A British Man's Take on Debt, Saving & Investing

Community Networking

Posted on September 12, 2009 by Lee

I have been doing this thing called “networking” lately. It’s something various blogs have written about in the past. Trent @ The Simple Dollar has even reviewed a book about it quite recently. But, these prior posts seem to stem from primarily an employment betterment point of view, i.e. upping your income or keeping employment contact opportunities open, rather than purely networking within a certain circle for a specific reason.

Five Pence Piece Does Networking!

Instead, I have been making an effort to contact fellow personal finance bloggers. I am under no illusion that Five Pence Piece is just a tiny little piece of digital real estate when compared  to the big boys and girls (see the ‘Financial Blogs’ section to the right!), but I at least like to think that I have some good advice to offer, backed up with my own laid bare story. I have always found advice from folk who have ‘been there, done that’ tends to be more honest and more useful than those who just think they know best.

Nearly every blogger that I have written to has replied back with words of encouragement, which has been truly fantastic! A selection have offered a link exchange, which can mean a very great deal to someone like myself who is just starting out. A few have even offered critique or post ideas, and for that I really am grateful.

A few minutes spent writing “hello” can forge lifelong friendships and contacts, and is well worth the effort.

So Why is Five Pence Piece?

I guess it’s the dream of helping other people, keeping my own life focused, and perhaps earning some beer money along the way. Some PF bloggers have succeeded in earning so much from their blog they have been able to give up work altogether. While that would be nice, if I’m honest with myself, it isn’t what I want out of this. I love my job too much.

I do like writing though, and personal finance is not only something I enjoy, but is something that you can literally write about and learn about forever. Life is always making you make money choices and whether we make the right ones or the wrong ones, make them we do.

Five Pence Piece is about the choices I have made, am making, and will make. It’s currently following my journey to get out of debt once and for all and helping others do the same if they’re at a loss where to begin. Beyond that, I’ll be looking to maximise my saving potential to perhaps buy a house in a few years time. Then there’s my plan to retire early, securely, and in comfort all the while trying to get rid of an inevitable mortgage and possibly getting married again, having children and all the other expensive events life throws our way.

There are also very few English Personal Finance blogs that are maintained by individuals on a non-commercial basis (the only other one I have found or been told about is Plonkee). The advice I offer is raw. It isn’t sponsored, or supplied with kick-backs, or designed to get search engine traffic. It’s just good, honest advice based on research done for my own use. My Savings Roundup is just one example of sharing what I learn each month.

What Do I Want Out of This?

I’d like to build up a regular readership. If what I write is useful to people, I think this will happen as a matter of course. I like to think I’m an emotionally honest blogger, as most of us are within the realms of personal finance. I’m happy to tell people on this blog things I would never dream of telling my family, for instance.

I’d like to help people. Being in debt is no fun at all. I know, because I’m in it at the time of writing this. I’d like those in a similar boat to know they’re not alone, and that there are ways out. I’m sharing my method because I know it works and because it combines the best bits of several methods I found doing my initial research on the best way to get myself out of debt. That’s not to say it works miracles or is the best, of course.

I’d like to make beer money. Those who have made it big by blogging, I respect you. I realise doing so took an immense amount of time and effort (generally we’re talking years of writing!), where I have just a month behind me right now. The important thing is few of the successful ones started out with the intention of it replacing their day job, and that is in part, why they succeeded.

I’m not doing this for the money. I know that somewhat conflicts with my prior statement, but I think if you do anything “for the money” then you’ve got the wrong mindset. I’m doing this to better myself; to hold myself accountable to my regular readers; to help others; and to perhaps earn a few pounds a month to treat myself to a beer.

I’d like to be part of the community. It’s only human nature to seek connections with like-minded people, and over time I think this will happen naturally. I’ve begun my networking journey by contacting fellow bloggers, posting well-thought out comments and linking freely to other blogger’s posts that either support my view or offer an alternative. Perhaps they disagree with me entirely, but that’s fine too! Informed choices can only be made when both sides of an issue are presented and broken down into their component parts.

Do you blog? What is your motivation?


Say Hello to Kublax

Posted on September 11, 2009 by Lee

Everyone should have what I call Total Situational Awareness where their money is concerned. If you are like me and either have or plan to have savings accounts all over the place chasing the best rates for your money, then it can be hard keeping on top of where your money is, and what it is doing.

Throw in the odd current account or 3 and credit card or 3, and things start to get really complicated.

If something is difficult then it’s just human nature – we’re unlikely to continue doing it. Money management therefore needs to be above all else: simple.

The old method was by statements, but this wasn’t very dynamic, and didn’t make projecting easy at all. It merely looked backwards. Spreadsheets came next, first in Excel and more recently in Google Documents.

Then Web 2.0 hit.


Folks in the USA have a cool service called Mint.com. It’s a total money manager or account aggregator, and once you get over the initial fear of giving some random company your login details for your banks and cards, you start to realise just how valuable their service is. It accesses all your accounts in the background and provides you with a complete overview of where you stand; All your debts, all your savings, what’s left in your current account, how much you’ve splurged on your credit cards, and how your investments are doing.

It negates the need to login to 3, 5, or 10+ different financial providers and instead gives you a one-screen view of where you are right now.

The downside of Mint? it doesn’t work for us in the UK.

You Have Mail

An email arrived this morning from a guy called Scott who’d seen my blog, noticed the target market, and wondered if I’d be interested in their service. Ordinarily I’m not too keen on unsolicited commercial contact, particularly from marketing companies, but to his credit he had clearly read my blog, knew what it was about, and bothered to find out my name and my circumstances before writing.

This wasn’t your average spam run, but a hand-crafted contact. I don’t mind those at all.



Mint I can understand, after all money gets minted. But Kublax? What the heck is Kublax? I’ll let them explain:

The word Kublax is a combination of “Kuber” and “Laxmi”. In Indian mythology, Kuber is the god of wealth and Laxmi is the goddess of fortune, riches and splendour.

OK, that’s a bit random, but I can see it catching on with time. After all I thought ‘Ubuntu’ was a silly name for a Linux distribution, but it is now one of the most popular in the world.

It’s essentially a UK-version of Mint, and I have to say I’m thrilled. I’ve only just created an account so all I can offer right now is my first impressions, but rest-assured I’ll be revisiting this topic once I have played with it some more.

Interestingly, Kublax isn’t a 5-minutes-ago startup, either. It was one of the 2007 SeedCamp winners and officially launched September last year.

First Impressions

I always make a point – particularly with these kinds of services – of reading the Terms & Conditions and Privacy Policies. I’m pleased to report that I can’t find any surprises. It does what it says on the tin, they won’t sell you out, and won’t share your details with the mafia. UK Data Protection laws apply as I’m pleased to see their service is hosted in the United Kingdom (at Rackspace no less, for the geeks amongst us).

The signup process couldn’t be simpler. They don’t even want to know your name. Just supply an email address, a password, a bit of demographic information and off you go.

The site itself is clean, well presented, easy to use and above all fast. There’s a useful introduction video to show you the highlights, and more information available if you want to convince yourself a bit further.

When you first login, it prompts you to start adding accounts. I skipped this step – just to be difficult – and started browsing around the tabs instead. There is a lot of potential here if you use it right. You can set up budgets, budget alerts and compare your debt repayments (anonymously) to others around you to see if you’re paying more than you should be, as well as the more traditional side of money management of seeing where you stand, how you are doing and where you seem to be heading.

This is where they make their money. Kublax is free to use for the ordinary consumer. It’s essentially commission driven and their aim to sell you financial products you might find useful. I can live with that. It’s unlikely they’d know better what I need than I do, but if it makes the service free them I’m happy.

Their suggestions might surprise me down the road, and in general it’ll be useful for those who are not keen on spending their life researching finance like we PF bloggers do! If they make some commission out of me, who am I to complain if it fits my money goals?

Some Interesting Statistics

One of the services I find most interesting is the ability to compare your spending with other nearby individuals based on country region. Alternatively you can get an overview of the average spend of the entire country.


You can do this on aggregate as above, or to your own spending. Guys, do you spend more on cash withdrawals for impromptu nights out than the average? Girls, is your shoe budget getting out of hand? Kublax can tell you all this and more.

To Be Continued

This is just a first look at Kublax. I’m going to start using it and I’ll come back to it in a few weeks and months after putting it through its paces. If you’re cutting edge, come and sign up and we’ll do this together. If you’d like to play it safe and see if they empty my bank account before diving in, then keep checking back.

The Kublax Review is to be continued…


Beware The Balance Transfer Cheque

Posted on September 11, 2009 by Lee

The postman dropped the usual rainforest through the door this morning and after sorting the wheat from the chaff, I was left with my LoveFilm DVD delivery, my PC Pro subscription, a Vision Express money-off voucher and something from Barclaycard.

It’s a bit early for my credit card statement, so I ripped it open wondering what they wanted. Within was a letter and attached, 2 cheques.

The Offer

“Hello Mr Five Pence Piece,

Your Barclaycard is ideal when you need to buy something. We can also help you manage your finances with a 0% balance transfer offer (a 2.5% handling fee applies). Moving balances from your other cards to your Barclaycard could reduce the interest you pay and make managing your money easier.”

Sounds pretty good so far, doesn’t it? No hard sell, and they’re offering to save me money.

“Here’s how it works.

0% interest until March 2010 (a 2.5% handling fee applies). […] Any outstanding balance after your March 2010 statement will go back to your standard purchase rate of 12.9% p.a.”

Where’s The Catch?

Still struggling to see the catch? Well, based on what is written in the letter and copied above, there isn’t one. Transfer a balance, pay no interest on it until March 2010 for just a 2.5% one off fee. If you manage to pay it off before or by March, then it’s 0%. Have a little bit left after that, they’ll charge you your standard purchasing rate on the remaining balance.

That really could save you money off of other cards, so what’s the problem?

Check the Small Print

Flipping over the letter to the small print on the back, my eyes fell on the ‘Allocation of Payments’ section. Here it is:

Payments you make are applied in the following order:

  • Default Charges and interest on Default Charges
  • Promotional Balances (if you have more than one promotional balance your transferred balances are paid before promotional purchases, then open ended offers first, then lowest rate first, then oldest offer before newer)
  • Interest and other charges
  • Standard balance
  • Cash balance and Barclaycard cheques (unless there is a promotional rate).

Confused? Don’t worry; that’s the idea.

Picture the Scene

I’m going to use Selina again, my imaginary friend from the Dig Yourself Out of Debt series. I’m sure she won’t mind too much.  As we know, she has 2 credit cards; One has a £5,000 balance at 14.9%, and another with a £1,000 balance at 24.9%.

Her new Barclaycard for which she’s just received these cheques didn’t have a promotional rate to begin with, but she had been using it on and off to buy stuff she needs when she runs out of cash towards the end of the month before learning how to be more sensible and start digging herself out.

The purchase rate on her Barclaycard is 6.9% (non-promotional) so carrying a balance wasn’t that big of a deal to her, and her balance currently stands at a not too terrible £500. The minimum payment is just £10 and each month it costs her around £2.50 in interest.

A little knowledge is a dangerous thing. She’s just caught the money saving bug, so decides she’d be far better off by transferring her expensive £1,000 balance (at 24.9%) onto her Barclaycard, and paying it off before March 2010. She writes the cheque, and puts it in the post.

Job done. It cost her £25 to transfer her £1,000 balance (remember that 2.5% ‘handling fee’?) but she is saving £20 every month in interest fees from the old card.

So far, so good.

It’s Behind You!

Seen where this is going yet? Selina rumbles along paying off amounts she can afford each month. Sometimes more than the minimum, but never the maximum amount as she cannot afford anywhere near that. She feels good knowing that she is spending out less money than she was, even if it takes here longer than March 2010 to pay it all off.

But is she really?

The minimum payment hovers around the £70 mark. Sometimes she pays up the minimum, sometimes she stretches that to £100. Here’s the problem: From the list of the way payments are applied above, Selina is currently paying off her balance transfer. This might well be at 0%, but she is still accruing interest on her ‘old’ £500 balance from purchases, and will continue until she pays off every last penny of the balance transfer!

I’m still wondering if a balance transfer cheque (if not paid off in full by the time the promotional rate expires) reverts to the “Cash balance and Barclaycard cheques” section of payment allocation. If they do, then they’ll sting you for even more interest while you then pay off your standard balance – it’s not terribly clear (and isn’t that just the point).

Imagine how much worse this would be if she’d taken a cash advance before doing the transfer. With it’s 3% fee and 28.9% interest rate, she’d accrue interest on that as well as her old £500 balance month in, month out. The only way she could stop paying interest is to stump up £1,500 in one go and pay off the card in full.

Credit Card Companies Are Not Your Friend

Despite the friendly wording of their letters (if you’ve not been naughty at least), they are not your friends. They are businesses, and businesses are out there to do one thing: make lots and lots of profit for themselves and their shareholders.

I may appear to be picking on Barclaycard but rest assured all credit card companies are the same. It’s just they’re the first this year to have sent me any so were timely cannon-fodder.

So what did I do?

Putting Selina back in her room – after all the cheques were mine not hers in reality – what did I do with them? I already have a promotional balance transfer on my card, and no purchases. I don’t have another credit card with a balance that isn’t paid in full every month, so I put them in the shredder.

To truly and safely benefit from this 0% deal, my Barclaycard would have to have a balance of £0.00.

To stay safe and get the most out of your credit card, stick to one promotion at a time, and don’t mix when it comes to purchases and balance transfers. If you have a card you got for a balance transfer, do not spend on it. Do not draw cash out on it. Freeze it in a block of ice and keep it in the freezer if you don’t trust yourself.

One thing is for sure – mixing standard and promotional rates will quickly make you poor and that’s what they want. The more you’re a slave to credit, the more profit they make.

Don’t fall for it.


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