Is it safe to keep money at home?
We have always heard that cash is king. But while there may be some truth in this saying, keeping all our savings at home may no longer be the best option.
Ever since currency was invented, the prevailing thinking in our society has been that more money is better. The accumulation of notes and coins has been a constant throughout history. People saved in case of bad times, they saved money in good times to be able to use it in bad times, in case they needed the money for an emergency or simply to ensure a better future for their children. Obviously not everyone has been lucky enough to be able to afford to set aside a significant amount of their money on a regular basis, but many people have had small savings tucked away in a bedside table, in a hidden safe, or, although it may seem a cliché from another time, under the mattress.
Security, the reason for the change in habits
Over time, the amount of money kept at home has gradually decreased. And this is no coincidence. The development of the financial system and the advantages it offers has allowed it to play a leading role in the collection of savings, relegating private safes to a certain ostracism. But why has there been such a drastic change in habits? The main factor is security, since it is a fact that, no matter how well hidden we may leave our savings, there is always the possibility of them being stolen.
The other point to bear in mind is taxation, as keeping cash at home can currently entail certain risks with regard to the Inland Revenue. Agent Mireia Cano explains it to us.
Will the money lose value?
The other variable to take into account is inflation and its effects on prices in general. The reason is very simple: the money we keep in the safe or under the mattress, in a year, two years, or ten, will still be the same: it will not multiply. However, basic products, such as the coffee we drink in the corner bar, will have gone from costing one euro to costing one and a half or even two euros. These are the effects of inflation, or sustained price increases.
That is why money kept at home can end up losing value over the years if inflation during this period is high. On the other hand, people who have decided to invest some of their savings, or put them in a deposit or somewhere that gives them interest in return, are unlikely to have been hurt by inflation, and may even have increased their money.
So what is the best option? The decision will be a personal one, as everyone has their own way of managing their money and more or less tolerance for risk. But whichever option you choose, you need to be aware of the advantages and risks that this may entail, to prevent your hard-earned savings from being compromised.
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What is money and what role does it play in our lives?
In a few days we will once again experience an atypical Easter, very conditioned by the pandemic and which, most likely, will not allow us to go where we would like to go. This means that our options for disconnection will be greatly reduced. In spite of everything, holidays are still days off, which is why we would like to give you a few tips on personal economy so that you can get a proper getaway after so many months of work and pandemic fatigue, even if it is close to home.
Control your expenses
Let’s start with the most obvious and, at the same time, the one that we least take into account. To know how much we can afford to spend or how far we can travel, we need to know how much we have first. How much money is spent monthly on basic needs such as mortgages, rents or bills? What about leisure? How much money do you spend on new clothes or going out to dinner at that restaurant you like so much? Are these recurring expenses? Can they be cut back?
There is a savings rule that can help us put our money in order, economists call it the 50/30/20 rule. It proposes dividing our expenses in order to be able to cover all our needs and save money. Specifically, 50% of our income would go towards basic needs, 30% towards our leisure time and 20% towards the future, i.e. saving for those plans or trips we want to make in the future. Organising our money will allow us to have a clearer idea of our possibilities and from here, work towards achieving them. We recommend opening a bank account to keep only the money you save so that you are not tempted to spend it.
Planning as a central strategy
This point is key to achieving savings, and planning must be very present in order to avoid an imbalance in our individual economy. Aspects as basic as writing down a weekly menu that allows us to buy only what we need and avoid last-minute purchases that are often compulsive and unnecessary. With good planning, lower prices can also be achieved when looking for travel options.
You have to define the destination and search different websites for the best deals; in fact, there are already applications that provide this service. Although it can be tedious, perseverance means that in the end you will get the best deal and avoid the usual last-minute price hikes. An advanced reservation is a saving and also a positive reinforcement that helps us to work with motivation.
Earning extra money through simple actions
Because of the confinement and health restrictions, many households have most likely already experienced considerable savings in their economy. However, there are still small things we can start doing to give our savings a boost. If we look at our electricity or water bills, we can consider cutting back here. For example, try cutting down on water consumption when we take a shower or take advantage of natural light when doing work around the house to reduce electricity use. The changes will be small, but in the long run they will mean significant savings and, at the same time, they help the environment.
On the other hand, if you look around your home, you are sure to find objects that are no longer in use, such as clothes, furniture or toys. The second-hand market is thriving and there are already dozens of mobile applications that allow us to earn money through the sale of items we have stored at home. With a little skill and competitive prices, you can save some money while gaining space at home.
Set a goal and do not lose hope if you fail to achieve it.
Where do you want to go, and what are you most excited about? Having a goal is the perfect tool to encourage you to make small efforts. Set a figure for the amount of money you want to save each month; it doesn’t have to be a large amount, with small efforts you can save a considerable amount of money. At the end of the day, the most important thing is consistency.
Unfortunately, we have to bear in mind that we are going through a global pandemic and that it is likely that we will not be able to go where we would like to go, or even that bookings will be cancelled due to health restrictions. Instead of getting angry and squandering the few days of holidays we have, we should reinvent ourselves and look for other destinations closer to home. It may be a good time to explore places close to home that help us to disconnect, such as hiking trails, cultural heritage or other charming places that you had never thought of visiting before due to lack of time. At the end of the day, you don’t have to go far from home to find places that provide mental relaxation.
A PISA report confirms that our country is in tenth position out of the 15 OECD countries analysed, according to Price Water House (PwC), on financial knowledge of children between 13 and 15 years of age. In other words, Spain devotes far fewer hours to financial content at school than other countries, despite having the longest school day.
Financial education could be defined as a person’s ability to understand how the economy works and to make decisions based on that understanding. This type of information allows us to develop skills that will ultimately translate into greater economic well-being and, therefore, be better prepared for times of economic crisis such as those we are currently experiencing.
If we educate children from an early age in the concept of saving, in the good use of money, they will be better prepared for future crises that may occur. Responsible use and economic planning is essential for future generations. An example of this is the Inspiring Girls Foundation, which has launched the Inspiring Girls Financial Club with the aim of helping teenagers and young people learn to manage their own finances and learn about new trends and the financial market in a simple way. They are supported and have the experience of real women who work in prestigious companies.
- Literature can also help us
BAPI, is a book written by Pilar Mellado, a CNMV technician, integrated in the Financial Education volunteers program, and its objective is to bring financial education to children. The author had the idea of creating this book to disseminate concepts through the main character, BAPI, an imaginary elephant that stars in a children’s book for children to learn basic financial concepts, such as “piggy bank”, “bank”, “spending”, “saving” or “debt” in a fun way.
Mellado states that “it is important that children are immersed in stories that transport them to a universe of superheroes, princes and princesses, fantastic animals or objects that come to life”. These stories, in addition to being entertaining for them, can be accompanied by what he called educational pills, and that is BAPI’s objective, to entertain by handing out financial pills.
- The impact of social networks on consumption
It is true that nowadays, it is difficult to do this exercise, we live in a consumerist society, where everything is shown. Social networks do not help children to become aware of what it costs to earn money, let alone save.
In this social network, many influencers sponsored by big brands show an endless number of products and services. This is where the knowledge of the older generations is important, explaining that not everything we see and want can be bought.
If we want the little ones to be educated people, with values and success, we have to inculcate the sacrifice that comes with saving with the effort to get the things they want.
One of the first steps we can take is to give them a piggy bank from an early age. From that moment on, on their next birthday or special date, if they receive any economic gift, they will have to deposit it in their piggy bank. It is important to explain to them that with the money they have been saving for X amount of time, they could buy what they want, but if they spend it all, they will end up with zero money.
Later on, you can also propose activities to earn money. Create a calendar with weekly goals for household chores. Make them simple, but require the investment of a minimum of time and effort, and if they do everything that has been proposed, they can get money. With this method they will know what it costs to earn money through sacrifice.
Financial education comes from home, if we start with these practices and we get schools to talk more and more about personal finance and put it into practice, we will be creating new habits for the new generations that will make their lives easier and more bearable, and we will also get them to appreciate things more when they buy them with the fruit of their effort and tenacity.
Although it may seem unlikely, special moments will come again and you will have to be prepared for them. If you have had to cancel a special event and you are setting possible new dates for the end of this year or next year, this article will be very useful for you to be able to prepare yourself financially, in time and face those special expenses with ease.
Last year we had to cancel all events, we did not enjoy special days, such as weddings, celebrations, meetings, parties… And even today we are still waiting for the so desired herd immunity. But, let’s be positive! Everything will come and with it, the good times. Here are some tips that can work for you.
- The company, the most important thing
First make a list of attendees with the people you think will be able to come. Now is not the time to invite family members who are far away, people you haven’t seen for a long time, or people who have commitments. Invite people close to you who make you happy and this will make your event more intimate and authentic. Once you have the number of guests, make a budget of the money you can count on and that way you will know how much money you can spend. We advise you not to count on money for gifts. You can opt for a digital invitation, there are many applications that will allow you to make spectacular designs and if it is not your forte surely you have someone close to you who has good taste and can do it, you will save on the cost of having it professionally designed, printing and shipping.
- And now… Planning!
Choose a day during the week, teleworking has brought us many advantages and this is one of them, you will be able to celebrate your special day during the week and it will not be an issue for your guests because they can recover it another day plus the cost of the place where you are going to celebrate it (hotel, restaurant, farmhouse) will be lower than during the weekend. You can save up to 20%.
Out of season: most events such as weddings, communions, baptisms, are held between May and September, the prices outside these months are much cheaper. Events in winter and autumn are very original, do not discard these months.
The dress can cost a lot of money because we want to be different and dazzle with our dress or suit, think about this point if it is worth spending so much for a few hours. Consider renting, you can find the dress and suit of your dreams for that day but a dress you will probably never wear again.
If you have enough time, bet on the do it yourself, DIY, decoration, the names you want to put on the table to identify each guest, search for social networks like Pinterest and you will find millions of ideas and how to do it, besides saving a significant amount of money you will love the results and all done with your little hands. The new normality is making us change many habits, it is preferable that you do something informal in which guests can stand and have lunch or dinner that is outdoors, so there will be the possibility of having more distance and hygiene. If you opt for this option, you can make food stations where people can comfortably take what they most want, it will always be cheaper than a closed and individual menu.
Think of an alternative to flowers, or choose seasonal ones. If you want to be more daring, there are other options such as candles, bamboo, glass that you can even rent. When decorating we usually spend a lot of money on flowers to make sure the photos look good but you may be surprised by the result and your pocket will thank you for it.
The photos and the video are the most beautiful memories you will have forever, but it is also an important cost in your budget, choose not to take the most expensive package, a cheaper option will still capture the most special moments. Involve your guests in taking pictures with their mobile phones and then share them, it will be a very funny album.
- Some more tips
Sometimes we think that hiring a specialist to help you organize your event can be very expensive, but it is not, if you do not know where to start, they will save you a lot of headaches, they will stick to your budget and will recommend everything you like, but looking for the best prices, they have a wide range of options to offer you what you need.
Have extra money. When you start to organize an event, there are always last minute things that you didn’t count on, plan your budget well to be able to solve those last little things, the goal is that you feel comfortable with everything you are creating to make it a 10 day. Surely you have a lot of things that you haven’t used for a long time, if so, open your account on Wallapop and sell clothes and objects, you will be able to get some extra money for your budget.
We agree that a communion, the celebration of your child’s 18th birthday, or a wedding, have to be one of the most special days of your life, but you also know they can be expensive days. It is not worth getting into debt in exchange for a day of laughter and emotions, follow these simple tips to make your day unique and unforgettable and not a nightmare for your pocket.
If you are subscribed to more than 5 platforms to watch series and films, among others such as Spotify or Office 365, this article is interesting for you.
Every day new platforms are born and, with them, new services that allow sharing streaming subscriptions with the aim of reducing the membership fee.
Netflix has gained 37 million users in the last quarter of the year, 31% more than in 2019. The platform reported 5,466 million euros during the fourth quarter, 21.5% more than a year ago. Subscriptions have become a must and living without them is no longer conceivable. It is true that our consumption habits have changed; now, with all the digital TV platforms, it’s hard to go back to having to watch ads every 15 minutes. Now everything is à la carte, how, when, and where you want. Of course, what is not so fun is the amount of fees, even if they are tiny, that you end up paying monthly. In this article we are going to give you some recommendations to save money and manage your subscriptions.
If we go back 20 years, surely you remember Canal+, one of the first private channels, which allowed you to watch films and shows; the cost was quite high, so only a few privileged people could enjoy it. With the arrival of Netflix, HBO, Disney +, Filmin, Amazon, and so on, annual subscriptions are between €10 and €15 per month, which seems a totally manageable amount, taking into account that going to the cinema costs much more. Now, you have to bear in mind that once you subscribe and start scrolling, on many occasions, you waste more than half an hour choosing a film: the variety is so extensive that it is difficult for us to determine (depending on our mood that day) what we want to see each time, and for that reason, you end up having several platforms.
Following the thread, once you subscribe to any of the indicated platforms, you realise that the film or series you have just been recommended or you think you cannot miss is on another platform, so you automatically download the app and start entering your data. You are seduced by the subscription price, so without realising it, you have more than 5 platforms to watch millions of films, documentaries, and series.
- What to do if you identify with this?
Check your subscription plan: if it allows more users and devices, ask your relatives and acquaintances if they are in the same situation; in this way, you can share the monthly expense. Of course, we recommend that you plan everything a year before, divide the fee, and have your friends pay you, for example, through Bizum, so that they do not forget. That is, if the monthly fee is €15 and you are going to share it among 3 people, they must pay you €60 each, and if you have paid €180 annually, you will only pay €60, so you will save €120.
A great advantage of this type of platform is that they do not ask you to stay, so you can unsubscribe when you have finished watching your favourite series and seen that there is nothing else that may interest you. You can stay 1 or 2 months, or as long as you need, and you can unsubscribe until a new order.
Take advantage of promotions. You have to be careful, because if you have not signed up for a platform, as a new customer, you might be given a free month. If you think it’s worth continuing, you can share it again, if possible, with other users. Of course, check the conditions properly once you sign up, since sometimes, if you do not cancel the subscription, you may automatically be charged for the next subscription the following month without prior notice.
If you don’t like having fixed costs, there are platforms, such as Apple TV+, that allow you to rent a film for 24 hours at a low cost and, after this time, it expires; it is an option, but if your purpose is to save, we advise you to consider monthly plans, since they are always cheaper.
There are other platforms, like Spotify, that allow you to listen to all the music without interruptions with a monthly subscription. They also have plans that you can share with more people, thus reducing the monthly fee. On the other hand, Apple features a family plan, with which we can even purchase paid applications that can be used in the plan, and we can also share books in digital format with the whole family.
- Do you know Together Price?
If you have Netflix, Spotify, Office 365, Nintendo Switch, or Xbox Live, among others, this is for you. Together Price helps groups of people share the cost of their multi-user plans in an easy and safe way. If you are the account owner, you can indicate available users and add your acquaintances so they can participate. In this way, when you register, you will automatically receive the amount from your friends and family.
- And what is the use of this all?
Thanks to all these platforms, the OCU reports that 77% of respondents no longer download films or music illegally. Finally, it is important to review and ask the experts, when we buy a mobile phone, to explain to us if we have these services. Remember the example we mentioned: with only one platform you can save up to €120 and, if you do the same with other platforms, much more. Go ahead and share this with your friends and family.
It is time to review your subscriptions, consider which ones you use, and share to minimize your expenses.
Here we present 10 recommendations for you to enjoy your holiday and save on bookings and many other things
This year, many people are expected to go on holidays in July, but will we have money for our much-desired holiday? I am sure we are all thinking about summer and, therefore, on the holiday; many of you already have in your mind the place where you want to travel, but you are waiting for new recommendations on whether we will finally be able to take a plane and enjoy a well-earned disconnection.
Holidays are necessary to reset ourselves, to enjoy our beloved ones’ presence, which is very necessary, and to recharge the batteries to get back to work with a clear head. It is also a time when we try not to pay so much attention to expenses: we usually eat too much, we buy things we know we will not find in our city, and we go to that hotel that we desired so much. That is why we are telling you some tips for saving on holidays, so that the return in September is more tolerable and free of headaches.
- Start saving a year earlier if you can
The first recommended step is to create an estimated budget of the amount you want to invest in your next destination so that you can create a savings plan a year earlier. The most comfortable method is opening a savings account or wallet at your bank and making a recurring automatic monthly transfer; this way, before you start your holiday, you will have the saved amount you need to avoid unforeseen expenses.
- Book in advance
The online world provides us with a huge price variety. Besides, if you can have the dates for your confirmed holiday at the start of the year, you can save a lot of money, you will get better prices on your plane or train ticket, etc. The earlier you book it, the better! And the same thing will happen with the hotel; we even recommend that you book a table in that restaurant you’ve been following on Instagram using applications that offer very interesting discounts, even 50%. It is important that you check cancellation costs on your bookings, in case it is necessary.
- Take advantage of breakfast
Everyone knows breakfast is the most important meal of the day and it is necessary for large walks. Make use of breakfast if it’s included in your hotel nights; get ready and eat like a king; take advantage and grab a fruit for mid-morning, in case you get hungry before lunch.
- Schedule sites
If you love making a presentation of your next trip and sharing it with the rest of your travelling companions, you’re lucky, because this is another way to save money. If you list the sites you want to visit, you have the option to visit their website and make the reservation. You can find promotions and, if you are several people, you can benefit from group discounts. In addition, if you purchase the ticket in advance, you may even avoid long queues.
- Currency exchange
Even though currency prices cannot be controlled, before exchanging currency, check with your trusted bank a few weeks before your trip, to know if it is better to wait till the day before the departure. In many cases, the recommendation will be to do so at the airport, as exchange houses try to offer the best prices. One important thing: if you want to make credit card purchases during your trip, exchange an amount, even if it’s small, in case any unforeseen event arises (train ticket, tips, etc.).
- Use cards moderately
As we mentioned before, when you’re on holiday, the last thing you want to think about is how much you’re spending, but we almost always exceed ourselves… Try to implement the recommendations that we have made so far and try to avoid the use of credit cards as much as possible if it is not planned in your priorities. At that moment, it will be an impulsive purchase, but later, it will become an important amount of spent money.
- Road trip
If your holiday option is to take the car and go to some nearby villages, use GPS, which always recommends the best route to avoid making unnecessary miles and thus save on petrol. Visiting destinations near home is a highly recommended option; we often forget the wonderful places we have near our city that we can visit without taking a plane.
- Avoid restaurants for tourists
Plan your time well and, when you visit some particular place, if it is in a tourist area, avoid rush hours for lunch or dinner: normally, restaurants in these areas are of poor quality and high cost. It is preferable to walk four steps and look for alternative places that are frequented by locals, to ask the hotel receptionist, the taxi driver, and, of course, to look at the options Internet searchers provide.
- Hire free tours
Find them in the centre of big cities or ask that friend who travels a lot, who has certainly used them. They’re tour guides that take you around the city and tell you a lot of very interesting things without a specific fee. If you like it, it’s optional to leave a tip.
- Finance your holiday
If it has been a difficult year and you cannot follow some of the advice that we have mentioned, such as planning in advance, do not give up to a few well-earned days of rest, find your closest travel agency, and finance that trip you are so excited about; you can also consult your bank and extend your credit card so that you can cope with your expenses or borrow a small loan that you will return comfortably month by month.
Summer is here. Use these recommendations and start daydreaming. And remember, split the amount established for your pleasure throughout your holidays and do not spend more than expected.
There are applications on the market that allow you to pay, by instalment, online purchases and purchases in shops, without commissions for purchasers
In recent times, we have seen that large companies allow financing everything, that is, they allow the customer to buy low-price products (shoes, suits, and consoles, amongst others) and to pay them comfortably, by instalment. As a result of the pandemic, online sales have grown in all sectors and consumers have also been finding new ways of saving. This has increased the specialised fintech on credit payment systems, known as Buy Now, Pay Later (BNPL).
A few years ago, some retail shops introduced the concept of Buy Now, Pay Later, which is not new. In fact, this system allowed the products to be tested before they were paid, so if customers were not satisfied, they could return them. Therefore, customers only paid for products they actually kept.
New Payment Methods
Times change and so do the ways we buy and pay. One of the main benefits of traditional banks is the payment of charges at the time of a card purchase, whether in a shop or online. This is one of the markets which, in view of the few interests that can be paid by providing loans and mortgages, because of the low interest rates, enables banks to generate income. However, this market has recently got complicated, as new forms of payment directly applicable to vendors have appeared, and they incorporate the solution of “Buy Now, Pay Later” applications.
The two best known and most widely used applications in the world are that of the Swedish company Klarna and the Australian Afterpay.
The way these applications work is very simple. The user, after choosing a product, when they have already decided to buy it and check out, instead of pulling their card or wallet, pull their mobile phone. The shopkeeper sends a payment request via an email that the customer must confirm or the operation is confirmed by a QR reader. Once the operation is accepted, the acquired article can be kept.
So far, everything is very similar to a purchase made and paid with the mobile payment service of the purchaser’s bank. The difference is that with the system of the Buy Now, Pay Later (BNPL) system, the purchaser can, if they want, choose not to charge the bank account immediately for the purchase amount. This decision does not represent any cost to the user of the BNPL system.
When a credit card payment is made, if the purchaser finds there is no money on the account, the operation is automatically cancelled by the bank and they will have to leave the store without the product. On the other hand, traditional banks charge a fee to the store for the use of their online payment service and also, if the payment is on credit, in some cases, the bank will charge interest to the customer, as well as a card maintenance commission.
Another difference is that the Buy Now, Pay Later apps allow you to fragment purchase payments. The shop receives the total amount of the purchase at the time it is made, but the purchaser can choose different payment options by instalment (one or more payment fees, within a time limit allowed by the application), which will not impose any additional financial burden, that is, no interest or commission. Their cost will therefore be zero.
For the time being, in order to enjoy this payment system, it is necessary to have an account in a bank, as applications do not yet have a bank licence to operate customer accounts.
And how do these applications earn their living if they do not charge commissions or interest to purchasers? Well, they charge a commission to shops, as traditional banks do. The difference is that this fee is less costly than the traditional fee.
Thus, fintech such as BNPL can survive only on this income because it has no major infrastructure costs, no maintenance, no advertising, and few employees, unlike traditional banking, which has very high costs in all these respects. In general, these payment application companies have low costs because they are based on technology. This gives them a competitive advantage over the traditional banking sector, as it allows them to offer services to the establishments in exchange for smaller commissions and, in turn, they do not charge customers any interest for choosing to pay for purchases by instalment.
BNPL applications have revolutionized the small shop industry and the way of shopping. Millennials are regular users of shopping applications and they value the chance of saving and the convenience at the time of making purchases, such as not paying fees or interests, as well as being able to pay in comfortable quotas. It is proven that, at the time of making a purchase, the price is decisive and, in online purchases, the final decision of keeping a product is taken at the time of confirming the purchase. The purchase is not completed because the purchaser considers the price to be a high-cost blow to their pocket. The possibility of paying for the purchase through BNPL (Buy Now, Pay Later), encourages the consumer to complete the purchase, increases customer loyalty, and provides a better shopping experience.
Buy Now, Pay Later apps are very popular in Australia and the United States and, in the last year, have broken through Europe in full strength.