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Monday, April 12, 2010

How to save up £264 a year without effort

Pennies from Heaven?

There used to be a saying 'look after the pennies and the pounds will look after themselves'. Such a phrase seems incongruous this day and age, where an overly materialistic society ignores small change and prefers to build up enormous debts on credit cards.

But here is a brilliant way to save £264 a year without effort - something I have been doing for several years now.

Each January, I start putting aside all my small change, ranging from 1p to 20p coins. I bag it up each month and I'll generally have about £10 of 20p coins, £5 each of 10 and 5p coins, and £1 each of 2p and 1p coins. Each month, this works out at about £22.

I then put this in my rainy day account - which is effectively the account I use for my Christmas shopping or to pay off the lion's share of those dreaded insurance and ground rent bills that always crop up in December.

Over the course of the year, this works out at 12 x £22 - £264. For people like me whose income just barely exceeds the outgoings, trying to save anything out of one's income can be a daunting task. But even the smallest coins have a place - if we are not too proud to count them up and use them!

The thing is, we don't look after the pennies, so how do we expect the pounds to look after themselves? This is not about being miserly, but about being wise stewards of what we have.

So, how to kick-start this savings habit?

1) Be Not Proud!
Don't be too proud to collect the coins and bag them up each month before taking them into your bank/building society. Pride goes before a fall...

2) Clean your house
You'd be surprised at how much is lying around in jars, in the proverbial sofa cushions, in desk drawers, in pockets and handbags and generally scattered around. While I was clearing up on saturday I discovered £3.20 worth of small change lying around. Happy days!

3) Be disciplined
Rather than raking around your purse for coppers to buy a chocolate bar, why not actually decide to go without - you'll save money and your weight will benefit!

4) Ask for bags
Your bank can give you a ream of small coin bags to help you put things aside. It's much easier to add coins to small bags over the course of a week rather than to stick it all into a jar and then have the hassle of emptying that a year

5) Savings accounts
If you have a high-interest savings account (HAHAHAH! How we laugh! I remember those - just about!) then do consider adding your savings into that each month. Should the bank base rate ever rise, then you will benefit from the additional cumulative effect of monthly or quarterly interest rate rises on your account.

Just to reiterate, Mermaid is not sitting at home in a darkened loft, counting piles of coins and laughing maniacally to herself in Scroogish glee. But I do smile every Christmas when I have a good sum to spend on presents for my family and think it's worth passing on a good tip when I can!

The Mermaid and her Accountant

As for good tips, Pizza Express is doing another great deal on two-for-one main meals and pizzas in the UK up to the 5th of May. Free Pizzas - hooray!

Happy saving!


negentropist said...

Hi !

Old fashioned, but I think ... appropriate :

Pennies from the Heaven


TimT said...

Well, I’m halfway there. Like you, I bag up 1p, 2p and 5p coins (not 20s, though – they just get spent) and take them to the building society every now and then. But I’m afraid I just put the proceeds in my pocket and spend them, which means I don’t get the satisfaction of counting my accumulated wealth at the end of the year.

But now you’ve pointed it out, I may start doing just that.

Gorilla Bananas said...

The thought of you bringing those moneybags to the bank is quite delightful, Mermaid. Would you consider doing it in a leprechaun costume and getting someone to take a photo? I would buy the costume for you if you promised to do it.

Electro-Kevin said...

"While I was clearing up on saturday I discovered £3.20 worth of small change lying around. Happy days!"

WTF ???

Your lounge floor must have been like the bottom of one of those penny arcade machines !

How often do you clean, Mermins ? Bi-annually ?

Electro-Kevin said...

The biggest problem in Western accounting has been the cashpoint machine.

We have - with overdraft facilities - become far removed from money being real and finite as it just appears from a hole in the wall when we want it... and then the sum gets transferred onto a loan when that becomes too much.

Thus people have become broke - without really realising that the cost and standard of living has overtaken their earnings.