FOOL'S EYE VIEW
Become A Money Black Belt

By Cliff D'Arcy
March 18, 2003

Financial services is one of Britain's largest service industries, employing hundreds of thousands of people and accounting for more than a quarter of the UK's output. However, the problem is, for your typical Brit, this expansion means that money matters have become far too complicated to follow.

There are so many financial products around these days, it's a wonder that we're able to make up our minds and actually buy something! For example, there are hundreds of different mortgage lenders advertising over 7,000 different UK mortgages! Also, when it comes to credit cards, I found over 300 different cards on offer in a brief search of the Internet.

So, on one hand, this range of choice is baffling and bewildering but, on the other, it gives Foolish consumers real buying power. Thanks to cut-throat competition among banks, building societies, insurers and other financial firms, there are some fantastic value-for-money deals to be found out there.

So, is it really possible to bring all your finances together in an at-a-glance guide to the health of your wealth? Well, we're going to give it our best shot. The key thing you need to remember is "BLIMPS", which is a keyword that you can use to monitor your finances. I suggested it in this article as an abbreviation for the most common financial services we buy.

If you want to become a money black belt, who always gets the best deals and service, grab a piece of A4 paper. Write the headings below on it, note down (or guesstimate) your current deals, then get hunting for better deals and improved service using the links provided!

It's possible to save £2,000 or more a year using this simple technique, so what's holding you up? (Incidentally, if you'd like to volunteer to use the BLIMPS checklist to give your finances a workout, use the "Have Your Say" link below.)

B: Banking, borrowing and bills

The chances are you've got a bank account with one of the Big Four high street banks. If so, you're paying far too much when you're overdrawn and probably earning a pitiful 0.1% interest when you're in credit. We show you some of the best deals – by branch, telephone or online – here. Make a note of the rates you're paying, then switch and save - it's the easiest it's ever been. If you're not bothered about using high street branches, try our Online Banking Centre.

The interest rates on unsecured personal loans have never been lower, with several lenders offering APRs under 7%. Read more here about how to replace expensive debts with a cheap unsecured loan and visit our Personal Loan Centre.

Do you know the interest rates on your credit and store cards? I'm willing to bet you're charged between 12% and 30% interest per year if you don't pay off your balances in full every month – eek! Why put up with inflated interest rates when there are dozens of card issuers offering 0% deals for up to ten months on balance transfers? Read Switch To Interest-Free Cards and pop into our Credit Card Centre for more details.

There's nothing like paying less and getting more. If you've never switched fuel providers, you're guaranteed to be paying way over the odds for your gas and electricity. Read how easy it is to Slash Your Household Bills and then visit uSwitch to see how much you could save simply by signing a couple of forms (you don't even need your toolbox).

L: Life assurance

This is really important if you have a spouse or children - that goes for both men and women. I recently had a very touching e-mail from an unfortunate Fool whose wife died tragically young. Although he was well insured, his late wife wasn't - don't let this happen to you. Check out our guides to term assurance and mortgage protection and get a quote here. The cost of life cover has fallen so far that you could find that any existing policies now look expensive.

I'll also briefly mention endowments: inflexible, high charges and poor investment performance. Give them a miss. If you already have one, read Tackling Failing Endowments and How To Survive Battered Bonuses.

I: Investments and pensions

A shares ISA (Individual Savings Account) is one of the few remaining tax-free ways to invest long term in the stock market (either with lump sums or monthly savings). Read To ISA Or Not To ISA for the Foolish low-down. If you're aiming to save £7,000 a year or less and can leave your money untouched for at least five years, ISAs should be right up your street. Even if you already have an ISA, it's easy to save money by transferring to a low-cost manager. Figure out your options at our ISA Centre.

Pensions are a hot topic at the moment. We're all going to have to save a lot more if we want decent standards of living when we retire. Read What Everyone Must Know About Pensions and visit our Pension Centre.

M: Mortgages and housing

Two-thirds of us own our homes and about 11.5 million of us have a mortgage. We pay about £3 billion a month in mortgage interest alone (!!!), so shopping around for a better deal pays you BIG bucks. Check out Make The Most Of Your Mortgage and visit our 21st Century Mortgage Centre.

P: Protection

I'm talking about insurance, not condoms, although both offer essential cover and help with family planning!

You can save a fortune by shopping around for home, motor, payment protection, critical illness, income protection and travel insurance. Read Keeping Down The Cost Of Motoring and Following A Simple Financial Diet, then visit our Insurance Centre.

S: Savings

If you're planning to save up to £3,000 a year and don't want any risks to your capital, a cash mini-ISA is probably your best bet. Read A Safe Haven For Your Cash to learn how to get market-beating rates of interest without paying tax and then visit our Cash ISA Centre.

> Learn how to save here and find out about saving for children here.

> Fairer Fools should take a look at A Money Makeover For Women, a Foolish seminar on female financial fitness.