New York, pre-paid card and budget reviewing

Well it’s been a while since my last blog entry. It’s time for a catch up and revisit my goals and plans.

We came back from New York feeling incredible! What a fantastic trip. That city is simply amazing! Apart from the sights, food and entertainment one of the best things for me was the pre paid card I used to spend over there.

I saved hard for about 6 months for this trip. I budgeted, planned my monthly needs and allowances and set. Twelfth a savings goal. I’m so glad I did. It feels so good to come back from such an exciting trip where we spent freely and enjoyed alot and not have to worry about some shadow of a credit card bill coming through the door now we are back and having to pay for it all! It’s all paid for! Great!

The pre paid card was brilliant. So easy. I could draw from any ATM up to $750 a day, but it was just simple to use in all shops and restaurants because it was a Visa. I could check my balance via text, phone or online. I managed so well.

Since returning I have also started getting on with baby step 1. A base emergency fund. My target for this step was £1000 and I’m already £600 up.

I need to refresh my monthly budget. Petrol prices have sored and so has the cost if living. Budget needs to be reviewed and cost cutting too. However, as planned I am living within my means and planning my financial freedom.

Tags: budgeting, budgets, credit cards, New York

The cost of fuel

So, with some reports suggesting that Price for diesel at pumps now averages 143.05p a litre, fuel costs for many will be a big issue when balancing budgets. The trouble is, many of us rely on using our vehicles for work, childcare and domestic reasons, it can feel like there is nothing we can do about the exploding cost of fuel.

The truth of the matter we as individuals cant do anything about the cost of fuel. This very interesting article articulates what influences the price of fuel. There is also this one that focus’son the US.

However, we shouldn’t feel completely helpless when trying to reduce the amount we spend on fuel each month. I spoke a little about how I use petrolprices.com to find the cheapest fuel locally here. As well as finding the cheapest fuel, there are other things we can do to reduce the cost.  Here’s what moneysaving.com has to say on the matter:

1. Make your car more efficient.

2. Drive more efficiently

3. Find the cheapest fuel – There is a great target fuel cost tool in the article as well as using petrolprices.com

4. Use cash back credit cards

5. Car sharing

Check out the full article here.

Tags: cost of fuel, diesel, petrol, petrol prices, saving

Holidays, trips and good financial sense

So, my current immediate financial goal (and one I need to complete before kick starting my major ones) is saving for a trip to New York next month. Its a 30th birthday present for my wife. We are also going with another couple.

I started saving for this before I began this blog in January. It was also really before my personal finance epiphany and aims. I thought would jot down some things I’ve learnt.

In future, all my trips are going to be planned. This will be a significant part of keeping in line with my financial objectives, but it really does make sense. Planning means estimating costs for the majority of things the trip will entail. In most cases, flights, accommodation, food and enjoyment.

Flights

When booking the flights for NY I used both skyscanner and Kayak.  The important thing to remember is not all cheap flight comparisons are the same as they do different things. There are more than the two I used and these should be investigated when flight planning. Skyscanner and Kayak are useful when investigating the cheapest times to fly. Skyscanner allows you to profile flights for a whole year. Another really useful tool is money saving experts flightchecker.

In my case. I managed to get two return tickets from Heathrow to JFK for £700.

Accommodation 

There are some bargains out there when it comes to accommodation. My own experience suggests it will be down to the type of trip being planned and your own personal preferences. It should definitely be a result of budget too! Again Martin Lewis has a great article on finding cheap hotels and this allows you to guide yourself to a great deal that caters to the the needs I just mentioned.

Its important to note though, even with all these web-based tools for finding cheap deals, sometimes going direct to the hotel can yield the best results. This might be their willingness to give you a cheap bargain or provide some added perks for your stay with them. I have read a number of forum posts where the hotels have provided little treats like champagne and ‘nibbles’ when they have been informed beforehand that a visit to them is to celebrate a significant anniversary.

Eating out

I’m still investigating this for the trip – so any pointers to eating well in NY on a fair budget will be gratefully received, but there appears to be a wealth of information out there on good budget eats. We have already decided that we are going to treat ourselves to a ‘posh nosh’ night at one of NY elite restaurants – and this if fine providing it can be budgeted and planned for ahead of time and not be chucked on credit!

Spending

I must admit I never thought properly about this before. In the past I’ve just got cash exchanged wherever before hand, used travelers cheques (not the most convenient!) and even used my debt and credit cards direct abroad. This can and usually is expensive! I’ve since discovered much better ways to spend when I’m abroad.

Credit cards, despite all their sins are in fact the cheapest way to spend abroad – the rule is you must have the right one! Most credit cards add a 3% cost to exchanges. This is known as a ‘load’. Find the right one and you wont pay the load. Here is a list of the markets best.

If you want cash. Always exchange before the trip and use a comparison site to find the best deal.

Stay away from your debit card! These can have some horrific rates attached to them if you use them to spend abroad. Either get the right credit card (see above) or better still (and my choice for the trip) use a prepaid card!

Before the trip you load the card with an amount of money. Its automatically (and pretty competitively) transferred into your chosen currency. When on your holiday you use it just like a debt or credit card. Here’s the top prepaid cards available. I’m going for the CaxtonFx.

Happy holidaying!

Tags: budgeting, credit cards, currency exchange, holidays, prepaid cards, savings

Inflation.. What is that?

So, in the world of economics there are terms that are thrown about which I think the majority of Joe Public dont really understand. The trouble is, as I am learning, some of these terms are important for us to understand as they are issues that directly affect our everyday finance.

The hot topic of the day is the matter of UK Inflation rate dropping 1.2 percentage points over the last two months. This means at the end of January it was 3.6 per cent. What is inflation though? More importantly, what does it mean for me?

I am probably like a lot of people out there who think they understand something because its used so often in the media etc – but probably dont really understand it. Inflation for me is that. So with a little searching, I came across this very easy to understand video that explains what inflation is and why it matters to me.

The key points to take away:

• Inflation is a reflection of price rises across the economy. The rate of inflation is updated monthly although it does not reflect the average change in prices over the month; instead it is a year-on-year change.
• The Consumer Price Index (CPI) has been the preferred measure of inflation since 2003. The CPI measures changes in the price level of consumer good and services purchased by households but unlike the Retail Price Index (RPI) it doesn’t include most housing costs and therefore expenses such as house prices, mortgage payments and council tax. It does include rental costs.
• Like some employees in the public sector who have had the salaries frozen and have only received a cost of living  increase of 2% – this means everyday outgoings will begin to pinch as an increase that is lower than the rate of inflation is effectively a pay-cut.
• If your a saver - In order to earn a decent return on your investment, it must grow by at least the rate of inflation for it to be beneficial to you. This means working out your return based on whether your a higher or basic rate tax payer. I found this useful calculator that allows your see what your savings are actually worth based on the rate of inflation.

Tags: inflation, savings

5 year planning

So, Laura over on No More Spending, has just updated and outlined her 5 year financial plans. I think this is an incredibly inspring thing to do to help focus on our dreams and ambitions. For the moment, mine looks just like this:

2012

Complete funding for NY trip in March

Build £1,000 emergency fund base before smashing credit card debt

Start putting £70 a month aside for general car cost including insurance, MOT and maintenance.

Completely pay off 1 of 2 credit cards

2013

Continue £70 car fund

Completely pay off 2nd credit card

Begin building emergency fund further

2014

Continue £70 car fund

Fully fund 3 month emergency fund

Begin general savings of £100 a month

Begin long term investing (ISA) £160 a month

Tags: debt, planning, savings

Active planning

So, I thought I would set down some thoughts since my last post.

One thing is for sure, there is a lot of information available to people who are really interested in personal finance. I just wish they would go take a look. It still amazes me how stand offish people can be when it comes to good personal finance. As discussion with work colleague have shown me, many just think debt, being ‘skint’ and living from pay check to pay check with fingers crossed each month is normal! I’m so glad I’ve had my epiphany!

I’ve been keeping up with a number of personal finance site. My favorite still has to be Get Rich Slowly. Its written for an American audience but it’s probably one the blogs that has changed my life when it comes to my own finance. I find I can usually take the principals J.D blogs about and turn them into similar actions here in the UK.

I’m going to start listing the blogs I read. I haven’t quite grasped using the blog roll on here yet . I will start posting about interesting articles more often.

What I’ve found is that there is a common theme as to what is good personal finance. It doesn’t really deviate from the steps I’ve already outlined as forming my own journey this year. The personal blogs really help put these practices in context though. My personal debt is a drop in the ocean compare to some I’ve read and its been inspiring seeing how even those swamped with what I would regard a fortune of a debt mountain have changed it around.

Since my last post, I’ve been very honest with myself and have concluded I can and should be more aggressive with my actions. I have decided I can half my weekly ‘fun’ money allowance which would free up £200 more a month to really smash into my debt mountain. So here is the plan according to my new workings:

Emergency fund minimum in place £1000

Jun-12

Change CC from TESCO  to new interest free card

Aug-12

Barclaycard complete

Dec-12

TESCO Credit Card complete

Jun-13

3 month Emergency fund in place £5000

Feb-14

So, by June this year I would have set my minimum emergency fund up. This will protect me from falling back into more debt should some small scale emergency arise. In August this year the interest free period on my TESCO Credit card expires. I will then transfer to a new interest free card. In December this year my Barclay Card will be paid off! Nice! In June next year so will my TESCO Credit card. In exactly 2 years, I will be debt free (except mortgage) and have my 3 month emergency fund in place.

That’s the plan! To keep me on track there will be my monthly budget review. I plan the weekly food menu on a Sunday and have yet to spend over £30 a week. I budget for petrol and make sure I’m getting the cheapest using petrolprices.com

That’s it. The plan outlined. Here’s to the journey.

Tags: budget, debt, planning

The cost of Valentine’s Day?

Wow, stumbling across this article, I discovered some research conducted in 2010 that suggests that the UK spends an estimated £4.9 billion on romance, and the the biggest spenders will be women. Furthermore, couples can expect to spend £550 this Valentine’s Day.

Surely we can express our love for our better half’s without it breaking the bank? Have we just been brain washed into feeling like we have to spend a lot to show someone we care? Or is it just easy to buy expensive gifts and go on lavish meals because we are lazy and cant be bothered to think of something a little less money and lot more creative?