CAP – taking care of the pennies

While I was at a conference in St Andrews I had the chance to go to a seminar run by CAP. They were basically taster sessions for their money management course. They gave some good advice on how to handle your money on a day to day basis. 

The basic idea is for everyone to be able to have three bank accounts. The household account was to be a joint account if you were married. The idea was to make sure that all that all your earnings went into this account and that all your bills were paid out of that account. They encouraged people to pay their bills automatically using either direct debits or standing orders so that you did not have to remember to pay them. This account paid an agreed amount into the personal account of each member of the household for their own spending money. This would be for things like food clothes and entertainment. It would also pay an amount into a savings account that would be used to save up for annual bills like insurance as well as to build up an emergency fund. This is very easy to set up if you are paid monthly but not so easy if you are paid four weekly. 

Of course a system like this still will not work if you do not have a spending plan or budget. Yet many of us do not have a strategy for how we will use our money. What is worse many of have no idea where our money is going and are too scared to even try and work it out. Ever worked out what you could afford if you stopped buying an item that costs £2 a day for 50 weeks a year. If you think about it £2 a day for 5 days a weeks comes to £10 and £10 a week for 50 weeks comes to £500. Put it like that and those newspapers and coffees may soon become a luxury rather than an essential. That is why they used to say if you looked after the pennies the pounds will look after themselves. 

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