How to woo that special someone without breaking the bank–latest from Helen Lawless

One of our young money voices, HELEN LAWLESS, is back with some ingenious tips about low-cost dating

Dating someone is great, obviously, but it does entail a whole load of expenses you don’t have to concern yourself with when you’re unattached. So how do you dump the reckless spending but not the object of your affections?

Going out:

· Go on a low-cost date like visiting a free museum, people-watching in a coffee shop, wandering along the beach or sharing a picnic in the park. All of these date ideas also have the added bonus of being conversational, as opposed to going to the cinema or a night club, both of which are over-priced and won’t allow you to really talk to each other.

· Before a date, check websites like GroupOn or MoneySupermarket.com for vouchers to make activities cheaper. Also, if you like your favourite restaurants on Facebook and/or follow them on Twitter, you can sometimes get discount vouchers that way. Also look out for restaurants and bars local to you which give you a discount if you Tweet that you’re there.

· For special occasions, you don’t have to go to the Ritz – it just has to feel like it. Try dressing up for a modestly priced dinner out and it will automatically feel more romantic, or if you live together, have one of you pick the other up from your mutual front door, like the good ol’ days.

Staying in:

· Learn to cook! Not only is it a wonderful gesture to cook for your loved one, you’ll save significantly compared to eating out, getting a take away or even buying ready meals, so get your chef’s hat on! If you’re a complete novice check out sites like BBC Food which have categories for quick ‘n’ easy recipes.

· Get a joint Netflix subscription. Not only will having a common TV addiction bring you closer together, it will make cheap nights in more attractive and save you money compared to renting a movie.

· Ditch the booze as often as possible: even though drinking in is relatively cheaper than drinking out, it’s still a sizeable expense, so ask each other if you really feel like that six pack or bottle of wine tonight before just buying it out of habit.

Keeping in touch:

· Download a chat app as an alternative to texting, which will mean you can talk for free whenever you both have WiFi, like Viber, WhatsApp or GroupMe.

· Similarly try Skype to see your s.o.’s face or Relay Gif Messenger to send them cute puppy gifs throughout the day!

· If you’re in a long-term relationship consider joining the same mobile phone network if you’re not on it already, as it’s usually cheaper to call someone on the same network as you.

Date night doesn't have to be an expensive night on the town. Try having just a romantic evening at home.

Showing you care:

· Expensive presents do not equate to caring, so try making your cards and gifts yourself, to add a personal touch and save some cash. Obviously this suggestion comes easier to those who are artistically inclined, but even if you can’t draw, you can make a collage of photos of you both, bake something yummy, or invest in some arts and crafts supplies. Don’t worry, even if it’s not great you still get points for trying!

· Even if the arts and crafts scene isn’t for you, when joint occasions are coming up like Christmas or an anniversary, set a mutual spending limit on presents and cards.

· Besides cards and gifts there are also other ways to make his or her day: mow their lawn, help them with a DIY project, write them a love letter or offer them a back rub.

Love doesn’t have a price tag, so make sure you’re the one going above and beyond for that special someone, not your bank account.

WRITTEN BY HELEN LAWLESS, ONE OF THE YOUNG MONEY BLOG’S NEWEST VOICES

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Filed under Bargain hunting, Dating, Leisure, Shopping

Cyber-bullying, rapping about money and the professions that desperately need YOU!

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The Young Money Show on Share Radio took off in style today as Iona aired a clip from a young people’s radio station in Manchester and a cool money management rap!

She also welcomed guests to talk about a money competition that reaches out to youngsters from the most disadvantaged backgrounds, and about an attractive but little-understood profession that is trying to attract young graduates looking for a career.

Iona first commented on a report out today about cyber-bullying. There is plenty of advice online, she noted.

“Make the most of privacy settings, think before you post, don’t reveal identifying details about yourself, discuss with your friends, stand up to bullies online, and talk about it at your school.”

Is it too late to brush off on your financial knowhow? No, said Iona, who next drew attention to a valuable course being run by the Open University which offers people the chance to become more savvy about their money.

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Iona in the studio with Sahar and Dr Fiona Grant

‘Managing my Money’ gives practical guidance on how to compile a budget, and discusses debt, investment, home ownership, pension products, and insurance. The course lasts eight weeks, commitment is three hours a day, but you can choose when to study – and you get a certificate.

“That can be very helpful if you are looking to boost your skills and employability,” Iona said. “Employers actually welcome evidence that you are savvy when it comes to your personal finances.”

The free online course starts on January 5, and you can find out more at:

futurelearn.com/courses/managing-money.

Next Iona told listeners about the Lloyds Bank ‘Money for Life’ competition, which she helps to judge. It’s a scheme open to young people from all over the UK. One of the entries was from some young guys in Manchester who received a grant for £500 to produce and promote a money show. In a music-style format, the ‘DJ’ showcased not top music tracks but top money-saving tips. The show went out last year on Reform Radio, a community station in Manchester, the team reached the Money for Life final, and they now have plans to pilot the show in local schools.

As we heard in the clip from the show, the chart-topping tip was “avoid the three Ts – tobacco, taxis and takeaways”!

Next came the show’s big treat –a money rap. You can find it at:

Money Matters on soundcloud.com

Iona then welcomed to Share Radio Irfan Zaman from Money for Life UK. He revealed that entries for the competition come from youngsters from all backgrounds and from all over the UK, and described how it prompts young people to engage with money in different ways.

The second part of the show focuses on young rights, particularly workplace and career issues.

Irfan Zaman highlighted the high proportion of 16-24-year-old NEETs (not in education employment or training) and noted the importance to this group of financial awareness.

Iona then welcomed to the studio young surveyor Sahar Rezazadeh, who is among the finalists in the Young Surveyor of the Year competition being run by the Royal Institute of Chartered Surveyors.

Alongside her was Dr Fiona Grant from the RICS, who talked about the profession’s need to communicate with and attract graduates who did not realise the attractions of surveying as a profession.

Sahar told Iona her degree was in political science but she had realised it could serve her in different ways.

Asked by co-presenter Georgie Frost what was ‘fun’ about being a surveyor, Sahar said the work was always varied and was all about engaging with the built environment around us.

LISTEN TO THE FIRST PART OF THE SHOW ON AUDIOBOOM NOW!

https://audioboom.com/boos/2650453-listen-back-to-part-1-of-today-s-young-money-young-rights

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Filed under Consumer Affairs, Employment, Graduate finance, Mobiles, Personal Finance, Personal Finance Education, Technology

What today’s news about payday lenders means for YOU–and ways to avoid their clutches

By Iona Bain

The Financial Conduct Authority has confirmed a series of restrictions on payday lenders, designed to lift vulnerable consumers out of their reach. But can you avoid these high cost loans if you wish to borrow in the short-term – and how should young people view this controversial practice?

What this clampdown illustrates is that charges were not always easy to understand, contrary to what the industry has claimed, and the consequences of missing repayments have been poorly explained to consumers. That was either by accident or by design – either view would stem from how much you believe payday lenders have sought to obfuscate their charges in order to be profitable – much like the banks do with overdrafts!

Even if lenders had made every possible effort to set out charges openly and clearly, the kind of consumers they are ostensibly targeting – young workers who are in position to borrow – do not always have the wherewithal to pay back debts in a timely, efficient way. This is partly because they they are living on a financial knife-edge in the first place and the money might not always be there to keep the lenders off their back. Sadly, young people do not always grasp the seriousness of entering debt in this way, as it hasn’t been drummed into their heads by teachers and parents, and that’s one reason that they fail to understand the consequences of missing repayments.

After all, it would be easy to trivialise all these digital transactions – it is not the same as handling real, tangible money. There is an unfounded idea among many young people that the wolves can be kept from the door and more money can be made available if need be – after all, that was the same mentality that drove them towards payday loans in the first place. So it’s easy to see how an unpaid loan can quickly turn from a nagging burden into a full-blown crisis. Regulators are now starting to see that the problems with payday lenders are intractable, reliant as these companies are on a market that is financially precarious enough to require financial help in 15 minutes and therefore highly unlikely to ever understand how the products work so they can be used responsibly.

In any event, it has become that the more unsavoury payday lenders in the market, of which there seems to be hundreds, actively target people who may be sloppy with their finances and ripe for further charges. I actually believe these companies have mistakenly believed that young people and vulnerable sections of society are the basis for a sustainable business model and regulators snapping at their heels to cap charges must now make it difficult for many payday lenders without the marketing budget of Wonga to turn a decent profit.

Not that they should expect any sympathy from me. It is clear that payday lenders have capitalised on a foggy financial outlook among young people, who are led to believe they can achieve the lifestyle they want right here, right now but cannot adequately weigh up the value of different borrowing options. The problem is exacerbated by high street banks which are incapable of offering a similar short-term borrowing model on a profitable basis. I met representatives from a major bank earlier this year who told me it was “physically impossible” to offer short-term borrowing options on a par with Wonga – although that doesn’t explain why certain credit unions, like Glasgow Credit Union, are in a position to offer quick loans to its members who are already saving responsibly. But any chance of banks adopting a similar model anytime soon? I wouldn’t hold my breath. Banks seem incapable of innovating at a rate necessary to keep up with this fast-mutating consumer economy and are at risk of seeming truly out of touch compared to quick-fix credit providers online.

But please, please don’t be fooled. No good can come from short-term borrowing, even if you repay on time and without incident. Young people don’t have to paper over the cracks in their financial situation by taking out money within 15 minutes, and the speediness of these loans compared to other options does not detract from their intrinsic poor value.

 

So let’s take it back to basics:

Budget, budget, budget

It’s simple really – just have a look at your most recent bank statements, and see where your greatest expenditure was. If the cost of that night-out shocks you, or if you spent more than you bargained at a particular online store, it’s time to get some strategies in place to avoid unplanned or excessive spending that could tip you over the edge and force you into short-term borrowing.

Master your urges

Remember the marshmallow experiment conducted by Stanford University professors back in the 60s/70s? Children who waited to receive two marshmallows, rather than eat the one right in front of them, were found to be more healthy, as well as functional in their careers and personal lives, when they grew up. Ways to defer gratification, and stop you taking out a loan to fund expensive habits, range from ‘proxy activities’ (all the better if they’re free) that can be employed a moment’s notice, graceful ‘white lies’ to help extract you from social scenarios where excessive spending is on the agenda (such as a big night out) and turning the people around you into full-time support staff. That means if you feel the urge to go online and shop, or head out for the night with your debit card fully loaded and ready to be wiped clean, ask a helpful friend/housemate to keep you in check. By the way, heading out for the night with cash only – NOT your debit card – is probably your only bet if you want to avoid spending far more than necessary.

Consider other borrowing options, particularly if they are available through a local credit union

That is because a credit union will ask you to save a certain amount before you can take out any money, thus giving you a financial cushion. Even borrowing via an overdraft or credit card can be a sensible plan compared to a high cost payday loan – but only IF you understand any charges involved. I say that if you’re in any doubt, look at your long-term spending habits and ask if there is anything that can be changed so you don’t have to resort to unnecessary borrowing.

Consider a current account with an interest free overdraft…

…like the one currently offered by M&S Bank – unlike other banks, it doesn’t charge a monthly fee and its overdraft is worth £100, interest-free, if you find yourself dipping into the red. Plus, its gives you a £100 M&s gift card. The £125 on offer from First Direct is an extremely tempting option as it offers a very generous £250 interest free overdraft . However there is a £10 monthly fee – and you won’t qualify unless you can pay in at least £1000 a month.

Halifax will pay you £100 to switch, and then pay you £5 a month as long – as you deposit £750 every month – but it will also charge you £1 a day if you slip into the red. Which could work out pretty expensive.

So I recommend M&S Bank – there is no fee and its overdraft is worth £100, interest-free, if you find yourself dipping into the red. And they will give you a £100 M& S gift card.

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Filed under Budgeting, Credit, Debt, Payday loans

Young Money Show launches on Share Radio!

Iona Bain & Georgie Frost co-hosted the first weekly programme between 9 and 10 a.m. today as part of the station’s Consumer show

Iona kicked off with her own moneysaving tip wash your clothes on 30 c not 90c ‘because we don’t all work down a coal mine’

A report out today says that only 16 % of under 34s will be homeowners in 5 years time, almost half the 28% now

‘Shocking’ says Iona, young people crave property ownership because they want security, and in many cases they are paying a high price for the freedom of renting

Open up economic opportunities outside London & south-east for young people to ease the pressure on housing demand, Iona says

Poppy profiteers banned by eBay – on the re-sellers of £25 ceramic poppies from the Tower installation, Iona says: ‘Not everything has to be about money and the opportunity to make a quick buck….Hats off to eBay who will cancel any sale – it’s the right thing to do in this instance.’

*Iona is co-organising a Remembrance Event at St Cuthberts Church, Earls Court, on Sunday evening. Music by Vaughan Williams, Butterworth, Ravel, poems by Owen, Brooke. Gospel choir and orchestra. Art exhibition. Proceeds to Royal British Legion. 7pm, all welcome.

Back on the Young Money Show, Iona:

*endorsed local high street shopping

* called for zero tolerance on drink-driving among young people – ‘if in doubt leave it out’

*warned that financial education may get pushed off the school curriculum unless teachers champion the subject

*supported the ‘big picture’ approach to teaching young people about money – awareness of their own attitudes and behaviours

*said employers face too much red tape in taking on apprentices – that should be sorted out

*reassured that saving even a small amount each month is better than nothing and could make a big difference to your peace of mind

*warned that social media pressures mean young people can sleepwalk into overspending

*reminded young people that commercial tuition fees have made university a commercial transaction, and they should get the service they pay for

Iona also reminded under-26s they should have a 16-25 Railcard if they travel by train, and that it can be put onto London Oystercards – thanks to immediate tweet from @MartinOyster saying older students can get railcards if in full-time education

Young Money Show rolls again Friday November 14 at 0900 on Share Radio – so stay tuned!

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Why energy prices have been rising – and what YOU can do about them

BY Iona Bain AND MIKE YOUNIE

Energy prices have been a major talking point in the media recently – little wonder, when both households and politicians appear to be obsessed with this rather heated debate. Pardon the pun!

Thinking. Amazing use of tactile and white space

In recent years, consumers have increasingly felt the pinch of rising energy bills, putting their already tight budgets under excruciating pressure. Over the past 3 years, on average, UK household energy bills have risen by 21%, the equivalent of £221 per year. Many households have been forced to take drastic measures, trying everything to avoid switching on lights and using their heating.

So why have energy prices risen so sharply in recent years? There are a number of factors. Firstly, the big six energy firms have increased their prices by almost a third. Collectively the big six dominate the market, with a customer base of around 90% of all households.

Additionally, the infrastructure of the UK energy system has undergone some big changes in recent times. One of the biggest factors behind energy price hikes is the investment made by the industry in the development and improvement of our energy supply network. Transporting gas and electricity around the country is a serious operation – setting up, maintaining and upgrading this energy network costs huge amounts of money. And yes, you’ve guessed it – the cost is ultimately passed on to the consumers. It’s estimated that by 2020 over £118bn needs to be invested in order to keep up our energy supply.

Tax and levies on energy have also shot up in recent years, further affecting our bills. In fact, the European Commission recently said this was the biggest reason for the most recent spike in electricity bills.

So what have consumers been doing to tackle the rise in prices? Well, there are a couple of simple strategies that have recently proved very effective. When it comes to slashing energy bills, a typically overlooked piece of equipment is the energy efficient light bulb. As winter is drawing in and nights are lasting longer, we are all spending many more hours of the day with the lights on. As these energy efficient light bulbs draw less energy from the grid, you can light up your home relatively cheaply.

But one of the biggest issues surrounding energy prices and suppliers is a lack of knowledge on the part of consumers – particularly young people. Energy providers overwhelm us with a huge variety of tariffs, making the market very complex. This is creating a great deal of uncertainty among customers when it comes to shopping around. So many of us decide against it. Picking up the phone and speaking to different energy suppliers could strike fear into many hearts – especially if you’re not completely sure about what your options are. Then there is the danger is that you may hang up the phone having just signed up for a new tariff you have no idea about! However, if you have been with the same energy supplier for a number of years, switching could save you lots of money.

Recently Ofgem has launched a website – Go Energy Shopping – for consumers who are looking around for a new and cheaper tariff. Ofgem is the independent regulator tasked with keeping the energy market in check.

A three-step handy guide gives consumers the lowdown on how to slash their energy bills – understanding your energy consumption (and bills), compare the energy suppliers and switch the energy tariff.

Ofgem is also using a “Confidence Code” for all trusted, unbiased price comparison sites for you.

The website also includes a ‘glossary of terms’ to help explain any technical terms on your energy bill, links to useful website and a downloadable guide- everything you need to become energy savvy.

Check out www.goenergyshooping.co.uk and see how much you could save your energy bills.

Kindly supported by Ofgem – we only have partnerships with reputable organisations and firms who seek to help consumers. Please get in touch if you are interested in supporting our non-profit blog and young writers: ionabain[at]hotmail.com

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Filed under Consumer Affairs, Energy, Personal Finance, Shopping

Weird and wonderful funding still available for cash-strapped students (from the Sunday Times)

Iona Bain

Sunday Times

Jessica Williams received a grant of £500 from the Vegetarian Charity to help fund her MA at Imperial College London

AS FRESHERS get into the swing of university life, their families may still be fretting about how to pay for it with university tuition fees of up to £9,000 a year.

However, vegetarians, Welsh speakers, Santander shareholders, and people whose surname is Buchanan or whose parents are pharmacists can all apply for money to help pay for their studies.

It is not too late to inquire about this last-minute funding, with many weird and wonderful scholarships on offer. Best of all, you do not necessarily have to be hard-up to qualify for them all.

Check out the Scholarship Hub (thescholarshiphub.org.uk) for more information or visit the websites that are listed below. But hurry — you may only have a few days left to apply.

READ THE REST (BEHIND PAYWALL) HERE

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Filed under Consumer Affairs, Student Finance

University challenge: why students must be brutal when choosing their degree

New students are just shaking off their hangovers from Freshers Week, but for their parents the worry about how to pay for university has only just begun. So this may be a good time to remind ourselves of the ‘great tuition fee disaster’, and what it might teach us about the importance of being financially calculating in this world – even as innocent youngsters.

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I vividly remember marching against the first turn of the screw, when the government allowed tuition fees to rise to £3,000, about 10 years ago. I was 16 years old and, even then, I failed to see why Labour would renege on its manifesto promise. How a fee increase could fit in with the relentless drive to push school leavers towards university. My parents were just as angry.

Ten years later and I feel much the same (as does my family), which is quite remarkable given that time could have softened our views.

Anybody with a son or daughter at university right now will know that sinking feeling when their offspring received the all-important acceptance letter. Pride can turn to horror when school leavers realise that they are shackling themselves to a debt potentially lasting decades if their course results in a decent job. It is small wonder that there is deep mistrust and cynicism towards the establishment as a result of how this area was thoughtlessly handled. Indeed, it went some way towards shoring up the nationalists’ mighty support among young Scots in the independence referendum. Students north of the border have been enjoying fee-free university education since devolution, to the chagrin of their English counterparts.

To cap it all, this whole wretched policy has turned out to be “financially unworkable”, according to MPs. The Commons Business, Innovation and Skills Committee recently warned that a whole swath of student debt would never be paid back, when the national budget needs every penny.

Decisions taken to ease the blow of higher fees – only tapping graduates for repayments when they earn above a certain threshold – are coming back to bite the government. For many young workers, salaries are not proving to be as handsome as we thought.

Meanwhile, the march of the self-employed could allow lots of debt to slip under the radar. Under the current student loan system in England, the government now loses about 45p on every £1 it lends. This is far higher than the 28 per cent originally predicted. Around 6 per cent of graduates leave the country, out of sight of the Student Loans Company.

But there is a silver lining. The student loan farce should concentrate our minds when it comes to picking universities. As I see it, a degree is not a universal human right – it is a transaction. A good degree is a sound investment. A dumbed-down, unrecognised qualification is essentially worthless. Let us not forget that universities are also commercial enterprises with a vested interest in selling us their products.

Read the rest here

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Filed under Economy, Employment, Politics, Student Finance

The vital opportunity totally missed by Zoella and other beauty vloggers

cOULD vloggers USE their immense INFLUENCE TO DISCUSS THE MATERIALISTIC PRESSURES FACED BY YOUNG PEOPLE?

IONA BAIN

It’s hard to comprehend a time when the internet didn’t completely dominate our existence. When I was a teenager, the internet was just in its infancy – viral videos and social media were but a twinkle in the eye. How things change. Take the gobsmacking influence of Zoella, for instance. Unless you have made a nice home for yourself under a rock in recent months, you will have heard lots about Youtube’s biggest hair and make-up ‘vlogger’. She has millions of subscribers, mainly in their teens, who idolise her beauty tips and obviously think the world of her.

So little wonder that an article in the Independent today, which criticised Zoella’s brand of “sickly sweet” feminism, provoked a furious backlash. Yet it alluded to a very real concern that we shouldn’t dismiss just because of Zoella’s undeniable achievements and commendable intentions.

Unlike the Indie journalist in question, I have no intention of personally criticising Zoella, who brings joy to many and has done much to raise awareness of mental health among teenagers. What I will say, in general, is that beauty vloggers alone take up an incredible share of young people’s attention these days, squeezing out space for other voices who could engage a whole generation on topics that are vitally important to their future – sound money management being just one.

I know what you’re thinking at this point. Who on earth would subscribe to a channel that talked about savings or debt? Isn’t it normal for teenagers to obsess about their appearance and go online for beauty tips? And aren’t I just “well jel” that the likes of Zoella can command such a huge following?!

You’d be totally forgiven if any of those thoughts crossed your mind. So let me tell you where I got all my kicks, and vital information about the world, during my adolescence – hopefully it will say something about the modern influences being brought to bear on teenagers and whether they’re conducive to healthy money management.

My parents were an essential source of advice when I was a teenager, whether that related to bullying over my hair colour or history homework. Yes, there were dreadful arguments and misunderstandings between us. But only they could help me to see through overwhelming peer pressure so I could develop my true talents and interests. My hormonally-hijacked social group also played a huge role, perhaps alarmingly so, in moulding my teenage brain, but given how my friends have grown up to be well-adjusted people who haven’t fallen off the rails, I don’t feel this was unduly harmful.

But still, how on earth did I spend my spare time if I couldn’t watch online videos about the perfect smoky eye? Well, we had these things called magazines and TV programmes – I believe they’re still around.

I remember buying Twinkle when I was REALLY wee (yes, that was a real magazine) before graduating to Girl Talk and then Shout. Apart from my friends and parents, these rather innocent magazines were my only source of information about hair, make-up and adolescent issues which I shall gloss over to spare our collective blushes. And you may not believe that I was an avid fan of Blue Peter, Grange Hill and Byker Grove for most of my school days – but it’s true.

But what about role models – what did I do before beauty vloggers and lifestyle bloggers came along? Well, I talked and listened to the people around me, picking up their wrong-headed views and cringeworthy mistakes along the way – my appearance and social interactions particularly bore the brunt of that painful process. I bought cheapo make-up with my pocket money, experimented with certain looks and looked a total prat most of the time. But all those missteps and experiments helped me grow. The sky didn’t fall in – I learned not to take it too seriously. Most importantly, I realised that I didn’t need to spend too much money to be happy in my own skin and pursue my passions.

So let’s talk about the opportunities missed by the likes of Zoella, who is undoubtedly very influential and has truly mastered the internet as a platform to reach teenagers. Couldn’t these role models use their position to talk about the materialistic, consumerist pressures faced by young people? Can’t they share nuanced, creative strategies for dealing with them?

Wouldn’t it be refreshing for a high profile vlogger to help their followers question why they spend in order to avoid storing up huge problems in the future? I’d love to see one endorse a more budget-focused approach to shopping where true, long-term value takes centre stage.

Let’s get one thing straight – nobody wants to watch dry lectures about finance. That’s why masterclasses on contouring rather than credit dominate our digital highways and byways.

I wonder, though, if many online gurus are prescribing certain products, brands and ‘looks’ in a relentless march towards an unrealistic and expensive form of aesthetic perfectionism.

Are they aware of how much it will cost their fans, in the long run, to pursue their looks to the same degree of professionalism? Are they advocating any cheap or free strategies to alleviate the financial burden that product ‘junkies’ would otherwise face?

Young people need all the help they can get to master their budgets and make their money go further. They need constant reminders to think for themselves, not accept the word of advertisers or brand ambassadors. They have to realise what THEY personally value in this world in order to become functioning adults.

So let’s hope greater financial education, officially on the English curriculum for the first time this year, will make teenagers think carefully about the messages flashing across their computer screens.

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Filed under Bargain hunting, Beauty, Blogging, Consumer Affairs, Personal Finance Education, Shopping

Good Money Week: Banking options that will ease your conscience (exclusive report)

Young Money is changing: we’re going to feature new young voices on the blog every month – original, engaging and fascinating posts from up and coming writers who have joined the Young Money mission. This week, we’re introducing David Graves, a rising young journalist who gives us his take on Good Money Week and how to manage your finances ethically…

By David Graves

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‘Choosing which bank to open a current account with can be confusing at the best of times.’ OK, so it sounds like a cheesy line from a TV ad, but it’s true. There are countless current and student accounts available, all competing for young people’s money.

As though it weren’t bad enough trying to figure out which bank offers the best interest rate, the least terrifying overdraft charges and the most helpful customer service, increasingly we also want to know our money will be used ethically.

The Great British Money Survey recently found that 58 percent of 18 – 24 year-olds would be unhappy if they found out their money was being used to fund unethical activities. And many banks are now capitalising on this trend by bigging up their ethical credentials.

“As a financial services group our direct impact on the environment in terms of climate change… is limited,” claims one. Another sells itself as “managing the climate change risks of our operations and those of our clients”. One even switched off the lights for an hour in offices across 51 countries to support the WWF’s Earth Hour campaign.

♥♡♥♡ Awareness can save the earth. (by Fulvio G.m. Vignapiano, Italy) ♥♡♥♡

posters-for-good.tumblr.com

That’s Royal Bank of Scotland, Barclays and HSBC respectively, all among the top 20 banks financing coal fired electricity and coal mining since 2005. With claims that sometimes don’t match up to reality, it can be really hard to figure out who is offering a truly ethical option.

Until recently the Co-operative Bank might have been the obvious choice. But following a calamitous year, the bank is now mainly owned by private investors, which include profit-hungry hedge funds – hardly renowned as stalwarts of ethical capitalism.

With Good Money Week in full swing this week, there’s never been a better time to investigate the ethical banking alternatives. Campaign group Move Your Money UK have made it easy to compare just how ethical different banks and building societies are, having devised a ratings system across a range of criteria.

So here’s the low-down on a few of the highest scoring current accounts and a look at some of the facilities young people use most often…

Save the earth it's the only planet with chocolate

Reliance Bank

Reliance Bank, originally called The Salvation Army Bank, are committed to “stand out as a bank with a Christian and ethical conscience” and to generating income for the Salvation Army.

Reliance won’t deal with companies “involved in the manufacture of armaments, alcoholic drinks or tobacco products, repressive entities or those who do not respect human rights or do not operate in a socially responsible manner” according to their annual report, and Move Your Money awarded them 92/100 for their ethics. They also received full marks for customer service.

Their current account offers 0.05% interest on all balances – modest, but better than many major high street banks – and a debit card and online banking are available. They don’t provide any credit cards, but that may be a blessing in disguise! Planned overdrafts are charged at 5.5%, and unplanned at 12.5% (plus a £10 fee for going over the limit).

While some might not be comfortable banking with an overtly evangelical organisation, the combination of good service and a serious ethical commitment make for an appealing option.

Islamic Bank of Britain

In a similar vein, the Islamic Bank of Britain runs an ethical investment policy in line with Sharia Law and will not invest in many speculative financial instruments. However, this also means they don’t offer any interest and no overdraft facility is available.

Metro Bank

Metro Bank, a relative newcomer to the market, has 26 branches in the Greater London and plans to have more than 200 across London by 2020. Accounts have to be opened in branch, but once it’s set up the bank offers a debit card, online banking and a mobile app – so if you really want an account and don’t live nearby, you could try and squeeze in some sightseeing and a West End show to make a holiday of it.

Although it’s free to open an account with Metro Bank, their current account doesn’t offer any interest on your deposit. Overdrafts, both planned and unplanned, are currently charged at an annual rate of 15% with a £10 charge for each transaction beyond your overdraft limit, up to a maximum of six transactions.

There’s little in the way of direct customer control that you might get with a mutual or building society, but they scored 92/100 for ethics were rated “highly for running an honest and tax-haven free operation that received few fines or complaints” according to Move Your Money. The Ethical Consumer group ranked their current account as the most ethical offered by a bank in the UK.

Nationwide

You might also consider a mutual, such as Nationwidewhose current account was ranked one place below Metro Bank by Ethical Consumer.

With the FlexDirect account guaranteeing 5% interest on deposits up to £2500 for the first year (dependent on depositing £1000 per month) they offer a considerably better deal than many others. The account also offers a 12 month interest free overdraft facility – but beware the 50p per day overdraft fees that follow after the first year. They also have branches across the country, making them more convenient than many other locally based building societies.

However Move Your Money deducts points from their score for fat-cat levels of executive pay and involvement in the PPI misselling scandal. That said, with the vast majority of their investment focused on loans to individuals and companies to buy property, they score a high 92/100 score for ethics.

And the rest…

There are many other smaller mutuals that are well worth looking into, such as the Cumberland Building Society and Coventry Building Society, but be aware that accounts with some are restricted to local residents and others don’t offer debit cards. It can also be difficult to deposit cash if you don’t live near a branch – if you’re paying cash in regularly, make sure to check where the nearest branch is.

It might also be worth bearing in mind that the much lauded Triodos Bankwhich actively seeks out ethical investments, rather than just avoiding shady ones – plans to launch a current account in early 2016. If you want to your bank to be proactive in its approach to ethics, and are in no rush to switch account, then it may well be worth the wait.

In the meantime, why not kick off Good Money Week by exploring some more ethical banking options and finding the one that suits you.

We’ll be hearing more about David and his personal take on money management in weeks to come…watch this space!

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Filed under Banking, Consumer Affairs, Ethical Finance, Personal Finance, Savings Accounts

Can we take care of the world while taking care of our finances?

IONA BAIN

You don’t need to go all hippie to care about ethical finance…

SCOTS are being asked to consider the moral implications of their financial decisions as part of a national drive to encourage ethical saving and investing.

Religious leaders, entrepreneurs and financial advisers are supporting Good Money Week, which kicks off tomorrow, in the hope it will bolster their efforts to create a more virtuous financial system in Scotland.

The Church of Scotland is galvanising its ministers to preach about the initiative, having held a high-powered conference in Glasgow earlier this month to raise awareness.

Scott Murray, director of Edinburgh-based Virtuo Wealth, said: “The public debate about ethical finance is finally filtering down towards the retail market. Consumers routinely ask whether they should buy fair trade chocolate, so why not do the same with their Isa?”

Julian Parrott, partner at advisory firm Ethical Futures in Edinburgh, said the campaign’s change of name from Ethical Investment Week heralds a greater awareness of banking, insurance and saving options for conscientious consumers.

He added: “There is also a nascent market in social impact investment as well as community and peer-to-peer investments, particularly with a focus on environmental projects.”

Indeed, investors can now support worthy businesses directly through Crowdcube, a crowd-funding site which has just set up its first office in Scotland.

READ THE REST HERE

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Filed under Banking, Consumer Affairs, Ethical Finance, Pensions & Retirement, Personal Finance, Savings Accounts