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FOOL'S EYE VIEW
The Lazy Fool's Guide To Easy Money

By Cliff D'Arcy
November 3, 2004

I moved house last week, which was a painful process in more ways than one!

One thing that certainly made the process a great deal worse is my habit of hoarding paperwork, especially financial rubbish. Before I started a family, I devoted a lot more time to managing my finances. In fact, in the days when I had more free time, I would spend several hours a week overseeing my money matters. Sad but true!

However, all this has to change, as I now have two children, less time and a lot more responsibility. So, I've decided to streamline my finances in order to minimise both hassles and paperwork.

[Deep breath] I confess that, at the moment, I have:

  • sixteen credit card accounts (I use one card for all my shopping; the others are mostly dormant or active 0% cards), plus another two 0% cards on the way;
  • several savings and tax-free cash mini-ISA accounts;
  • 'mislaid' share certificates all over my house;
  • a share-dealing account and several shares ISAs;
  • savings accounts for my children;
  • several 'preserved' pensions from ex-employers, plus an ongoing low-cost Stakeholder pension;
  • various insurance policies covering myself, my home and possessions (but I don't own or drive a car);
  • a mortgage that will be repaid after my home is sold, plus an under-performing endowment;
  • utilities bills galore; and
  • no personal loans, overdrafts or other debts, thank goodness!

In total, there are around fifty financial products that I need to watch over to some degree. What's more, they generate a huge amount of paperwork, in the form of monthly or annual statements, junk mail and "special offers". Just filing all the bumf is a full-time job!

So, I've decided to sort out my life by introducing a 'light touch' approach to my finances. I'm going to find some high-quality products and stick to them – until they fail my occasional Best Buy checks. Here's what I'm planning:

Bank account

It's about time that my wife and I had a genuine joint account. We have a joint account into which my income is paid, but my wife's salary goes into her own sole account. What we're looking for is a bank account that has no charges for everyday transactions, plus a high interest rate on credit balances. We're not too worried about overdraft fees and interest, because we should rarely slip into the red, but a no-fee overdraft with a decent limit might be a useful safety net.

A glance at the November issue of financial magazine Moneyfacts throws up these deals:

Best Buy
bank accounts
Bank Account name AER (%) Minimum
monthly
funding (£)
Alliance & Leicester Premier Plus Current 5.50* 1,000

Citibank
(Apply via the Fool)

 Direct Current 4.59 Nil
Cahoot
(Apply via the Fool)		 Current
(automatic £250
interest-free overdraft) 		4.25
with
chequebook		 Nil
Lloyds TSB
(Apply via the Fool)		 Classic Plus 4.00** 2,000

* on first £2,500; 0.1% on excess balance over £2,500.
** on first £5,000; 0.1% on excess balance over £5,000.

The A&L account is the clear leader, but our combined monthly income is larger than the £2,500 limit for the high interest rate, plus we get paid at roughly the same time, so we'd lose a little interest with this account. I'm drawn to Lloyds TSB's account, as its nearest branch is just minutes from our new home, plus we get £30 cashback, which gets us off to a good start.

Find a better account in our Online Banking centre.

Savings account

I have small sums of money in a few bog-standard savings accounts, plus larger sums in tax-free cash mini-ISAs. I'm going to transfer the small pots into one of these top-paying no-notice accounts:

Best Buy
no-notice accounts
Company

Account name

Minimum
deposit (£)

Gross
rate (%)

AER (%)

Bradford & Bingley

 eSavings

1,000

5.50*

5.37

Egg
(Apply via the Fool)

Internet Savings

 1

5.50*

 5.12
Northern Rock Tracker Online 1 5.41* 5.05
The AA Telephone Savings 500 5.36* 5.36
Alliance & Leicester
(Apply via the Fool)		 Online Saver 1 5.35 5.35

And, of course, being online accounts, these will help keep the dreaded paper mountain under control! As for my cash mini-ISAs, I'm going to transfer them to one of these three Best Buys.

Search for a superior account in our Savings centre.

Credit card

A few years on the Foolish straight and narrow has made me determined never to be in debt ever again. In fact, in September, I paid cash for my wife's nearly new car - and I hope to buy my next home outright, too. So, I prefer not to borrow money, but I do make full use of 0% cards. Having weaned myself off this addiction earlier this year, I've gone down this slippery slope again, applying for two new 0% cards. But I'm going to do my best to rein in my 'super tarting', as it takes quite a bit of time to administer.

Anyway, I'm looking for a credit card for shopping that either pays me great cashback as I spend, or gives me a long 0% introductory period on new purchases. Sainsbury's Bank offers 0% on purchases for a year, which is tempting. As for cashback cards, the American Express Blue card pays 2% for three months and 1% thereafter (although there are variations of this offer), and the Morgan Stanley Cashback Bonus card pays 1% on your first £2,000 of annual spending and 0.5% thereafter (apply via the Fool).

I shall clean up my plastic mess and then settle down in a meaningful relationship with a single card, honest [fingers crossed]!

Check out the fantastic plastic in our Credit Card centre.

Everything on one page

Although my financial life is wildly over-complicated, I've come up with a simple solution: I've signed up to an account aggregation service. This free online service enables me to view a snapshot of most of my financial accounts on a single page, and sign on to each account with a single click.

My aggregator account only took a few minutes to set up as, being a mathematician, I find it easy to remember all my account details, passwords and PINs. Anorak alert! So, from now on, I don't have to key in a different password for each account, which is a relief. I love this service because I only have to log in once to get a better overall picture of my finances.

Several companies offer account aggregation, often called "My Accounts", including Blue Yonder, Citibank, Egg Money Manager, First Direct, Moneynet, Moneysupermarket, Supanet, Telegraph, ThisIsMoney and Yahoo. Some even allow you to add reward and loyalty cards, utility companies, even offline assets, such as your estimate of the equity in your home!

Some organisations have raised concerns about the security of these systems, given the increased risk of fraud. For example, here are some cautionary words from the Financial Services Authority, which cannot regulate these services. However, my aggregator uses 'client side service', which means that all my confidential information is scrambled and stored on my PC in a 'digital safe', so I'm not worried about anyone hacking into my accounts. What's more, my provider offers an unlimited fraud guarantee, which provides some reassurance.

Now all I need to do is safely dispose of my paper mountain and then I can relax!

More: Visit our Banking, Savings and Credit Card centres.