My month in money #15

What I’ve actually done this month to be clever with my cash.

There are a couple of thoughts behind this feature. Often there are small things I’m doing that don’t warrant a whole article so this can bring them together! Plus, it’s a great way to show that I “walk the walk” and really do follow my own advice!

So here are the key money matters from my own life in March 2023

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The mobile phone and SIM package trap

If you’ve been following me for a while, you’ll probably know that when I talk about mobile phones I suggest going SIM only rather than upgrading both the phone and calls/data in one bundle.

There are a few reasons for this. Primarily, most of the time we don’t need to change phones. There’s rarely any seismic difference between handsets released each year, and your existing one will no doubt be working fine.

And if you do need to upgrade, getting it from a mobile network in a contract usually comes with hidden extra costs. You’ll be better off using savings or 0% finance to buy the handset outright and shopping around for the cheapest SIM deal.

This will work out the cheapest 95% of the time. Occasionally though, you’ll find a deal where there could be savings buying them together. Often this is via third parties like comparison sites, and you might be able to combine it with cashback savings too.

This is what we did when Becky needed a new phone a year ago, stacking a few limited-time offers together to get a bargain deal. However, there’s often a potential catch with these offers.

And it’s that these third parties (and some networks) will combine the cost of the phone and the SIM in a single price as opposed to some networks which will split these two charges.

This becomes relevant in two scenarios. One is when the contract ends you need to be sure to change your deal otherwise you’ll keep paying for the handset even after your minimum term has cleared the cost. Easily avoided if you make a note in your diary for this date.

But this year the other scenario will prove particularly expensive – and it’s the annual inflation-linked increase. Though in future years it’ll be less, as I wrote about recently for most networks it’s between 14 and 17% in March and April this year.

For Becky’s O2 deal, at £35 a month, it means paying an extra 17.3% every month, or £6 a month. Until her contract ends in 12 months that’s another £72.

Double the monthly price (not unrealistic for the top-end handsets), and you’ll also double the price increase.

Compare that to an equivalent SIM-only price of £8 a month, and the monthly increase would be much lower at £1.38, or £24.61 over the next 12 months.

The initial deal was so good it still represents a significant saving for us, but I thought it was a good opportunity to highlight the risks of bundled contracts.

Using my ISA allowance

Last year was the first year since 2016 that I used more of my ISA allowance than just my LISA, and that was for investments rather than cash. But for the end of the 2022/23 financial year, I actually prioritised putting cash into an ISA too.

As I detailed recently, the increased rates available on savings elsewhere mean it’s much easier for those with a decent amount of savings to get closer to their personal savings allowance (PSA) limits.

But saying that, you will still need £30k saved up in the best easy-access account (Chip at 3.4%) to earn more than £1,0000 in interest. Even if, like me, your money is split across a number of the highest paying accounts such as a the First Direct and Club Lloyds regular savers and the Barclays Blue Rewards rainy day saver, you’d still likely need around £20,000.

However, I know that for 2023/24 I’ll actually be a higher rate taxpayer, meaning my PSA drops down to £500 for next year. And that means I’ll go above that with the mix of accounts I have.

So a Cash ISA is a must for me, and probably next year too.

I considered a three to five year fix for the ISA, on the assumption that we might see interest rates fall in coming years, but I have chosen an easy-access Cash ISA for this year. This gives me the flexibility to use it for investments at a later stage if I want – I’d just need to transfer the cash at some point. And if I do this, I won’t be impacted by the changes to the Capital Gains Tax and Dividend Tax allowances.

RBS switch experiment comes up trumps

The terms and conditions of the Natwest and RBS switch deals, which right now offers £200 for not much effort, clearly state that you can’t get the bonus from both banks. I had a bonus years ago from Natwest, so that ruled me out.

However, in the Facebook group, a few of you reported getting bonuses at both banks. Intrigued, I used a dummy current account (and old Virgin Money one I no longer need for savings) and met the other requirements.

And the result? After a few weeks £200 was paid into my new RBS account! I can’t guarantee it’ll work for you, but if you have a spare account sitting around and appreciate the short term impact on your credit score of a new application and closure of an old account, it might be worth a go.

A mixed experience of Too Good To Go

Years ago I tried the app Too Good To Go. It’s very simple. Shops and restaurants will sell mystery bags of goods at the end of each day for a few quid. The idea is you’ll take on stuff that would have otherwise gone in the bin, and they still get some cash.

My first experience wasn’t great. For £5 I got five blocks of vegan cheese and a huge jar of sauerkraut. It might have been a saving compared to the full price, but I didn’t want or need those items.

So I was excited to see that my favourite local bakery is now on the app. They released two bags each day (at least) and it took me a few days to grab one as they went immediately on release.

For £5 I got more than £15 worth of mixed items – a big loaf of bread, four pastries, four rolls and four muffins. All of which were still decent to eat that and the next day or freeze. Brilliant.

A few weeks later I tried again, but this time the selection wasn’t as useful. Two big loaves of bread and one pastry were decent (and we had room in the freezer). But in addition, and I think accounting for a third of the “rrp”, was a sandwich with horseradish, something neither Becky or I eat.

And that shows the risks of the app. The idea is to prevent food waste, but as you don’t know what’s in the bag, there’s always a chance you won’t like or want some of the contents. In this case I gave it to a homeless person I saw on the way home.

But I certainly think it’s worth a look. There are limited options where I live, but in bigger towns and cities there could be a larger variety of businesses and supermarkets taking part – and you never know you might get a bargain!

And the rest…

I can’t remember everything but a few extras in brief…

• I used my Asda Rewards credit, about £3, as I rarely shop there and it was approaching the 6 month expiration date
• I cancelled my Amex Platinum card after finally using the £150 dining credit for this year, getting a prorata refund on the remaining annual fee.
• I cancelled my Athletic subscription after the cheap deal ended, and was offered another 6 months at $2 (I’d signed up when I was in America), paying with my fee-free Chase card.
• I haggled my Virgin Media package down in price and up in speed after cancelling and getting a call back from their “loyalty team”