
  • 2011 saw the second lowest average salary over the last decade.
  • A 35 mile commute to work today, over the course of a year, is £411 more than you paid in 2003.
  • Keeping your lights on and your devices powered costs over £200 more today, than in 2003.
  • The price you pay today would pay the gas bill for two houses back in 2003.

 

Inflation-adjusted figures are super-insightful aren’t they?

 

What do you think? Are there any other costs that have escalated for you?

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Warning, this post contains a reference to Justin Bieber…read on if you dare…

Crypto-currencies have long since moved on from being the official payment method of internet dwellers. Despite their rather geeky creation methods; a series of mathematical algorithms must first be solved to unlock the currency, crypto-currencies are now worth billions of dollars, and are used even within the mainstream markets.

Famous entrepreneur Richard Branson recently confirmed Bitcoins will now get you a ride into space. Virgin Galactic tours will be accepting the coins as payment for a ride to infinity and beyond. Or at least to the edge of our O-zone layer.

bieber bitcoin Bitcoins are so new that Bieber’s ‘Baby’ song came first!

 
Given that Justin Bieber’s hit song, Baby, was recorded before crypto-currencies such as Bitcoin were even a ‘thing’, their rise to popularity in such a skeptical industry, has been remarkable.


Although Bitcoin is the first type of virtual currency people think of when hearing the words crypto-currency, there are some others also gaining ahead of steam. Reddit users will probably be familiar with Dogecoin. Dogecoin is a new type of currency that’s already been making waves in it’s short time in existence. Back in 2013, before the start of the Sochi winter Olympics, the Jamaican bobsleigh team were struggling to fund their trip to Russia after an unexpected qualification to the event.


Needing $40,000, and feeling slightly hopeless, a Dogecoin  campaign run by internet users managed to raise the whole fair and send the team to the tournament. While the currency still needed to be converted into fiat currency to purchase plane tickets and equipment, the fact that such a ‘minor’ currency had made such a big impact at such a big event was a turning point for crypto-currencies.

In many big cities such as London and New York, many restaurants now accept Bitcoin and other crypto-currencies as a form of payment. A trip along London’s South Bank, and New York’s Times Square will reveal a handful of food chains as well as mini food stalls that accept the peer-to-peer form of currency as a payment. Perhaps no food outlet is bigger than Subway. In 2013, the sandwich giants released a list of sandwich outlets which now accepted Bitcoin as payment for food. The move is a far cry from the days when the underground currency was only good for buying hosting or use as a gaming currency.

Bitcoin looks set to grow even more in 2014 and into 2015. London have announced Bitcoin cash machines are to open around the city, allowing owners of them to withdraw fiat currency or exchange into local currency. The idea looks set to be copied by other cities world wide, firmly cementing Bitcoins place among the larger global paper currencies.

 

What do you think? Are you investing in Bitcoin?

 

Also on Magical Penny, the story of how I more than doubled my magical pennies through Bitcoin:

http://magicalpenny.com/what-on-earth-is-bitcoin/

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Should You Get A New or Used Car?

by Adam on July 4, 2014

Living without a car can be a great way to save money. Cars can be costly to run and can lead to expensive surprise bills when something goes wrong.

But for many people  having a car is a necessity: from commuting long distances for that dream job;  meeting family commitments, or simply getting sick of waiting in the rain for public transport!

Owning a car should be a conscious choice of prioritisation: you decide to spend money on a car to allow you to live the life you want to live. But once you’ve made that decision to buy a car it’s worth considering your options:

Old Vs New

Buying a new car does have its advantages. You can choose the specification like colour, features like air-con and i-pod audio inputs; they come with no-worry warranty packages so you if anything does go wrong you will not be out-of-pocket getting it fixed; and there are often  ‘sweetener’ deals on offer at the time of purchase to tempt you if the dealer is desperate to hit their sales quota for the month.

Some dealers really do almost give cars away some months because the bonuses they can achieve from hitting sales quotas can mean the difference between profit and loss for the dealership.

Another benefit not to forget is that there is no unknown history to worry about so if you treat your car right it can last you a long time.

My girlfriend’s car was bought brand new by her Dad more than 15 years ago. After all these years of careful ownership, the car is still going strong and drives like a dream. Over the long term it’s been a very economical purchase

 

So how much is a brand new car going to cost? This number of course is going to vary widely depending on make and model but as a guide, a best selling Ford Fiesta  with 1 litre engine costs between £12,000-£15,000, depending on your negotiation skills.

If you don’t have money in the bank you can take out a car loan and work out the total cost from there. To save you the trouble, as an example, if you got the car for £13,000, and  a car loan at 8%, paid for 5 years, would cost you £15,815.59, with a monthly payment of £263.59.

Some dealerships offer 0% loans reducing the cost further

For more calculations on the cost of car loans, have a play around with the  IMB car loan calculator

 

Other benefits for new cars are more advanced technology such as better fuel efficiency (where huge advances have been made comparatively recently) and safety features like stability control. Take note: If the emissions are low enough, you don’t have to pay road tax!

Buying Used

Despite the advantages of a new car, it can’t be argued that new cars are cheaper. Buying Used is a very sensible choice for many, notably because of the money saved by avoiding the depreciation of a new car. It is rare for a new car to still be worth more than half it’s purchase price after three years, and many will have lost up to two-thirds of their value.

Look out for used cars that still have a factory warranty for extra piece of mind.

Private purchases will give you better prices than going to dealer, but it takes more work and you have fewer options is something goes wrong down the line. Similarly,  buying at auction will generally be the cheapest but bargains are hard to come by and you may be at a disadvantage if you don’t know enough about cars to know their worth.

Car history is the biggest risk when buying used. Ideally, a car will have a complete service history: if not, you can buy some reassurance in the form of a history check.

Just a couple of days ago I bought my first ever car. Thankfully I didn’t have any of the history worries as the car was formerly owned by my parents and had meticulous records of everything that had been done to it. I’m not a car expert myself so this was reassuring for me.

 

my new car

A Third Way

Besides new or used, there’s a third way into car ownership – buying a nearly new car, either from a dealer’s demonstration fleet, or from ‘pre-registered’ stock (cars that have been notionally bought by the dealer in order to meet sales targets).  You could also try looking for cars that are only 1 or 2 years old. Buying nearly-new can be the best of both worlds. You end up with a modern, fuel-efficient and safe car, but buy it after it has already depreciated significantly from new. The extra name on the registration document  will lower the car’s resale value and you don’t get as much as choice as when buying new, but for many it’s worth the trade.

In Summary

The key thing to remember when buying any car is make sure it’s a conscious choice: work how much you are willing to spend, and if you require a car loan, make sure you understand the costs.

Newer cars may seem more expensive, and they are, initially, but if you consider other factors like fuel economy and warranties , the difference might not be as huge as you may think. The re-sale value of newer cars is also higher.

 

Happy Driving!

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How Much Is Your Dad Worth?

by Adam on June 15, 2014

It’s Fathers Day, a day honouring the role our Dads have played in shaping our lives.

Breadwinners, providers, protectors – these are just some of the words that may spring to mind when we conjure up the image of dads – past and present.  But can you put a number on how much are they worth?

Someone has tried…

 

 

Men earn more on average, but women are catching up!

While full-time earnings for men continue to surpass those for women by an average of 15%, women’s salaries are slowly edging up to close the gender pay gap and women aged between 20 and 29 are actually earning more (+0.3%) than their male counterparts.

 

Parent’s personal finances – protecting the present in order to secure the future

When it comes to modern families who are striking the right balance between the respective incomes of mum and dad, it seems that a modified breadwinner – where the mother works part-time and the father works-full time – could help lay the foundations for a financially secure future.

More than a third (38%) of Brits outlined this as the ideal way for a family with child under school age to organise their family and work life. And with the cost of raising a traditional 2.4 family totting up to £32,934 a year – including mortgage payments, the cost of bringing up baby, food shopping and more – mum’s income plus dad’s income has emerged as a good solution to a family finance equation.

Happy Father’s Day, Dad.

Source: Smart Insurance

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