|analytical Q||May-Aug 2000||Sept-Dec 2000||Contact||Discussion|
MONEY, MONEY, MONEY
The most useful thing I ever learned about managing my finances was doing a cashflow analysis. I showed the technique to my sister and then my brother when they were attending university. As long as you have more coming in than going out, you're safe, I said to them.
My father taught us to save very early on. He would collect money from us at regular intervals and pooled them into a big account so that we would all get higher interest. This was fine until the dollar depreciated drastically against the yen (from 360 to 100 yen to the dollar). Foreign exchange risk hit us in the face.
Now that we're adults, we all manage our own finances individually. I'm conscious of my foreign exchange exposure when I travel. I'm also conscious of the negative effects of inflation. In this country, the taxman is also in the game.
Positive cashflow is not good enough. The in and outflows should be regular and of predictable amounts. Regularity, I learned this year, provides certainty which gives comfort and security. It's nice, however, to have a lot more than what you need.
The habit from my student days of balancing my chequebook and checking my receipts against my credit card bill is hard to break. Even my household bills I have to check after the electricity supplier misread my meter and quadrupled my monthly bill. In an ideal world, I should be able to trust everybody and not have to check. Everything would be debited automatically from my current account.
The money sections of major newspapers are always featuring web sites that contain useful advice. I pulled a few here for later reference.
Useful money web sites (UK):
Interactive Investors: first stop for many UK online investors, includes an active discussion forum
Pro-Share: non-profit starting point for information about share clubs. Good advice for the beginner.
Money Net: an independent overview of the personal finance sector
Tip Sheets: tips for the small investor, regulated by the Personal Investment Authority
UK Sharenet: provides access to resources to gather information on the London Stock Market
Read Dave Reed: inside track on foreign exchange markets
Trust Net: free, updated daily charts and detailed background information on all UK unit and investment trusts
UK Motley Fool: respected message boards
This Is Money: personal finance site run by the Daily Mail
Money Gator: instant comparisons of mortgages, credit cards and loans
Hemscott: comprehensive site for the active UK traders
Mrs Cohen: lively set et up by personal finance pundit Bernice Cohen
Metro Net: charting UK shares
UK Invest: local arm of worldwide personal finance network