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. 

Sunday, 3 October 2010

Psychology of the investor

Girls, did you know you have what it takes to be a successful investor? 

That's because there are the three key psychological traits that, when it comes to making the savviest investment decisions, trip men up every time. If you'll excuse some over-generalising and stereotyping, these are

Attitude to risk
Men are less risk averse than women and will back portfolios that are more uncertain. They’re more likely to put all their eggs in one basket instead of opting for a safer, more diverse portfolio. Men’s higher earnings and greater net worth also makes it easier for them to take greater risks than women. A US study by Wang in 1994 also showed that women are more likely to be offered safer options than men, by advisors who expect them to be risk-averse.

Overconfidence is consistently found in more men than women, research shows. And this is especially true in male-dominated arenas such as finance. They overestimate the returns their investments will bring and the certainty of the return. They also have a misjudged overconfidence in the accuracy of their own knowledge and over-rate their own ability. In a Gallup study, both men and women expected their portfolios to outperform the market but men expected theirs to outperform it by a greater margin.

The herd instinct
Constantly monitoring the market can fuel men’s over-activity and cause them to act irrationally. Men are more likely to get drawn into financial follow-my-leader games and information cascades. They also fall foul of being too well informed, instead of tuning out the endless stream of news and financial information and sticking to an annual portfolio review.

This is where women truly have the edge, We have a healthier attitude to risk, are not ridiculously over-confident and don’t play herd games.

Sadly though, lamentably few women are seriously into investing. Male investors outnumber females by eight to one. A mere 3% of hedge funds are headed by a woman. 

Simonne, who has a predominantly female clientele, says women could do with borrowing some of that male over-confidence. “Many women have exactly what it takes to reach dizzy financial heights,” she says, “the only thing holding them back is knowing that they have it and acting on it.” 

Perhaps it really is time for the Sheconomists to step forward?