FOOL'S EYE VIEW
Ten Ways To Fatten Your Wallet!

By Cliff D'Arcy
October 6, 2005

As my editor is always complaining (quite rightly) that my articles are too wordy, I'm going to try to write this piece using no more than 1,500 words. Off we go!

"The best things in life are free,
But you can give them to the birds and bees,
Now gimme money, that's what I want"

Money (That's What I Want), The Beatles

It's often said that "money makes the world go round", but if this is true, why do we spend so little time managing our finances? I reckon that, say, twenty minutes or so each week is enough to keep tabs on your money and, what's more, this time is incredibly valuable, because it makes you richer. Here are ten tips to help you to make more money with very little effort:

When you borrow

Avoid interest with a 0% credit card

UK cardholders owe more than £56 billion on credit cards, with around three-quarters (75%) of this debt attracting interest. At an average annual interest rate of, say, 16%, this means that we're paying interest of more than £560 million a month to credit-card firms. Ouch!

With 25 million households in the UK, this mountain of plastic debt comes to about £2,250 per household. The good news is that you could save around £360 a year, and repay your debt much faster, by switching a balance of this size to a 0% credit card. These darlings don't charge any interest on transferred debts for an introductory period of up to a year, which is nice! Learn how to become a 0% rate tart in Beware Of These 0% Card Traps.

Check out the delicious deck of 0% cards in our Credit Card centre!

Look online for a cheap personal loan

If you need a loan to pay for a car, holiday, home improvements, wedding and so on, don't go for a walk down the high street. If you do, expect to be mugged - by your bank! The truth is that the personal loans you find on the high street are often hugely overpriced. Again, this is an area where you can get the Internet to do the work for you. If you want a Best Buy personal loan, shop around online, but read Five Tips To Choose A Loan before you do.

We have the UK's cheapest loan in our Personal Loan centre!

Move your mortgage for a lower rate

According to a survey conducted earlier this year, half of all mortgage borrowers have never switched mortgage lender. Furthermore, over two out of five homeowners (41%) say that they'll never switch. Aaargh!

This is crazy, because the average mortgage balance has risen to over £81,000, which means an annual interest bill of almost £4,500 at an average rate of 5½%. Shopping around for a lower rate - either from your lender or one of its rivals - could knock £1,500 off this bill, which would mean £125 a month more in your pocket. But watch out for sneaky tricks; see Three Miserable Mortgage Rip-offs!

Check out the handsome home loans in our Mortgage centre!

When you spend

Earn as you shop: use a cashback card

Although I must have around a dozen (mostly dormant) credit-card accounts, I buy everything on a single card. Also, my wife is an additional cardholder on this account, so she does the same. I bet you're thinking that my monthly bill must be pretty hefty - and it often is - but this doesn't worry me, because I'm earning as I'm spending. That's because I use a cashback credit card which pays me an annual reward of up to 2% of all my spending. Since July, I've earned almost £50 just by handing over my Morgan Stanley Cashback card. You can learn more about cashback cards here.

Check out the cashback plastic in our Credit Card centre!

Save a packet with price-comparison websites

As I explained in Save A Fortune When You Spend, I love using price-comparison websites. These do the shopping around for you, so you can find great discounts without even leaving your comfy chair. For example, I'd never pay, say, £23 for a new DVD when I could find it for, say, £9 or less by shopping around online. The same goes for books, CDs, electrical goods and so on - it's a doddle to get big discounts by buying from online retailers.

Pay less by learning to haggle

I never see a ticket price as the price that I'm willing to pay. In fact, I see it a challenge, with my goal being to get as much off the marked price as I can. Although I suppose haggling might be a bit tougher in, say, Harrods or an Aston Martin dealership, I'm willing to give it a try anywhere. Indeed, in a recent issue of Reader's Digest, I explained how I secured more than a third off a table because it was slightly scratched. When I asked for a discount, the manager of the furniture department said to me, "We don't normally do this, sir", to which I replied, "You may not, but I do"!

Learn how to bargain in The Best Ways To Pay Less and How To Haggle - And Save A Fortune!

When you save and invest

Don't pay tax on your savings interest

As I explained in Five Steps To Smarter Saving, you don't have to pay tax on your savings. No, you don't have to move them to a secret numbered Swiss bank account; all you need to do is open a cash mini-ISA each year. Don't be frightened off by the fancy name, because cash mini-ISAs are simply tax-free savings accounts. If you are saving up to £3,000 each tax year (they run from 6 April one year to 5 April the next), put your money into a cash mini-ISA and, quite legally, dodge tax!

This ISA pays 5% AER tax free!

Keep an eye on your savings rate

A few years ago, a friend of mine mentioned that he had about £45,000 in his savings account. I did a quick mental calculation and suggested that, at 4% a year after tax, he should be earning about £150 a month. However, it turned out that he was being paid a tiny fraction of this amount - about £3 a month, in fact. That's because his sneaky bank had slashed the rate on his so-called "high interest" account to a pathetic 0.1% a year - and that was before tax!

Don't make the same mistake as my chum: don't trust your bank and always keep a close eye on your savings rate. Be prepared to move your money at the drop of a hat if your bank does the dirty on you!

Earn up to 5.25% a year before tax in our Savings centre!

Beware of high-charging investments

I'm a huge critic of high-charging investments and "savings plans", because even small differences in charges make for big differences in the long run.

For example, let's take two investment vehicles, identical in every way apart from their charges. The first charges, say, 0.5% a year, and the second, 2% a year. Let's assume that these funds return, say, 10% a year before charges, and that they are both in tax-free shelters, such as shares ISAs.

So, the first fund returns 9.5% a year after charges, and the second, 8%. Let's look at how a pot of, say, £7,000 (conveniently, the annual limit for a shares maxi-ISA) grows over time in each fund:

Timescale	Fund value (£) at 9.5% a year	Fund value (£) at 8% a year	Difference (£)
5 years	11,020	10,285	734
10 years	17,347	15,112	2,235
20 years	42,991	32,627	10,364
40 years	264,036	152,072	111,964

Choosing the cheaper fund would, over forty years, mean almost £112,000 more in your pocket. So you can see why I invest in cheap, simple, flexible tracker funds. Learn more about these low-cost rides on the stock market in Let The Tracker Wars Begin!

You'll find the UK's largest index-tracking fund in our Index Tracker centre!

THE GOLDEN RULE: shop around!

In this age of instant gratification, conspicuous consumption and what I call the "desire to acquire", it's very hard to take a deep breath and pause for thought before rushing to buy something. However, always remember that convenience costs, whereas shopping around always pays off handsomely, especially if it puts you off buying something altogether!

Good luck with fattening your wallet or purse!

More: Check out the great products in our Credit Card, Personal Loan, Mortgage, Cash Mini-ISA, Savings and Index Tracker centres!