I was reading this interesting article over on the thisismoney website about Alistair Darling’s plans to spend “whatever we can” to keep people in jobs during this recession. Now this course of action might be commendable as it is an attempt to keep people in work and off benefits – which I guess would cost the country more in the long-run.

In a country where the economy is inextricably linked to the housing market, can it be wise for a Government to simply try and spend its way out of recession?

I don’t like “big government” and feel that the exit from the recession should be down to market forces. What this government should be focussing on is improving the education system and retraining those people who are currently or who have recently been working in dying industries – those industries in which we are no longer competitive on an international playing-field.

Funding this expenditure will only lead to further raising of finances by the Governement which will generally be through higher taxation.

Whilst the Government is spending, most of us will be saving, rebuilding our portfolios and taking advantage of depressed stock markets for longer term capital growth and real income.

Just a reminder – the ISA allowance increases for the over 50’s on 6th October 2010.

In this post we will answer some of the many questions we are receiving from visitors to the site. Although we cannot answer your questions directly and we are not authorised to give financial advice were we see a theme running through questions from our readers we will provide a generic answer on the site.

I remember at school the teacher always used to say “ask a question – if you have a question you can guarantee that half the class also have the same question but are too scared to ask!”.

Where can I get a free income and expenditure spreadsheet?

We posted an article a number of months ago which has proved to be extremely popular. Our Excel spreadsheet allows you to enter income and expenditure over a 12 month period, broken down into months to see when your cashflow will be good, and not so good.

Here is the article – Cashflow Forecasting – Income and Expenditure Spreadsheet

When does the ISA allowance change?

The ISA allowance is set to increase to £10,200 for the over 50’s on 6th October 2009, with the increase coming into effect for the under 50’s from 6th April 2010.

More info on changes in ISA allowances 2009/2010 can be found in these articles:

New Tax Year – New ISA Allowance – 2009/2010
Changes in ISA Allowances – Budget 2009

How can I avoid paying tax on my Bank Interest – I am a non-taxpayer?

If you’re a non-taxpayer you can register to receive your bank and building society interest gross (i.e. with no tax deducted). All you need to do is fill out a simple form and pass it to your bank or building society.

See this article:

Non-taxpayers – ensure you receive interest on your savings with no tax deducted

I am a non-taxpayer – can I pay into a personal pension?

Yes you can, you are entitled to invest up to £3,600 (gross) each tax year (before 5th April 2010) and receive tax relief on the money you invest – basic rate income tax relief is received on each contribution you make – you effectively only have to invest £2,880 to have £3,600 invested – the pension company reclaims the difference from the Inland Revenue (HMRC) even though you have paid no income tax!!!

See this article:

Pension Planning for Non-Earners

Is Inheritance Tax payable on ISA Investments?

Yes, at the date of death the ISA loses its tax-free status and forms part of the deceased’s estate for calculating any liability to inheritance tax.

I want to surrender my Investment Bond but the life insurance company says it will apply a Market Value Adjustment – what is this?

MVA/MVR’s can be applied to a with-profits investment at the time of encashment if there has been a fall in the stock market during the period before surrender. This is to ensure the person surrendering the investment receives a “fair value” for their slice of the with-profits fund and to protect remaining investors from those taking their money out.

Some investment bonds have an MVA free date – usually on the 10th anniversary – check your paperwork issued at the time you took out the investment or phone your life company for more details.

Article – With-Profit Bonds – Avoiding a Market Value Reduction

Can a Personal Pension be paid to Both Partners?

No – the pension is only payable to the “annuitant” (the person who took out the pension and bought an annuity – an income for life – with the fund at retirement).

A widow(ers) pension can be added to an annuity as an option, at the time the annuity is purchased – usually 50% or 66% of the pension if the person whose pension it is dies first.

Did you know you can shop around for your pension at the time of retirement – it’s called the Open Market Option – more information on Personal Pensions

Can additional lives assured be included on an Investment Bond?

Yes – you can have more than one “life assured” on an investment bond at outset. Parents might like to consider adding their children – this allows the investment bond to continue after death of the parents. Consult an Independent Financial Adviser.

Is it true that the longer you save the bigger your money will grow?

Yes – this is related to “compound interest” and the “time value of money”. In basic terms, interest earned on a savings account will, in subsequent years also earn interest.

For example, if you invested £100 in year 1 at an interest rate of 10% (if only!) – at the end of year 1 you would have £110. In year 2 you would earn interest on the £100 initially invested and the £10 interest received in year 1 – so the interest received in year 2 would be £11 (£10 on the initial amount invested and £1 interest on the £10 interest added at the end of year 1!).

Interesting articles: –

It’s not how much you save but how long
The Rule of 72 – The Time Value of Money

This is a selection of the many questions we receive – please contact us if you have a question and we will try to answer it in a future posting.


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Anyone who is committed to increasing their personal wealth would be strongly recommended to buy a financial calculator.

I bought my first financial calculator when I was at University some 18 years ago, it was a Hewlett Packlard 10B Business Calculator, and I still use it today. The model has been updated now – Hewlett Packard 10BII – but the new model still offers the same great facilities I have come to know and love.

It carries out all the normal calculations you would expect of a scientific calculator, but also provides the ability to calculate the following:

Growth of a set level of regular savings, given amount, rate of interest and term in years is known
Net Present Value (of a range of regular inflows of cash)
Internal Rate of Return
Compound Interest Calculations
Time Value of Money

For example, if I save £100 per month, for 25 years, at 6% interest this calculator will calculate the future value of my savings (the answer is £69,299!). If I change this to 26 years, the answer is now £74,807 – an additional £5,508 for investing for another 12 months!!!

For retirement planning, say I have identified that I need a pot of £360,000 in 23 years time to retire on the income I need to live in retirement, I can calculate how much I need to invest on an annual or monthly basis, assuming any rate of return, to hit the target.

The third calculation I like to use the calculator for is calculating how long money will last for, for example, I have £10,000 today and I wish to draw £250 per month from it. Based on an interest rate of 4%, my calculator shows me that my money will last for 43 months.

Here’s the manual (4.0MB) for my Hewlett Packard calculator – it shows all the different calculations you can do with a financial calculator.

Buy a financial calculator from Amazon.

Related articles:

Rule of 72 – Time Value of Money

It’s Not How Much you Save, But How Long

As part of my ongoing frugal blitz of my finances I have now identified 5 things I waste money on on a regular basis which I will now cut from my expenditure going forwards. These are common items which most people will buy now or at some time.

By opting for an alternative I can save a considerable amount of money each month!

Pre-packed Sandwiches

This is big business – everyone is selling them – supermarkets, newsagents, petrol stations. I usually buy a sandwich for my lunch as there is a large supermarket near my office. When you add the cost of the sandwich, a packet of crisps, a drink and some fruit I am easily spending upwards of £5.00 per day for lunch.

A typical pre-packed sandwich will contain the following:

1 Slice of bread
Some margarine
A filling (normally more salad than filling)
Plastic packaging

From now on I will buy sandwich bags from the supermarket and make my own sandwiches.

Bottled Water

Crikey – this stuff is more expensive than petrol! If I am in dire need of buying a bottle of water I will always opt for the larger 1.5 litre bottles as the smaller bottles are prohibitively expensive in my opinion. I have invested in a water filter for the office and keep it in the fridge.

Monthly Gym Membership

I signed up for the local gym about 18 months ago and, at first, I was very regimented and went 3 times each week. The monthly subscription started at £60 per month, which, based on my initial usage was £5 per visit, which I considered good value for money based on use of the gym, sauna, steam room, jacuzzi and a few lengths in their olympic-size pool.

Time and work pressures mounted to a point were now I go one a week if possible – this works out at £15 per session which is not great – I have looked around and can get the same equipment at my local “leisure centre” for a third of the price – so I am cancelling my gym membership but will reinstate it if my use of the local leisure centre increases again in the future.

Extended Warranties

I, like many others, are offered extended warranties when I buy goods in electrical stores. I never take the extended warranty as I don’t personally believe they offer great value for money – I instead ask what the cost is and place that amount in a savings account – I have managed to accumulate over £1,400 in the last 3 years.

Instead, I rely on the Sale of Goods Act 1979 – all products should be fit for their purpose and of merchantable quality. I have had to argue on a couple of occasions with shop managers but both times I have managed to get my item replaced.

Newspapers and Magazines

I generally find that newspapers and magazines are filled with articles I am not interested in or page after page of advertisements. Knowing that the majority of magazines with low circulation make their income from selling advertising space rather than selling copies, many magazines these days seem to simply be a collection of adverts, interspersed with the odd article.

Any news in print is out of date! I can get instant news online and therefore have no need to purchase a newspaper any longer.

Can you think of any other wastes of money? Please add your comment below.

This post is inspired by Rob over at moneywatch.co.uk who has published his personal finance blogroll – a list of hte personal finance sites he reads on a regular basis and I am proud to see that shrewdcookie.com is one of them!

This is a list of the sites I read on a regular basis through their RSS feeds – any time their sites are updated I can read the new posts they have written through a feed-reader. I use the one which comes installed with Internet Explorer 7. Up on the toolbar you will see a little symbol which looks like this: –

Shrewdcookie.com - personal finance RSS feed

This is the RSS reader – it simply shows the text version of latest posts published on a blog – when the symbol is greyed out there is no RSS feed – when it is coloured orange then there is an RSS feed present.

Click on the above symbol to see my RSS feed. If you then click on “subscribe to this feed” you will then be able to view all new posts I publish under the “Favourites” button on your menu bar by choosing the “Feeds” tab.

Anyway, here is a list of the personal finance sites/RSS feeds I read on a regular basis: –

RSS FeedGet Rich Slowly

RSS FeedMoney Dashboard

RSS FeedMoney Watch (highly recommended)

RSS FeedMoney High Street

RSS FeedMoney Magpie

RSS FeedPlonkee

RSS FeedSeth Godin (marketing not money related but a fantastic read)

RSS FeedThe Money Well

RSS FeedUK Money Pot

RSS FeedWise Bread

RSS FeedMoney Hospital

There are many more which will be published in a future article.

If there is a website which I have missed from this list which you feel I should read on a regular basis (!) please add a comment with a link below.

I was reading an excellent post over at Seth Godin’s blog which got me thinking about budgeting, wealth and financial independence.

The article talks about how over 2 billion people on this planet live below the poverty line. Now for one moment, the chances are that if you are reading this article, you are not living in the abject poverty being suffered around the world but you could be in a state of personal financial “poverty”.

Do you spend more than you earn? Does more money float out of your bank account each month than flows in?

If you spend just one more £1 than you earn each month, you will get further and further into debt. If you spend £1 less than you earn each month that is £1 extra put in reserve.

To achieve financial freedom in your life time you need to spend money only on necessities, and save for a later time, when you can afford to buy luxuries.


1. Prioritise your debts – pay those carrying the higher interest rates first

2. Draw up a cashflow forecast – see how your money comes and goes each month over the next 12 months.

3. Prune all those “luxuries” you don’t need – e.g. possibly downgrade on your satellite or cable package, cancel that gym membership you never use.

4. Destroy those credit cards – only use cash for purchases – open a separate savings account for those large, one-off purchases you need to make each year.

5. Live by the mantra, “10% of all I earn is mine to keep forever”.

What else can I add to this list – please comment below.

The following is a list of the top ten articles visited in July 2009: –

1. Pay Yourself First

This article stresses the importance of saving first from your income, and then living off the remainder, rather than the other way around. Those who save first and spend what is left invariably become richer than those who spend first and save what is left, if anything. A great lesson for us all!

2. Cashflow Forecasting – Planning Income and Expenditure

The basis of any budget is knowing what income you have coming into the household, compared to what is going out in the way of expenses – this extremely popular spreadsheet will help you with this vital task.

3. New Tax Year – New ISA Allowance – 2009/2010

The Chancellor increased the ISA allowance to £10,200 from 6th October 2009 for those over the age of 50, with the remainder of the population enjoying this allowance from 6th April 2010.

4. Investment Bonds – An Introduction

The investment bond has been a key financial planning tool for a number of years – this article discussed the benefits as well as some of the shortfalls of this often misunderstood investment vehicle.

5. Retirement is an Income, not an Age!

Many people think they have to work to a certain age – unfortunately for most people this is a reality as they never take control of their finances and make their money work for them. By setting an annual income goal, and by paying yourself first, it is possible to retire when you want and not when you have to.

6. Small Increases in Income Make a BIG Difference!

When we consider income and expenditure, most if not all people have fixed costs each month – rent, mortgage, food, insurance, car etc. This article discusses how small increases in income can have a big effect on your standard of living and quality of life.

7. Non-taxpayers – ensure you receive interest on your savings with no tax deducted

Many non-taxpayers are, unfortunately, paying tax on their bank and building society interest – they don’t have to! Completing a simple form provided by the taxman can put more money in your pocket.

8. Over 60? A great free book from the Government

This book contains lots of useful information – download it now for yourself or pass a copy to a relative.

9. State Pension – how much will you get?

Get a free state pension forecast – it’s worth planning ahead – especially if you’re not going to get the full State Pension – check to see what your position is now.

and finally…..

10. New Passport Fees – act quickly to save money

If you’re within 9 months of renewing your passport do it now – save having to pay the 7.64% increase in price coming in September – consider it another way – if you could find a savings account paying 7.64% net after tax would you put money in it!!!!!

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If like me you tend to change your mobile phone every few years chances are that you have an old mobile lying in a drawer gathering dust!

Did you know that you can sell your old mobile phone to realise some cash for your old phone?

For instance, I am just in the process of upgrading from my old Sony Ericsson K800i which is now 3 years old and started to look tired. A colleague of mine in the office said “why don’t you sell it? You could get a good price for what effectively is a phone you no longer need.”

Having searched the internet I was amazed to find that there are a number of sites which buy old mobile phones. Having looked at several I was happy to see that I could indeed sell my K800i, which is now nearly 3 years old, for £28.00!

I have mentioned this to a number of friends and relatives and many have said they were surprised about the amount of cash being offered for my old phone and that they also have old phones which they are now going to sell!

Here are links to some of the sites which buy old mobile phones (click the logo to visit site for a quote for your phone):-

Hi – thanks for visiting shrewdcookie.com.

The blog has been running for a few months now and has passed all my expectations!

I would really appreciate your feedback.

  • What do you like about the blog
  • What don’t you like (more important!)
  • What should I change?
  • Should I keep it focused on personal finance or should I widen into more areas of “shrewdness”?

Please add comments below or contact me direct.

Thanks – look forward to hearing from you all!


This is a guest post from Iain over at moneysupermarket.com.

Secure Savings 

During these bleak times of economic downturn and insecurity saving is possibly more important than ever. However, with the collapse of so many seemingly ‘secure’ banks across the globe many potential savers find themselves asking where exactly is the best place for their funds, with some contemplating whether or not the best place for their money is under their mattress!

When considering whether or not to invest funds into a bank or building society there a number of factors to consider that can help determine the strength and security of said bank or building society. Ratings known as “Fitch ratings” are attributed to each bank and building society, primarily for the use of professional investors but if you can get your hands on the rating of your bank it will give you a good idea of its strength and security. This ratings system offers a rating based on the banks available funds and ability to repay any outstanding debts, with ratings ranging from AAA (the best) through to BBB.

Once a safe house for your funds has been established it is then essential to select a savings product that offers consistent and profitable returns. Considering the current economic climate the best option may be to invest funds into fixed rate savings bonds or similar products that offers guaranteed returns. Such savings products are always a safe bet as the investor is safe in the knowledge that as long as the terms and conditions of the account are adhered to they will benefit from guaranteed returns of a fixed amount.

Savers will tend to lean towards fixed return products in times of economic downturn as opposed to investing in funds where returns are based on the performance of certain stocks and shares. It goes without saying that in the current economic climate the risk level of investing in such products is extremely high and potentially disastrous. However, this is not to say that for the more daring and speculative investor there is not a lot of money to be made. The potential returns of investing in stocks and shares are much higher than the returns gained from fixed rate products as long as the investor is willing to take a massive risk!

The ideas and opinions expressed in this article are those of the original author and may not be those of shrewdcookie.com