Moneysucks Monthly Challenge is underway

Zoe Nisbet starts her monthly challenge today. For a whole month she is going to keep a note of everything she spends, and at the end of the month we’ll have a chat about what lessons she has learned about the way she uses her money.

Zoe will be blogging regularly during the month to keep us updated on her progress.

Here is what she says so far:

“So the challenge begins today. I have my little notebook ready where I will record everything I spend. I am excited about this exercise as money is something I tend not to think about. I seldom check my bank balance during the month I guess because I am scared to do so. If I think I have spent a lot of money I will just be careful for the next few weeks until my pay has gone in. I am hoping this challenge will shed light on how much I actually spend during a month placing me in a position to make informed decisions in the future about my money.

A few of my friends have decided to do the challenge with me.

Mary-Louise (ML) who works next to me has decided to do this monthly challenge. She says “I have never really kept much of a tab on my spending. If you asked me how much I spend in a month I would really have no idea!! So I think it’ll be really interesting to find out how much I am spending and on what! At the moment, I’m trying to work my way out of a fairly substantial overdraft and so it would be great to get some tips on how I can be more careful with my spending. It’s the first morning and I’ve already spent £71.50 so I’m doing well!”

Let us know if you want to join in!

Money For Life Challenge

A team of eager pupils from St.Lukes High School in Barrhead have been successful in reaching the first stage of the ‘Money for Life Challenge UK’, impressing the judges with their fun and educational way to teach money management. The Money for Life Challenge is run by Scotland’s Colleges, it is a competition that helps you to run your own original money management projects, to help benefit the local community. To find out more visit http://www.moneyforlifechallenge.org.uk/

http://www.moneyforlifechallenge.org.uk/

The team from St Lukes naming their project ‘Pounds, Pence and Common Sense’ and are aiming to inform senior pupils about to make the transition onto university of how best to manage their money at this time. They will be doing this by producing four, one hour long radio shows on Pulse 98.4. To date three radio shows have been successfully broadcasted and through different guest speakers a range of topics have been covered. The shows have featured UWS financial advisor, young scot and Fergus Muirhead. The last show of the series on Thursday 23rd January will have students or recent graduates on sharing their money stories with the team.

Some of the team have agreed to take part in a challenge that Fergus Muirhead set us. We will be recording what we spend for one month. Weekly blogs will be appearing on his site and we will conduct another radio show when the challenge is over to hear all about it!

Pupils will be in with a chance of winning a place in the UK grand final, however the competition is very fierce so we need all the support we can get. We will keep you updated as you can vote for our project once we have completed our last radio show. In the meantime please like our facebook page: http://www.facebook.com/pages/Pounds-Pence-and-Common-Sense/238464162890688

I’m 18. Should I have a pension?

Q. I am currently an undergraduate student and 18 years old and have numerous savings. I currently have a part time job while studying at university. Although you may not be permitted to give advice on this sort of thing do you think it would be, in the current economic climate and uncertainty about the jobs market, be worthwhile opening up a pension now so that at least I have something started when I leave university? Something like a stakeholder pension only requires at least a £20 investment per month. Please give me your thoughts on this matter- its just we are all told to start early!

Jack Fraser

A. It’s a really good question Jack and I’ve just read an article in one of today’s papers telling me that more than 25% of people are going to retire with nothing but the State Pension to live on, so the fact that you are starting to think about making some sort of pension provision so young is great. As you rightly say you can start to invest into a Stakeholder Pension with as little as £20 per month and that will be increased when it is invested since your pension company will reclaim basic rate tax on each £20 you invest.

The benefit of starting to invest in a pension now is that you will be saving (at least under current legislation) until you are at least 55 which means that your money has at least 37 years to grow, and it will grow in a fund that is, at the moment at least, mostly tax free. So the pluses of investing in a pension at the moment are that you should benefit from long term growth (although the market is fairly fluid at the moment and you may see some short term losses if you invest in particularly adventurous funds) and that you will receive tax relief on any investments you are making.

The downside is that you will not be able to access your cash until you are at least 55 – or maybe older if legislation changes between now and then – and you will not be able to have all of your cash back as a lump sum. Currently you will be able to take up to 25% as a tax free cash sum with the balance being taken as income.

Of course when you start work you may find that your employer offers a pension scheme at which point you may want to move the Stakeholder Scheme you are thinking of setting up now into your employer’s Scheme partly to make it easier to administer going forward and partly because it might be easier to manage the investment strategy you adopt via one plan rather than two.

It is also the case that stakeholder pensions are flexible enough these days that you can change the level of investment that you make to cope with your own circumstances so that if you need to stop investing for a while because you are not working then you can take a break from your pension and pick it back up again when you start to work.

The amount of money you can invest is dependent on your income on a year by year basis so you will have the flexibility to increase or decrease as your income changes.

I haven’t talked about the way you invest your money once it is in the pension here so will come back and address this issue in a separate post.

What’s on Moneysucks? for Students?

Here is an example of the ‘one minute videos’ we willl be posting on Moneysucks in the coming months, building up to a comprehensive library of help on all sorts of money and consumer issues for students. Budgeting and borrowing will obviously take up much of the space but we’ll also be looking at the best ways to put some money aside for the future as well as how to plan to buy your first house after you have started to work.

For starters tomorrow I’ll be answering a question from an 18-year-old student who wants to know if he is too young to start saving in a pension.

That and much more to come over the coming months at Moneysucks? If you have a question that you would like us ro answer here then please drop us a line.