Hi savvy readers,
This blog post came about, due two entirely separate conversations I recently had, that got me thinking .
One was with my niece, she’s in her mid teens. Just about to start her lifelong relationship with money. Wondering if she should save for university , start up her own business, etc.
The other was with a lady who had recently become a widow. She was in her early seventy’s and found herself, having to take control of the finances . Paying bills, dealing with bank transactions, etc. All had left her feeling, isolated and another aspect of widowhood she had not considered or prepared herself for.
Both women although decades apart, were going on the same journey. Both had said to veering degrees , that it was at times, like people were speaking a foreign language. So I thought I would explain some basic finance terms.
Some info is bank related jargon and some maybe more life style but its all relatable .
Its not meant in any way to replace any advice of a financial expert or professional body. Should you feel you need advice from a financial expert or professional body please do so. ………… That said..
let’s talk “mula”
The contract governing your open-end credit account, it provides information on changes that may occur to the account.
Any and all persons designated and authorized to transact business on behalf of an account. Each account holder’s signature needs to be on file with the bank. The signature authorizes that person to conduct business on behalf of the account. This can also apply to a Joint Account Holder.
Annual Percentage Rate (APR):
The cost of credit on a yearly basis, expressed as a percentage., including interest, insurance, Often applied to mortgages, credit cards.
The balance of an account less any hold, uncollected funds, and restrictions against the account.
The amount of money in an account, equal to the net of credits and debits at that point in time for that account. also called account balance.
The process of moving an outstanding balance from one credit card to another. This is usually done to obtain a lower interest rate on the outstanding balance. Transfers are sometimes subjected to a Balance Transfer Fee.
BBP or BP.. Means Payment of a bill.
BGC Bank Giro Credit put simply ; The deposit of cash or a cheque in a bank branch.
CHC; Charge . A charge regarding a transaction. ( Always go through your statements .To make sure you’ve not been charged more then once. (I have on occasion found that when I’ve bought something from a home shopping channel on payments. They have inadvertently kept taking the payments when it been paid for it’s your responsibility .in fairness I’ve always been reimburse ,But why go through the hassle.? )
COR; Correction. Correction regarding a transaction error.
CWP; Cold Weather Payment. This is a Government payment to qualifying households during periods of cold weather. (Want to know if you may entitled to this ? Look at GOV.UK this site provides heaps of useful information. )
D/D or DDR; Direct debit. A regular payment of a fixed or variable amount to a third party or some savings accounts.
Put simply, a Direct Debit is an instruction from you to your bank or building society. It authorises the organisation you want to pay to collect varying amounts from your account – but only if you’ve been given advanced notice of the amounts and dates of collection.
Once you have agreed those, the money is deducted automatically. If the organisation you are paying wants to change an amount or date of collection, they have to tell you about it first.
DR; Account Overdrawn or Debit Item / Debit balance. ; An indication on your statement to show that your balance is less than zero. (There are independent agency’s that can provided advice on this matter.)
DWP; Department for Work and Pensions . Deposit paid into your account by the Department for Work and Pensions.
INT; Interest Credit or debit on your account associated to interest earned or incurred on your balance
OTR; Online Banking Transaction. Transaction carried out using online banking.
POC; Post Office Counters. Transaction carried out over a post office counter.
POS; Point Of Sale/Debit Card Transaction. A purchase made with your debit card.
SAL; salary; Salary payment paid into your bank account.
STO; Standing order; A regular payment of a fixed amount from your account to another account or a third party.
TEL ; Telephone Banking. A transaction carried out using telephone banking.
Just like we save for a special event a such as a weeding, replacement windows , house extension, whatever.
It can make you feel that bit , more confident knowing you have some money set aside.
I’ve found that once I started saving I became more aware of what I was spending my money on and became quite good at self auditing.
And if money’s short, look at baby steps . For example, saving just £3 a day adds up to £1,095 over a year.
A good rule of thumb is to have three months’ essential outgoings available in an instant access savings account.
So, if you spend £1,000 a month on mortgage or rent, food, heating bills and other things you can’t live without, you should aim for £3,000 in emergency savings. Its worked best for me to have a separate savings account.