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WHAT YOU NEED TO KNOW ABOUT COMPOUND INTEREST

Guest Post by Retired Broker.  Follow him here and read George’s Blog here.

 

Cash savings are dire; there are no two ways about it. Once inflation is taken into account, the buying power of almost all the accounts currently available will be less than when you started. So is there any point in using them? Well, probably!

 

The fact of the matter is that a home for spare cash, no matter how modest, will always be required. So how do you make the best of this not so great situation?

 

There are a couple of ways to approach it which require a little effort and some patience. The first thing to grasp is the magical powers of “Compound Interest”.  Compound Interest is where your savings accrue interest, and then that interest will also accrue interest and over time the rate of growth gets faster.

 

It’s a slow process, but worthwhile, especially if you have long term goals. A little while ago I posted a blog about how much is spent over a year by buying a take away coffee every day for work, here’s the link  http://theretiredbroker.com/coffee-mugs.

 

You might need something stronger when you read it! For the purpose of a compound interest illustration, let’s assume that you are going to give up one coffee a week and put that money away in a regular savings account.

 

That’s £2.55 a week or £11 a month (yes I know it works out at £11.05, but I’ve rounded it down ok?) A quick look at some comparison sites will see that a few regular savings accounts will pay 2% or more, so for the purpose of this exercise we’ll use 2%.

 

The table below shows how much £11 a month will grow at 2% over different numbers of years.

 

 

1 yr £133.22
3 yrs £407.77
5yrs £693.52
10yrs £1459.92
15yrs £2306.84
20yrs £3242.77

 

While fully understanding that interest rates will change and that inflation will erode the actual buying power of the money, the point here is that it is money that you would otherwise not set aside. Even a modest amount such as £11 a month may be really useful in all those years time.

 

If you look at the 20 year period, the actual amount paid in amounts to £2640, so that is an actual growth of £600. Could be ideal if you have a young family and want to set something away for university, car or travel.

 

The other advantage of regular savings is that you can adjust what you save as time goes on or add any spare windfall you may get. This brings me to the second advantage, which does require a tiny bit of effort. A lot of these regular savings accounts offer a rate of interest for a set period only, usually a year.

 

After this the rate will either tumble or collapse. If you don’t stay on top of it, your savings will stagnate. So you need to remember that Cash Rates Are Portable. That’s right remember interest rates are C.R.A.P. So you need to treat them like your annual home or car insurance and review them every year.

 

Once you have come to the end of a good interest rate, shop around’ find another good rate and transfer your savings over to the new account and continue with the monthly saving, you may just be glad you did!

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5 FREE & LOCAL THINGS TO DO DURING SCHOOL HOLIDAYS

Easter holidays are upon us once more and as a parent it can be difficult to keep kids occupied during this time.  It can be even more difficult if you are trying to cut down or your budget doesn’t stretch to things that would be more expensive.  There are plenty of things you can do which is either cheap or better still free!

 

 

GOING TO THE MUSEUM

Find out the times of your local museum, a great day out for the whole family and it’s cultural too!  Take a peek at Museums Association and click on your local area which are free to enter.  If you’re in Belfast the Ulster Museum in Botanic Gardens is a must, you can wander round all day and then take in Botanic Gardens – that will certainly keep the kids occupied.

 

 

ARTS & CRAFTS AT HOME

Crafting can keep kids occupied for ages and it doesn’t have to cost a lot.  Keep old toilet paper tubes, newspapers or cereal boxes and let your kids get creative – the possibilities are endless as to what they could make.

 

 

BAKING

I know it can be messy but allow your kids freedom in the kitchen (with supervision of course!) to make buns or make pizzas.  Kids just love cooking and seeing the result at the end makes them so happy and they are also learning a great life skill in cooking.

 

 

NOTHING BORING ABOUT BOARD GAMES

I just love retro / vintage board games. Visit your local charity shop and see what you can buy or better still ask family and friends what board games they have lurking at the back of a cupboard. I remember playing Monopoly with the kids and it took hours but it was great fun for everyone especially since the weather was awful!

 

 

FREE TOURS OF GOVERNMENT BUILDINGS

Another great free activity is to see what Government buildings are open and offer free tours.  For those in Belfast, you can take a free tour of Belfast City Hall led by experienced guides.  It’s a great way to find out about your local history and keep the kids occupied too!

 

So what are you up to this Easter?

 

Elf x

 

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5 EASY WAYS TO SAVE MONEY NOW

Saving money is something that most of us want to do but practicing it can be a whole different thing, especially when you have kids, a mortgage, and household bills that seem to keep rising.  But I promise you, you can save money each and every day with a little dedication – some people call it a thrifty life but call it what you will if you can save money on things you spend everyday then you can keep that money for something you really want!

 

Below I’ve listed some great ways you can start saving money today…

 

GIVE REUSED A GO

Once upon a time it was called second hand but these days it’s chic to go reused!  If you need to buy furniture, bikes, curtains, even clothes try the likes of eBay or your local Gumtree where you could save yourself a few pounds.  I always have a look on my local Gumtree as the quality is great and the price is just right for my budget.

 

 

GET IT FREE IF YOU CAN!

I absolutely love Freegle, just google it to find your local Freegle group.  People want to save items going to landfill so they offer them for free on these groups.  I’ve given away a few items and received a few through this means so why not give it a try? Also, remember to use your local library if you want to read the latest books, there are also Councils who offer free kids books to read and when you are finished you return them – go have a wee look to see what you can get for free.

 

 

HAGGLE WITH YOUR CURRENT PROVIDERS

A great way to save money is to phone up your current utility, phone or cable providers and ask them for a discount.  I have saved hundreds this way and all it takes is the cost of a phone call.  Be friendly and just explain you are trying to save money.  Good luck!

 

 

VISIT CHARITY SHOPS

I love charity shops, why not visit some of your local ones and see what you can find?  I often get some bargains in terms of clothes for myself with some items only costly £1!  Many people visit charity shops now with some even calling themselves vintage!

 

 

BUY SEASONAL ITEMS AFTER THE EVENT

I do this all the time to save hundreds especially after Easter and Christmas.  Shop in the January sales for Christmas wrapping paper and cards and maybe get some gifts with 70% off.  Go Easter egg hunting after Easter to get huge discounts on all types of chocolate and stock up if you’re kids like a treat.  You can also try this after Mother’s Day or Father’s Day too.

 

Happy Money Saving.

 

Elf x

 

THINGS YOU CAN DO OR SELL TO MAKE EXTRA CASH

HOW TO EARN CASHBACK FROM SHOPPING ONLINE

MAKING EASY MONEY WITH SURVEY SITES

EARN EXTRA MONEY FROM CLICKWORKER

WANT TO MAKE MONEY WITH YOUR OLD RECEIPTS?  READ ALL ABOUT IT HERE.

WANT TO EARN GIFT VOUCHERS?  READ MY REVIEW OF SWAGBUCKS.  

INTERESTED IN KNOWING WHAT A VIRTUAL ASSISTANT DOES AND HOW YOU CAN MAKE MONEY?  READ MORE HERE.  

WANT TO GET PAID FOR COMPLETING SURVEYS?  READ MY POST ABOUT PROLIFIC ACADEMIC HERE.

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TOP TIPS FOR SAVING FROM MY GRANDMOTHER!

 

 

My Gran passed away a long time ago but there are things that have stuck with me – sayings that are often not repeated but sayings that I believe should be repeated and passed down from one generation to the next!

 

Living on her own for over 20 years after my Grandad died, she was a keen saver who saved each year to travel to visit her sister in Canada at the same time as going on outings with her friends and making sure her house was always spotless.

 

So, what were my Grandmother’s top tips?  Well I’ve listed some of them below just for you…

 

Grow Your Own

While Gran never had a large garden, she did grow herbs in a plant pot on the windowsill just outside her kitchen window.  Why not consider buying a few seeds in your local pound shop and get planting?  Will certainly save you a few pounds and make your food taste delicious.

 

Waste not, want not

I always found this saying confusing as a child but as an adult it makes perfect sense.  Gran was always about preparation, making meals in bulk and ensuring nothing went to waste.  Why not give your own meal planning a go and head over to my How to Meal Plan post to find out how?

 

Look after the pennies and the pounds will look after themselves

Again, another saying that only made sense as an adult.  But it is still true today, break your savings target in to small chunks and just concentrate on saving a small amount – after all it will soon amass in to a large amount of savings without you worrying too much!

 

Make do and mend

This really is a classic and one which has seen a revival in recent years.  My gran always mended – mended her skirt, sewed patches in her bedspread, fixed rather than throw something out.  Why not see what things you can mend instead of throwing them out?  I recently mended our tumble dryer – bought the part on EBay and watched a YouTube video on how to install it – saved myself hundreds!

 

Happy Saving!

 

Elf x

 

THINGS YOU CAN DO OR SELL TO MAKE EXTRA CASH

HOW TO EARN CASHBACK FROM SHOPPING ONLINE

MAKING EASY MONEY WITH SURVEY SITES

EARN EXTRA MONEY FROM CLICKWORKER

WANT TO MAKE MONEY WITH YOUR OLD RECEIPTS?  READ ALL ABOUT IT HERE.

WANT TO EARN GIFT VOUCHERS?  READ MY REVIEW OF SWAGBUCKS.  

INTERESTED IN KNOWING WHAT A VIRTUAL ASSISTANT DOES AND HOW YOU CAN MAKE MONEY?  READ MORE HERE.  

WANT TO GET PAID FOR COMPLETING SURVEYS?  READ MY POST ABOUT PROLIFIC ACADEMIC HERE.

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GROWING YOUR NEST EGG: TOP TIPS FOR BEGINNER INVESTORS

A guest post by The Retired Broker, visit his blog here: http://theretiredbroker.com/

Please follow him here: https://twitter.com/retiredbroker

 

 

Thinking of investing some of your cash?  Below are some hints and tips to think about before making a decision.

 

Paying for Financial Advice

First, you have a choice of whether to take financial qualified advice regarding where to invest your money.  The key factor here is cost as you will be required to pay for this advice which could cost you 2% which means if you get a return of 2% in the first year you are back to square one!  There are a lot of websites out there that can provide you with generic information, it may be best to make the most of these if you decide not to seek qualified advice.

 

Investment Term

The length of time you want to invest depends on when you might require your money back.  The timescale of 5/10 years is regarded as medium to long term, anything less than this is considered short term.  Generally speaking, the shorter the term the less risk you should consider taking.

 

Risk

Broadly speaking, there are two places to put your money, deposit and investment.

Deposit accounts of all varieties while reassuringly boring you will know exactly where you will stand and how much you will get with this type of investment.  So for example say a fixed bond of 5 years with a fixed rate of 2.4% you will get a return on your investment of 2.4% which could either be paid annually or month.  However it may mean in ‘real terms’ it could be lower depending on inflation at the time.  The main point to make is that if the interest you are earning is less than inflation then the buying power of your savings will be reduced.

 

With investment there is no interest, instead you are taking the risk that over time the value of your investment will go up.  It can also go down and almost certainly will fluctuate in the middle.  Check to see if the advantages of an ISA are worth investing in.

There are good reasons to consider it, but the main decision you have is the underlying stocks and shares themselves. One that invests in blue chip UK shares is generally considered to be a lower risk than one that invests in the shares of India or China. The attraction of the higher risk option is the chance of a greater return over time, but the risk of greater loss is also there. When you invest a lump sum into a stocks and shares ISA, you buy “units” of that investment at the value they are on that day. If this is the route you are considering you may want to look at regular savings options. By “dripping” in your investment you can take advantage of “POUND COST AVERAGING” Here is an article that explains it.

 
Now let’s me take a step back. There have always been a few guidelines when considering investments:

 

Clear non- mortgage debt. If you have any non-mortgage debt, then the interest you are being charged will outweigh any returns you may get on your nest egg by far. Consider clearing this debt.

 

Emergency fund. An emergency fund should be sufficient to sustain your family if the main earner is unable to earn for six months.

 

Consider clearing mortgage debt. Paying off part of a mortgage will create a monthly saving which then can be used to drip into an investment if you wanted to. You need to play with the figures to see if that is a runner for you.

 

Make a will. Whatever you choose to do, making a Will most certainly will ensure your plans are likely to go on even if you don’t!

 

Review your life cover.  If you have a family, there would be costs on death so it’s an idea to spend some time thinking about the financial consequences, sort it out to your satisfaction, then forget about it for a few years and then review it again.

 

Look at pension provision. The pension market has changed beyond recognition over the last few years, but the tax relief still makes pension plans worth looking at.

 

Children’s future. Think about whether you want to put any savings in your children’s names directly.
 

Finally, spend some and have fun. None of us knows what’s around the corner and time is a vicious thief, banking a memory now will give a guaranteed return forever!

 

Happy Investing!

 

 

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HAPPY NEW TAX YEAR! THINGS TO CONSIDER

A guest post by @RetiredBroker

 

With only a few more sleeps until the start of the new tax year on the 6th April, I’m sure you are all busy arranging parties and sorting out family get-togethers. But while the emphasis will be all on the fun things like “Who will be the first to get a notice of coding” competitions, there is a serious side to the festivities. Taking a few moments to sit quietly and reflect on the true meaning of the New Tax Year season will be worthwhile, not only during this fun period, but throughout the year.

 

Here are a few things that you might want to consider.

 

Getting the annual “Notice of Coding” from the Inland Revenue is certainly one of the high spots of my year, and I’m sure I’m not alone! This brief little document tells you your tax code for the coming tax year, and from it your tax allowance, or the amount of money you are allowed to earn before having to pay income tax, is calculated. If you are employed, your employer will be told the code and it will be used to work out how much tax will be taken from your salary before leaving you with your “net” pay. It is important that this code has been applied correctly to you and is appropriate to your circumstances. If it is wrong you may pay too much tax, or even not enough! I’m sure you wouldn’t want that to happen! The government website has a whole section devoted to your Tax Code, and what to do if you think yours is wrong. As soon as you get your new code, check to see if it is right straightaway. Common reasons for it needing changing stem from quite mundane things usually, such as having more than one job. Find out more by clicking here .

 

A lot of benefits change at the beginning of a tax year, and it has often been said that navigating the benefits system is “a bit of a minefield”. There is no doubt that a lot of people miss out on money they could claim just because they are not aware of what they are entitled to. There are a number of ways of checking whether or not your circumstances entitle you to further financial help, one of which is this website.  Very straightforward to use, it takes you through a simple set of questions and then produces a set of results that will indicate whether or not you are entitled to a particular benefit. Half an hour spent on it quietly with a cuppa could prove quite valuable to you.

 

You may have read my blog about direct debits and know I think of them as a necessary evil and should be kept under constant review. The start of a new tax year is as good as time as any to go back over your bank statements and check that any direct debits are still valid and you are not continuing to pay a company for goods and services that you have long since stopped using or no longer need.  There is a Direct debit Guarantee which is intended to protect you against any problems you may encounter with them. Full details can be found here.

 

Make sure you are not paying any tax on your deposit savings if your taxable income is less than £17000., the interest is £1000 or less if you are a basic rate taxpayer or £500 if you are a higher rate taxpayer. The way interest on savings is taxed has changed considerably over the last few years resulting in most people not having to pay any tax on their savings. Again, at the risk of promoting how good the government websites are, I would suggest you take a quick look at their webpage on the Personal Savings Allowance, and make sure you understand what you are entitled to.

 

A final suggestion! Make sure all the various agencies you deal with such as the Inland Revenue and Benefits offices have up to date contact details for you. If you have moved, got a new email address or changed your phone number then it’s a lot easier for everyone if the people you want to deal with know about it.

 

I wish you a happy and prosperous New tax year!!

 

RetiredBroker

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7 SMART AND EASY WAYS TO SAVE MONEY ON YOUR GROCERY SHOP

 

 

We’ve all read it in newspapers or heard it on the TV, the cost of groceries is expected to rise – whether this is inflation or the effects of Brexit is neither here nor there, the fact is that families will continue to struggle to make ends meet.

 

So, if you want some tips on how to cut your grocery bill down, then you have come to the right place!  Your food bill is an area where you can make savings just with a little planning.

 

Below I have noted some ways to help you the next time you go food shopping.

 

Plan, Plan & Plan

Before heading out the door, I recommend you plan your meals and what you need to buy.  Meal planning can help in so many ways, including saving you money and time overall.  It also helps you cut down on waste and can turn what becomes a boring dinner into a lovely feast!

 

If you want to read more about how to meal plan, head over to my post How to Save Money with Meal Planning.

 

Make a Shopping List

Make a shopping list from the meal plan AFTER looking in your fridge, freezer, and store cupboard.  Going without a list can lead to many temptations and spending more than you wanted.  It doesn’t have to be anything fancy, the back of an envelope will do just fine!

 

Use coupons and cashback apps

Cashback apps and vouchers are a great way of reducing your overall grocery shopping.  You can get many free items too when shopping with coupons and cashback apps.  Head over to my blog post about the best Cashback apps which you can download now and start saving immediately.

 

Know where the reduced section is

Supermarkets reduce food these are often items that have best before the day you are shopping.  If you buy bread at a reduced price it’s a good idea to freeze it if you don’t intend using it all.  You really can get some excellent bargains. Why not visit your local supermarket and see where they keep the reduced section?

 

Look at the top and bottom of the shelves

The higher profit items are often placed at eye level – make sure you look to the top and bottom of the shelf and label to make sure you get the best priced item.

 

Loyalty Cards

If your store has a loyalty card, make sure you sign up for one as you can get a discount or money off coupon from the till.

 

Pay with Cash

After you do your planning, bring cash along – that way you certainly won’t overspend. Having a debit or credit card can often be tempting so leave it at home.

 

Happy grocery shopping folks.

 

Elf x

 

 

THINGS YOU CAN DO OR SELL TO MAKE EXTRA CASH

HOW TO EARN CASHBACK FROM SHOPPING ONLINE

MAKING EASY MONEY WITH SURVEY SITES

EARN EXTRA MONEY FROM CLICKWORKER

WANT TO MAKE MONEY WITH YOUR OLD RECEIPTS?  READ ALL ABOUT IT HERE.

WANT TO EARN GIFT VOUCHERS?  READ MY REVIEW OF SWAGBUCKS.  

INTERESTED IN KNOWING WHAT A VIRTUAL ASSISTANT DOES AND HOW YOU CAN MAKE MONEY?  READ MORE HERE.  

WANT TO GET PAID FOR COMPLETING SURVEYS?  READ MY POST ABOUT PROLIFIC ACADEMIC HERE.

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5 TIPS TO HELP YOU CREATE A BUDGET

 

A recent survey by CIPD (Chartered Institute of Personnel and Development) and Close Brothers Asset Management found that 25% of workers reported money worries had affected their performance at work and feeling tired at work because of sleep loss was the most common way in which fretting about money affected job performance.

Families can find themselves carrying a lot of stress related to finances, having to juggle debt, mortgage, loans and day to day finances.

I believe it is extremely important to work to a budget, while it may seem a bit boring it is something that we should all do to take control of our finances and our life, it will also hopefully help you reduce the amount of stress you are under and at the same time allow you to consider reaching your financial dreams.

So how do you budget?  Below are my top tips on setting your own.

 

Focus

 We all have dreams for the future to gain control of your financial future start by writing down your financial goals.  This is a great way to allow you to visualise the goal.

 

Track your income and expenditure

To get a handle on your finances it is important to list your income and expenditure.  Below you will find an income and expenditure tracking form, download it today to help you.

 

First step is to know your actual income from your salary, benefits, child benefit etc.  Once you have this information you can then move on to your expenditure.

 

Note down your bills and whatever other monthly expenses you have including those trips to the coffee shop or the times you nip in for a pint of milk but end up spending over £20!  Check all you statements, your receipts and itemise them to understand where your money is going.

 

Once you have this detailed information you can create a realistic budget to help you keep track of your monthly budget.

 

Ways of cutting down

Once you establish your true income and true expenditure have a look and see if there are ways you want to cut down so you can start saving.  It may seem a daunting task but break it down in to manageable chunks.

 

Some tips I recommend is to consider re-negotiating your current services such as mobile, home insurance, broadband and cable TV services with your current providers.  However, before calling them visit a cost comparison site such as Go Compare and see if you can get better deals by getting a quote for each of the services.

 

With this key information to hand contact your current providers and ask them what kind of discount they could give you.  Pass on the deals you have found on the cost comparison website.  More times than not, they will offer you a discount.

 

Personally, I have saved hundreds doing this – I know you can too.

 

Do you have spending leaks?

Once you have established your income and expenditure and decided to get better deals on your household bills, the next stage is to sit down and assess what else you currently spend your money on.  You need to be honest with yourself.

 

Ask yourself the following questions: Why am I spending money on this item? Do I want or need this item? Is it worth that much? Is this purchase trying to make up for some area of my life that is lacking? Is there a less expensive alternative to what I want to buy? If so, why am I not willing to buy the less expensive alternative? What else do I want or need that this money could be used for?

 

Give your answers some thought. If you want to stop these spending habits then put strategies in place to deal with them such as setting a savings target for a holiday.

 

Whatever you decide to do, I recommend you keep your diary close and keep a spending diary so you know exactly where you spend your money.

 

Consider increasing your income

It’s not just about cutting back it is also about increasing your income.  There are many ways to do that.

 

Head over to the following blog posts to read more on extra ways to make money:

 

THINGS YOU CAN DO OR SELL TO MAKE EXTRA CASH

HOW TO EARN CASHBACK FROM SHOPPING ONLINE

MAKING EASY MONEY WITH SURVEY SITES

EARN EXTRA MONEY FROM CLICKWORKER

WANT TO MAKE MONEY WITH YOUR OLD RECEIPTS?  READ ALL ABOUT IT HERE.

WANT TO EARN GIFT VOUCHERS?  READ MY REVIEW OF SWAGBUCKS.  

INTERESTED IN KNOWING WHAT A VIRTUAL ASSISTANT DOES AND HOW YOU CAN MAKE MONEY?  READ MORE HERE.  

WANT TO GET PAID FOR COMPLETING SURVEYS?  READ MY POST ABOUT PROLIFIC ACADEMIC HERE.

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6 WAYS TO TREAT YOUR MUM WITHOUT BREAKING THE BANK

I love my mum dearly and being a mum is the most rewarding and challenging job in the world.  While I often shy away from imposed ‘days’ by the card industry I often still do something special for my mum.

 

If you would like to treat your mum this Mother’s Day without breaking the bank or making that gift more personal, then this blog post is for you!

 

Below I’ve listed some extra special ways to treat your mum.

 

 

Make a photo album

 

In today’s smart phone era most of us look at our photos online, but I must admit there is something special about flicking through a photo album that contain some precious memories.  Why not gather these up and make a family photo album?  You could also spend some quality time together going through them.  A great place to upload your photos to is Photo Box who at the moment are also offering up to 40% off Mother’s Day gifts!

 

 

Give your mum a break

 

Without a doubt being a mum is often a 24/7 job which can be both physically and mentally challenging.  Why not give your mum a break by doing her chores for the day?  You could start by cleaning her house or doing her washing or ironing.  You don’t even have to tell her, surprise her when she’s out!

 

 

Afternoon tea

 

Busy mums often find it hard getting the time to sit down and relax with a cuppa and chat to friends.  Why not organise for your mum’s friends to come around and make them all afternoon tea?  You could either bake some delicious cakes or buy them from the local supermarket, serve them on vintage china and cake stands to make it extra special.

 

 

Cook her favourite meal

 

Mums can be busy preparing family meals, pack lunches or snacks.  Having someone cook a meal is such a treat.  Why not prepare your mum’s favourite meal, you can all sit down as a family and enjoy each other’s company?  If you wanted to be a little more adventurous why not try the likes of Gousto who will provide you with all the necessary ingredients to make a special meal?

 

 

 

Flowers & Chocolates

 

Always appreciated by mums everywhere, you could order flowers from the likes of Marks and Spencer with the offer they have on at the moment where you order flowers and get free chocolates!  You could also order a wonderful selection of chocolates from Thorntons.

 

 

Mum coupon book / vouchers

 

Well, it wouldn’t be right not to include vouchers somewhere in this post!  I absolutely adore this post on Mashable, it contains 10 Mother’s Day vouchers from things like One ‘Get out of House Free’ card, Breakfast in bed and permission to criticise my haircut for one minute!

 

 

Hopefully this post will have inspired you for this Mother’s Day, although my advice is not to wait to Mother’s Day to show how much you appreciate your mum!

 

Happy Mother’s Day.

 

Elf x

 

 

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WANT TO KNOW HOW TO SET UP A BLOG TO MAKE MONEY IN 3 EASY STEPS?  VIEW THE POST HERE.

INTERESTED IN KNOWING HOW TO MONETIZE YOUR BLOG?  READ MY BLOG POST HERE.

WANT STUFF FOR FREE TO REVIEW ON YOUR BLOG?  READ MY POST HERE.

WANT TO MAKE MONEY WITH YOUR OLD RECEIPTS?  READ ALL ABOUT IT HERE.

WANT TO EARN GIFT VOUCHERS?  READ MY REVIEW OF SWAGBUCKS.  

INTERESTED IN KNOWING WHAT A VIRTUAL ASSISTANT DOES AND HOW YOU CAN MAKE MONEY?  READ MORE HERE.  

WANT TO GET PAID FOR COMPLETING SURVEYS?  READ MY POST ABOUT PROLIFIC ACADEMIC HERE.



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SIX TRICKS SUPERMARKETS USE TO MAKE YOU SPEND MORE

 

 

You get to the supermarket checkout and you begin to wonder how one earth a trip for milk and a loaf of bread turned in to a £20 purchase!  If that’s you then read on because it happens all the time and it often has nothing to do with willpower – more like soft manipulation to get you to spend.

 

Supermarkets have years of incredible marketing expertise which they take full advantage of to get you to turn a one item purchase in to a many item purchases.  Of course, these marketing ‘tricks’ have been around for years but if you are on a budget or want to cut down on your grocery shop to save up for a holiday then it’s best to arm yourself with the knowledge to recognise what is happening and avoid falling in to the trap of spending more of your hard-earned cash than you wanted.

 

Below are some of the tricks supermarkets use to convince you to spend more…

 

Floral and Fresh Baked Goods

There are two smells that always welcome you in to a supermarket, one is freshly cut flowers, the other is freshly baked goods.  The look and smell is just wonderful, in fact they may even put a smile on your face with such a sensory overload.  The reason they are there?  These goods are often the highest price margin for the supermarket, put here when you enter as the smell often activates your salivary glands which in turn is more likely to make you impulse buy!

 

Essentials are hidden

Remember that pint of milk and bread you went in for?  Well, it is often hidden near the back or end of the store.  The reason for this is that the supermarket want you to walk through the whole store just to get them –tempting you to buy other items on offer as you make your way to the item you came in for.

 

Healthy versus junk

Fresh fruit and vegetables are often at the start of your shop.  The reason for this is that if you purchase these items at the start then you won’t feel as bad when you come to the junk food, so you will feel just fine purchasing biscuits because this balances with the fruit and vegetables you bought earlier.

 

Aisles

I don’t know about you but I find myself blindly walking up and down the aisles without deviating at all.  The supermarket counts on us doing this, which is why they often change where products are located – again to make us walk round more of the store to tempt us to buy.  The higher profit items are often placed at eye level – how often have you searched for a supermarket own brand of cereal only to find it at the bottom, hidden behind a pillar?  Now you know the reason for this.

 

Another one to watch out for in the aisles is the kid’s eye level.  Yes, they strategically place products aimed at kids at their level so they will often pester parents to buy them.

 

Music

In October (not close enough to Christmas yet) it gets on my nerves the Christmas music you hear in stores but supermarkets often play music, but have you noticed how slow it is?  The idea is that slow music makes you take your time wandering round the store, viewing more products, and ultimately buying more.  Research has also shown that playing classical music can lead people to buy more expensive items.

 

Loyalty Cards

While I love loyalty cards, I know deep down that the store is probably benefiting more than I am but who can resist a discount or money off?  So, while a loyalty card will give you money off the main reason a supermarket wants you to use it is so they can track your spending habits and learn more about what you buy and when.  Have you noticed that at times the till will spout out a money off voucher for toothpaste when you’re about to run out?  Well now you know how they keep you coming back to buy toothpaste!

 

 

So, know you know why a visit to the supermarket for milk and bread can turn in to a major shop.  If you want to avoid these manipulation traps you can try some of the following:

 

  • Pay with cash – just bring along a few pounds, that way you certainly won’t overspend. Having a debit or credit card can often be tempting so leave it at home.
  • Never shop on an empty stomach. When you’re hungry you will be tempted to buy all around you from savoury to sweet – try to avoid grocery shopping when hungry.
  • Write a list. Lists are great if you stick to it.  The more you work with the list system the easier it will become to avoid the tricks of supermarkets.

 

I hope that now you are armed with the knowledge and skills you can avoid supermarkets manipulating you in order to spend more than you had ever intended.

 

Happy grocery shopping.

 

Elf x

 

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