Thursday, 23 December 2010






1. How much does the average adult plan to spend on Christmas gifts this year?

a)   £170
b)   £295
c)   £391

2. Who spends more at Christmas? 
a) Men
b) Women
c) They spend about the same?

3. Why did Phil Kunz, from Utah USA, receive 117 Christmas cards from people he didn’t know in 1975?
a) He had amnesia and no longer remembered any of his friends’ names
b) He had been on local radio bemoaning the fact that he was lonely and wasn’t expecting any cards
c) He had sent 578 cards to strangers in an experiment on reciprocity and 117 people had sent him one back 

4. When people were asked people how much they would be prepared to pay for gifts they’d been given at Christmas, how much did they say:
a) The same amount that the gifts had cost
b) 20% more than the gifts had cost
c) 20% less than the gifts had cost

 5. A Christmas card and envelope together cost £1.10. The card costs £1 more than the envelope. How much does the envelop cost?
a) 10p
b) 5p
c) 1p

6. Last Christmas what percentage of people surveyed said they disliked all the gifts they had received?
a) 5%
b) 15%
c) 30%

7. What percentage of women will pretend to like a gift they get?
a) 69%
b) 79%
c) 89%

8. What percentage of men will pretend to like a gift they get?
 a) 69%
b) 79%
c) 89%

9. What percentage of people thinks it’s OK to re-gift bad presents
a) 35%
b) 50%
c) 65%

10. What type of gift are we most likely to get wrong?
a) Gadgets

b) Clothing

c) Jewellery

11. On average how much do parents spend on their child’s Christmas presents?

a) £90
b) £170
c) £255

12. What percentage of women say Christmas is most stressful time of year?

a) 48%
b) 58%
c) 68%

Wednesday, 15 December 2010

The future's bright. The future's orange or banana... but not chocolate.

You know you’re into the festive season when you find yourself sitting down to a meal you ordered back in September. 
Often at one of those works ‘dos’ where the restaurant needed the order for your table of 68 people ahead of time.
And you find yourself wistfully wondering ‘Why?’.
Why did I think I would want steamed fish and a side salad, you wonder, as you eye up the juicy roasts, mountains of potatoes and pillow-size yorkshire puds arriving at other tables.
mmm...wish I'd ordered what they've got...
Here's the reason. We all have really good intentions for our future behaviour. But we’re less sensible when it comes to present, on-the-spot desires. That’s the Jekyll and Hyde nature of our Future Self and our Present Self (and the dilemma in the story of Ulysses and the Sirens if you want to get all mythological).

Would you choose a healthy snack or junk food for yourself next week?
In a psychology experiment carried out by Leeds University Business School in 1998 experimenters asked people what snack they would like to have in a week’s time - a banana or a chocolate bar. Most people made a banana their advance choice.

The following week the experimenters returned and offered the same people a snack to have straight away. No mention was made of their previous choice. Most people, especially women, opted for the chocolate.

People are saying ‘at the moment of consumption I can’t resist vices
But some time in the future I’ll have what’s good for me’.

We have difficulty delaying gratification because pleasure-seeking is such a strong motivator of human behaviour. We’re much better at exercising self-control when thinking about the future. But not so good at the moment of choice. 

That’s why we join gyms we don’t go to, and think we will eat healthier food in the future. It’s why half of all people surveyed last year said they would go to church, whereas in fact 90% stayed on the sofa. And why we don't care for the planet as much as we should.
So next time you want to make a sensible economic decision, try to make it ahead of time. 
Because prescriptive savings programmes, like Save More Tomorrow (devised by behaviour economist Richard Thaler and adopted by firms like AXA) are a brilliant idea. 

They capitalise on this natural human tendency by getting people to decide in advance to allocate a portion of their future salary increases towards their retirement savings. 
Consider which you would do:
a) Commit now to putting 10% of a future pay rise towards additional pension or mortgage payments?
b) When you get your next pay rise will you then make those additional contributions?

Healthy diet and healthy finance decisions have a lot in common! Pass me the chocolate.

Sunday, 5 December 2010

Bartering for Business

This month we're thrilled to bring you this guest blog from Sam Pearce (left) founder of Mum’s The Boss, an award-winning support network for mums in business.

If you are in business your aim should be to sell your product or service and to make money. But there are times in the lifecycle of a business when bartering can be of enormous help.  

The concept of money as a unit of purchasing power is something which has evolved over the years and is now accepted as the norm. However bartering still goes on in communities where cash is not available, such as prisons (where cigarettes form the basic unit of currency) or the school playground (where children regularly swap or trade the contents of their lunch box). Early civilizations relied on the exchange of goods and services to survive.
As a small business owner, cash flow can make or break a business. Bartering comes into its own whenever cash flow is tight, particularly when trying to get a new business off the ground and later when a business is going through a process of rapid growth.
The importance of a support network
Top of your to-do list, as a business owner, should be to build a support network. This can include family, friends, social networking sites, business forums, a business coach or mentor, mums in the school playground, face to face networking – it all counts. People often view ‘networking’ as a means of attracting clients and generating sales. But your support network can be just as crucial when it comes to sourcing suppliers, partners and other business owners to collaborate with.
Here are just a few examples of ways you can utilise your support network when cash is tight:
  • How a new business can benefit: 
1.     Setting up a professional infrastructure. When you are a new business you want to hit the ground running – this might mean having a website, business cards, promotional materials, a logo, etc. The problem is, you probably don’t have the cash available to pay for all of this upfront, and you don’t quite have the skills to do it yourself. So now is a good time to barter some of your product or time to get a really professional image right from the start.  
2.     Building up a portfolio. When you are a new service provider you have the chicken and egg problem of needing clients but having no evidence to support what you do, save perhaps some qualifications. This may be the time to barter some of your product or time in return for testimonials, a design portfolio or ‘Clients’ listing. 
3.     Getting yourself seen. Advertising is a costly business, which is why business owners invest so much of their precious time networking. However, sometimes you just need to get your business in front of people. Can you barter some time or product to get some promotional material produced or for free advertising or advertorial content?
  • How a growing business can benefit:
1.     Upgrading your infrastructure. If your business is growing quickly you may find yourself outgrowing your website, your premises or your brand. In order to capitalise on your success and your momentum it is often necessary to make large upward strides before you can afford to pay for them. Now may be the time to barter for a new website with added functionality or some help fine-tuning and developing your brand.
2.     Getting the support you need. Or it may be a case that you lack the confidence or knowledge to take your business to its full potential. This may be the time to barter for some coaching. Sometimes a small amount of fresh input at the right time can make all the difference. 
3.     Outsourcing, freeing you up to do what you do best. You’re in a time/money trap where you can’t yet afford to outsource, but you need more time to grow your business. If you can barter with a couple of suppliers to outsource your admin, book-keeping, PR, etc, it can free you up to get on with the important business of making more money so you can then start to pay these suppliers. 
  • How to barter successfully
Our business would never have got off the starting blocks without bartering. We have bartered yearly memberships in return for a new website from a fledgling web designer and free advertising in magazines; offered free advertising on our website in return for sponsorship, discounted venue rates and a virtual tenancy with a business incubation unit; and received free business books in return for reviews;  the list goes on.   Successful bartering depends largely on the quality of the relationships you build. To barter effectively for your business you should:
·       Build genuine, strong relationships with people before you need their help
·       Be generous – if you’ve helped someone out they are much more likely to help you in return at a later date
·       Be honest about what you need and what you are prepared to offer in return
·       Highlight the benefits to both parties
·       Always keep your side of the bargain
·       Don’t be afraid to ask – but give people the option to say no and still remain friends!

Whether your business provides a product or a service, remember you always have your own personal unit of currency available at your disposal. As long as both parties are happy with the deal, the ‘monetary’ value of the exchange is irrelevant.  And don’t underestimate what you have to offer – just because it’s not ‘hard cash’ doesn’t mean it’s not exactly what someone else is looking for.

Mum’s The Boss provides online business resources on its  blog and runs face-to-face child-friendly networking groups across 6 counties. 

Thanks for some great advice Sam. 
Check out her fabulous website 

Wednesday, 1 December 2010

Savvy-nomics rules this yule!

Will the festive season knock the stuffing out of your budget this year? 
Is it going to be a blow-out Christmas, or will you be sipping Lambrini instead of Laurent-Perrier on the 25th?

According to new research UK shoppers are going to rein in their spending this Christmas, spending on average £26 less per head than last year.
It seems austerity messages have hit home and people are thinking about how to make their money go further. Does that sound familiar to you?

The CFEB’s survey says we’re more savvy this year than we were five years ago:
  • ·      Nearly twice as many of us (37%) now set a Christmas budget and intend to stick to it (up from 19% in 2005)
  • ·      6 out of ten people will post cards earlier to cash in on cheaper 2nd class postage rates (up from 40% in 2005)
  • ·      Twice as many of us (16%) are happy to source second-hand items as gifts (up from 8% in 2005)
  • ·      More than half of us (54%) say we’ll cut back on the food budget by buying supermarket’s own brands (up from 25% in 2005)

This is great news and should mean that Santa's the only one who'll be starting 2011 in the red. 
Although a worrying 34% of people say they will fund Christmas from their December pay packet. 
Then they've still got another long month to get through before the next pay day. 
And…er…no they haven’t done anything so far this year to help spread the cost.

So, while I'm not saying ho ho ho to those who intend to have a no frills, fully paid up Christmas I'm reminded of psychological research showing that intentions don't always translate into reality. 
Will those good intentions melt away when the jingle bells and seasonal smells of the festive stores seduce us into slipping extra boxes of baubles and novelty socks into the basket?  

Will we be overcome with guilt at the paucity of the present pile and nip out for another singing fish at the last minute? 
Might we even risk buying things people don't need with money we don't have?
It’s the unplanned, impulsive purchases that can trip us up and, as sheconomics research shows, women are especially likely to get overwhelmed by the urge to splurge.
Check out the cheery CFEB Christmas website

Luckily the Consumer Finance Education Body has some great tips on its Christmas website launched today. There is a Christmas cut-back calculator to work out where you can release cash from other expenses to cover the seasonal spend. Plus they’ve got lots more Christmas tips and really accessible, useful (and free) financial advice.

Check out their tips now and be a savvy spender this Christmas.


Thursday, 18 November 2010

Women make the bottom line more attractive!

I spent a very uplifting day in the company of some of the top financial brains on Tuesday, at the Financial Services Research Forum in Westminster
The title of my talk was:
The Rise of The Sheconomist: Why Women are a Wise Investment,
in which I  discussed the financial capabailities of women.

It boiled down to this.
Women are as good with money as men. In some cases they’re even better. They get higher returns on investment, for example. And companies with women leaders have a 35% higher return on equity.

But men tend to over-rate their own capabilities. And women under-rate theirs! 
Little wonder then, with all the other societal factors that come into play, women have been marginalised when it comes to money.

However, we're soon to see a shift in financial responsibility from the state to the individual and women will need to be more financially self-reliant and assume greater financial responsibility. It’s vital to ensure they rise to the challenge and not become second-class financial citizens. That’s what Sheconomics is all about.
Pine, 2010, The Rise of The Sheconomist

When women’s skills are harnessed at an organisational level for example, it improves a company’s bottom line and gives them a competitive advantage. There’s lots of evidence for this, but one study by Pepperdine University found:

When a company had at least 3 women on the board of directors it outperformed the competition on all measures by at least 40%.

Norway saw the sense in this years ago, other countries are catching on more slowly.
Legislation in Norway in 2003 made it mandatory for every state-owned company to fill 40% of board seats with women by 2006, and for public companies to do so by 2008.

I wonder if there’s a link between Norway’s decision and the fact that the coutnry enjoyed 3% economic growth in 2009 and an 11% budget surplus, while much of Europe was  in economic decline?

Could a recipe for the success of corporates be:
Add three females and watch profits rise?

If you want to read my full report on this download it from the Recent Talks section on our website.

The 30% Club

With perfect timing, the 30% Club was announed on the same day. This is a fantastic new inititative encouraging UK companies to aim for at least 30% female representation on their boards by 2015. 
The initiative was founded by Helena Morrissey, CEO at Newton Investment Management and comprises a group of senior businesswomen. Go girls!
Read more about their progressive and impressive move here

Sunday, 14 November 2010

Guest post from Sarah Pennells

We're thrilled to have this guest post from top financial journalist Sarah Pennells. Sarah has a fabulous finance website and gives us her expert views on managing money here:

I’ll let you into a secret: I wasn’t born with a ‘money gene’ and I didn’t find money inherently fascinating at a young age. In fact, I wasn’t really interested in finance until I started working for a programme called Moneybox on Radio 4. Previously, I used to avoid programmes about money and bin the personal finance sections of the papers (sacrilege, I know!). 

But something clicked when I saw for myself how financial companies behaved and discovered the far reaching consequences of a particular course of action.
It amazed me then – and still does – that financial companies would happily give their customers the brush off but would often move heaven and earth to offer speedy compensation once a journalist was on the trail. Unearthing big financial scams and stories was undoubtedly rewarding, but so was giving people information that would help them to make better decisions about their own financial situation.

Over the last few years there’s no doubt that life – certainly in terms of the financial choices we face - has become much more complicated.  I almost ran out of fingers recently when I was trying to keep track of the various government announcements about pensions!  And – like many areas of finance – the changes to state and workplace pensions will affect women and men differently. 

So, this leads rather neatly onto why I started my finance website for women called Apart from sites such as Sheconomics there really hasn’t been that much information about money that’s aimed at women.  Sure, you’d get a smattering of articles about subjects such as women’s shopping habits or childcare costs (especially if there was a change in the rules), but there was – and is - very little that acknowledges that women and men can have different ideas about money.

We often have to make different financial choices – either because we earn less than men, because we have career breaks to bring up children or because we take on a caring role. But even if we start from the same point we may not follow the same path. One example is that women may have a different way of assessing risk in relation to investments and can be more cautious about what we do with our money.  Research shows we tend to be more put off by financial jargon than men are. 
It’s not that men particularly like jargon but it seems that they accept it as something that goes with the territory. 

However, although we may not know our allocation rate from our exit fee, we’re perfectly capable of getting to grip with our finances and making good money decisions. 

But some of us (men as well as women) have convinced ourselves that we don’t need to worry about money or that that it’s simply too dull to think about.
From where I’m standing, it’s too important to ignore. While I don’t actually believe that having pots of money is a sure fire route to happiness, knowing how to make sound financial decisions can certainly help.

Thanks, Sarah. 
Don't forget to visit her site for lots of tips and information.

Friday, 12 November 2010

Presents – are experiences valued more than material goods?

As you browse through all the experience days offered online your eyes alight on a paint-balling morning. 
You ask yourself, “Would Tim prefer a morning squirting paint at a group of businessmen in Berkshire, or a pair of designer cuff-links?” then, further on, “What about Sarah- a spa day or a cashmere scarf?” 
and before long you find yourself thinking, 
"Surely it's time Gran tried sky-diving?"

In a paper entitled ‘To Do or To Have: That Is the Question’ US psychologists Van Boven and Gilovich* show that we value experiences over goods when we’re spending our own hard-earned cash. So does the same apply to presents that we’re given by others?

The researchers stress that experiences contribute to social relationships. And choosing the right gift for someone is critical for a relationship. As my own research shows, the more our gift shows empathy for the other person, the more successful it will be. 

So don’t just pick any experience for your loved one this Christmas, pick one that shows you have real empathy for them as an individual, that you understand their needs, passions and desires. 

And if that means a spa day for Tim and paintballing for Sarah, go for it!
(although I've a sneaky feeling Gran might prefer a sky box to sky diving)


Here’s the abstract from the Van Boven and Gilovich paper:
Do experiences make people happier than material possessions? In two surveys, respondents from various demographic groups indicated that experiential purchases—those made with the primary intention of acquiring a life experience—made them happier than material purchases. In a follow-up laboratory experiment, participants experienced more positive feelings after pondering an experiential purchase than after pondering a material purchase. In another experiment, participants were more likely
to anticipate that experiences would make them happier than material possessions after adopting a temporally distant, versus a temporally proximate, perspective. The discussion focuses on evidence that experiences make people happier because they are more open to positive reinterpretations, are a more meaningful part of one’s identity, and contribute more to successful social relationships.

Wednesday, 10 November 2010

Photocopied picture of eyes makes people more honest


Every morning, Paul F delivered some bagels and a cash box to a company's staff room. 
Then he went back later to pick up the money and the leftovers. 
It was an honour-system, people took a bagel and left a dollar, and it worked. Within a few years, he was delivering 700 dozen bagels a week to 140 companies and earning as much as he had ever made as a research analyst. He had left  corporate life behind. And he was happy.

As well as coming up with a great business model Paul F had also - inadvertently – created an elegant economic experiment. 

Comparing the takings with the number of bagels taken told him, down to the penny, just how honest people had been. And he noted that the most honest offices were those where people liked their boss and their work! He also got a higher payment rate (over 90%) from smaller offices than larger ones.

Now recent research tells us if he'd stuck a photocopied picture of a pair of eyes onto his cash box, people would have coughed up more.

Psychologists at the Univerity of Newcastle noticed that donations into an honesty box for coffee always fell short of the amount of coffee consumed. So one week they stuck a picture of a pair of eyes on the box. The following week they changed the image to pictures of flowers, then eyes and so on. 

People paid nearly three times as much for their drinks when eyes were displayed rather than a flower picture. The figure below shows how the donations fluctuated according to the image displayed. Read their paper here.

 People weren’t actually being watched, of course, but even a pair of photo-copied eyes was enough to prick their conscience. You might like to  see if this works with your children by sticking a pair of eyes onto their money boxes, if they're tempted to raid them a bit too often. Or, if you have a chocolate hob-nob habit, test it on yourself with a pair on the biscuit tin!

Monday, 8 November 2010

Hard Wired For Luxury

What does this new ‘age of austerity’ spell for luxury purchases like champagne?

Will people stop buying it and switch to a cheaper tipple? The government and economists would have us think so, but they’re forgetting one thing.

The human brain is hard-wired for luxury.

Yes, pleasure seeking is a key motivator when it comes to human behaviour. And hedonism doesn’t give a toss about the state of the economy.

This was the topic of a talk I gave today at a wonderful Champagne Assembly organised by G.H. Mumm and Perrier Jouet. The reason we’ll always love a bit of luxury lies deep in the emotional part of our brain. Neuoscience has revealed the subconscious roots of consumer behaviour. It shows us that luxury brands excite the emotional, feeling part of the brain that ordinary brands simply leave cold.

Recently in Germany a couple of neuroscientists (Schaefer & Rotte, 2007) scanned people’s brains as they studied logos of brands of cars. When looking at everyday brands, there was activity in the thinking part of the brain – (the dorsolateral pre-frontal cortex) – but when they saw luxury brands there was frantic activity in the feeling part of the brain (the ventral striatum).

The researchers say this brain area is where our ‘hot buttons’ are located. It’s where we feel pleasure, desire, passion and happiness. There may be an evoluntionary imperative for this, since people who feel happy are more likely to find a mate. And happier people even live longer, according to Dutch psychologist Veenhoven.

So our thinking brain may be telling us to cut back. But, because we’re hard wired for luxury, those top brands will continue to press our hot buttons every time.

Friday, 5 November 2010

A warning from Simonne about Payment Protection Insurance

Taken out a credit card, loan or mortgage recently?
Then there's a chance you've been sold payment protection insurance (PPI).

The insurance is designed to cover payments for a year or two if you're unable to work due to accident, sickness or unemployment. But it was widely mis-sold over the past 6 years. 
In fact there have been over a million mis-sellling complaints to date.
If you've bought a policy directly from your lender, at best you've paid an over-the-top-price for the insurance. At worst, it's possible they won't even pay out on a claim (for example, if you're self-employed).
Think you may be been mis-sold? Then act now. Because new rules about the way banks deal with PPI are being challenged by the courts. Like the ability to reclaim unfair bank charges, the courts may decide to put claims on hold.
 But for now it's still possible to claim compensation - so make sure you get your complaint in quickly.
The Consumer Association, Which?, tell you all you need to know on how to claim your PPI money back. Just click here  for more information. 
Simonne Gnessen

Saturday, 23 October 2010

Note to self: Make a list

Are you a list-lover? 
My life seems to be organised around a scattering of post-it notes reminding me of what I have to do, get or even think about. 
I love the sense of control that writing a list gives me. And the euphoria of sheer smugness I feel every time I tick something off.

So I was intrigued to read that writing a shopping list can save me £520 per year. Of course that assumes I take the list to the supermarket with me (or slavishly follow it when placing my online grocery order) and make a concerted effort not to go ‘off-list’ when tempting offers pop up on my radar.

The £520 a year saving statistic comes from the Tesco Greener Living campaign website. It shows you how much money you can save by going greener, including:
  • An estimated £365 a year if your home is well insulated
  • £30 a year if you remember NOT to leave appliances on stand-by
  • £55 a year if you turn your heating thermostst down by just 1degree C
  • £200 from recycling your old mobile phone with Tesco 

Have a go at Tesco’s online quiz and test your own green money-saving credentials. 

Or at least put it on your list as something you should get round to.

P.S. Making a list is just one way to help you keep to a budget. If you need more tips download our Tip Sheet "How to Curb the Urge to Splurge" here.

Wednesday, 13 October 2010

Do you have a high tolerance for low pay?

Simonne tackles the low-earners:

Are you someone who doesn't live up to your earning potential? Try 
our quiz to find out. 

As women, we often undervalue our worth and dread asking for pay rises or increasing our rates. We happily give away our time and skills at bargain prices because we don't trust that we're worth more. 

If you can identify with this, here's a trick to help you convince yourself that you’re worth whatever you want to earn:

Take yourself off into a room alone for five minutes. Then, say out loud the amount you want to earn. It’s important to actually speak, rather than just think. Shout out your ideal annual salary, your anticipated profits or your daily or hourly rate. 

Maybe you’re aiming for a salary of £60,000. Start by saying ‘I earn £60,000 a year’. Then double it and say, ‘I earn £120,000 a year’. Then keep doubling it again and again, until you reach a ridiculous salary that even David Beckham wouldn't sniff at.

When you reach that silly figure, practice saying aloud that you earn this whopping amount. Keep it up until you can say it in a neutral way, just as you’d reel off your own phone number. This tricks your subconscious mind into believing what you’re saying. 

Then, when you talk to your manager about a pay rise or quote a higher daily or hourly rate, it’ll seem like peanuts. You’ll come across with real conviction. 

Try it - it works! 

We've also got a great tip sheet -  'How to ask for money'  - for you to download.

By Simonne Gnessen Wise Monkey Financial Coaching 

Tuesday, 5 October 2010

Pay more into your pension to save your child benefit

Here's a fantastic tip from Simonne if you think you're going to be hit by Cameron's cutting child benefits:

The government's just announced that parents who are higher rate tax payers (currently those earning more than £43,875 a year) will have their child benefit axed from 2013. The benefit will be stopped even if only one parent falls into that tax bracket. This will affect families with only one parent working the most. Hmm... I can see this affecting lots of women.

But ... wait for it, there's some good news.

These higher rate tax bands are based on the amount of income you pay tax on and there are ways to reduce your taxable income.  One brilliant way is to make a contribution into a private, or company, pension scheme. So, let's say you earn £46,000, and you pay £300 a month (or £3,600 a year) into a pension plan before tax, your taxable income would be treated as £42,400 (£46,000 less £3,600) which is below the higher rate tax limit. So, hey presto you still qualify for child benefit. The other great thing is that you'll be putting away money as a gift for your future self (the way Sheconomists think of saving for retirement!). Even better, the pension company would only actually collect £240 a month (£2,880 a year) because you automatically receive 20% tax relief on any pension contributions you make.