Are cash ISAs worth it? And other conundrums.

Spring is here, Skint pals!

Well in Glasgow anyway; suddenly, gloriously.  It has gone from driving rain to daffodils and if I’m feeling particularly chipper it’s because I’m looking ahead to the Skint Garden Makeover, later this month, which I hope will deliver a magical transformation of our titchy city space.  

This time last month we still weren’t sure if it would go ahead – a mix of doubts over budgets and being let down by a tradesman. But it’s full steam ahead now and – all going well – we’ll be enjoying  an evening G&T in it by Easter. 

With garden saving in mind you may remember that I opted to take a little Budget Challenge in February, using it as an opportunity to get my finances in shape. I identified four areas where I hoped to shave money off of my monthly spend and promised I’d report back saying what I’d done, so here’s the results pals:

woman on phone - finance makeover

The very first text message?

 

    • First up: sort out my savings accounts. These were in a shocking state. Because interest is so low, returns aren’t good generally, and because of that I’d let things slide to the point where an ISA was generating £3 a year. Rubbish! That’s less than the going rate for the Tooth Fairy these day. So I took a morning to search for better rates – such as they are.  An ISA was due to revert from a decent to a rubbish rate on February 27th and I managed to give my provider a call just in the nick of time to switch to a better deal. If I hadn’t made the call I’d have been looking at a shift to a 0.1% rate – as it is I’ve got . .  wait for it . . 1%! Well, hallelujah, huh? That’s surely going to pay for the garden makeover! The only upside of such rotten cash ISA rates is to strengthen my resolve not to bother with them at all in this tax year. Whilst I know a lot of people believe in maxing out their ISA allowance each year – both cash and stocks and shares – I personally see little point in cash ISAs whilst interest rates are so low. The best one I’ve found this year so far offers only 1.75% (Stafford Railway Building Society)  – not enough to lure me in. Any money I’ve got spare to put away I’m putting into a Stocks and Shares ISA, then letting it sit there for as long as I possibly can.

 

  •  Switch home insurance. At first I though this was going to be an easy one. With my home insurance due for renewal I did a quote comparison and was delighted to find that our current insurer, Swinton, actually came out pretty much on top. With little difference, (about £12),  between the renewal rate from our current insurer (£352), and the best rate from the price comparison site, it made sense for me to take the path of least resistance stick with Swinton. So, I phoned them to renew. I also wanted to remind them that we’d added an extra bedroom this year, following some work on the loft. ‘Right,’ I’ll just have to put you on hold,’ the woman told me. A few minutes later she came back .’Um, having the extra bedroom takes your quote up to £456.’  Whaaaa? £100 a year for an extra bedroom? Don’t think so. The price comparison site quote was for  way less, and was based on a four-bedroom house – so I got my haggling head on, Skint pals, and told her that I’d be moving insurer. Cue some umming and aahing, then me being popped on hold again. Ten minutes later she came back .’Right then, the best we can do is £356.’ Done! That’s £100, just for asking. I’m zealous about always asking for discounts on insurance, utilities, phone deals etc: inspired by Martin Lewis’ classic article about saving £1000 from one day of work on your finances. Boy, it’s worth it. In this case, hanging on the phone for ten minutes saved me £100.

 

  • Nix the money-eaters. All of those pesky little budget-suckers that eat up a good £50 a month if not more – these were on my list to blitz in February. But, umm, I didn’t. Magazine subscriptions, snacks on the go, buying too many newspapers – I’ve been putting this one off. Perhaps I don’t really want to give up these little pleasures.  And happily I found justification in my decision, when US blogger ,the Dough Roller carried a post this week about how saving money on lattes will never cut the mustard when it comes to getting yourself rich. Phew, that’s what I love – a new financial theory that gets me off the hook and lets me carry on enjoying my coffee . . .

 

  • Update the Skint monthly budget. I vowed to shave money off other monthly spends and I can report only partial progress on this one, folks. I’m in the middle of the Kafka-esque hell that is switching home phone and broadband provider – this will save me some cash, though may cost me my sanity, as it’s providing only slightly less complicated than running the FTSE. After this is sorted I’m turning my attentions fully to ISAs before the tax year ends on April 5.

Skint pals, do you still think cash ISAs are worth investing in? Are you loyal to them, no matter the rates, or will you, like me, be finding other ways to stash any spare cash this year?

 Skint x

Photo credit: Amoreux Vintage

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About Skint in the City

Skint in the City provides stylish, practical tips and advice on how to live the high life on a shoestring budget.

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