How to start saving when you’re broke
🔸 Plus: Madonna sued by her own fans for being late 🔸 Hinge founder says the app doesn’t judge your looks 🔸 Turkish barbers are taking over Britain.
Hello! Here’s today’s 2-minute guide to demystifying money and making you richer
The easiest way to start saving when you’re broke.
Madonna was sued by her own fans for not starting a gig on time.
The founder of Hinge says the app doesn’t judge people on their looks. Sure.
Reddit IPO is coming in March.
Yes, Britain really does have a lot of Turkish barbers. Here’s why.
The collapse of the P Diddy / Puff Daddy / Sean Combs empire.
Coinbase told a judge that owning crypto was like owning Beanie Babies.
Railway station ticket machines sometimes charge you double.
There were snakes on that plane!
Check out the first-year salaries at big consultancies like McKinsey and Deloitte.
Yesterday’s markets
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The easiest way to start saving when you’re broke
It’s all very well telling people they need to save money for the future. But what if you’re broke? How do you start?
We got you.
There are ways to force yourself to save, automatically, so that you don’t know you’re doing it, using very small sums of money.
You can have the robots do it for you.
‘Round up’ accounts: the power of loose change
In the old days, people saved money by dropping their loose change into a jar at the end of the day. You’re parents probably did this.
Today, via the magic of the internet, you can make sure all your “loose change” goes into a savings account in a way you’ll barely notice:
They’re called “round-up” accounts. They work by using apps to round up any money you spend via your card or phone to the next nearest pound, and then sweeping that loose change into a savings account. Spent £3.45? The app will send 55p (the difference between £3.45 and £4) to your savings.
There are lots of different ones to choose from and they all have different features, so you’ll need to spend a little time on the internet doing some research to find out which one is right for you.
Some of them round up whatever you spend and send the difference to a separate account. Others take a fixed weekly sum and move it out of your current account into savings.
More sophisticated versions employ an algorithm to decide for you how much you save — without you having to think about it.
One offers a “52-week challenge”, which increases your savings by £1 every week for an entire year — so you save £1 the first week, £2 the second, and so on, until the final week of the period when it will sweep £52 into a savings account.
By the end of the year you will have saved £1,378 if you do this.
Some of them work via an app you can download onto your phone and attach to your bank account. Others require you to open an account with their bank and use their debit card as your prime method of spending.
Companies offering “round-up” accounts include: Chase, Monzo, Plum, Moneybox, Chip and Kroo.
Let the robots do the work
The crucial thing is to make sure you now have a robot doing everything for you — moving money into savings without you even thinking about it.
Automating your savings habits is one of the healthiest things you can do. The less time you spend worrying about your money, the better. And the key to saving, as you’re going to hear over and over from Moneyin2, is to create the habit of saving, every week, every, month, every year, until you get where you want to go. It doesn’t matter if you are only saving tiny sums at first — it is the lifelong habit of saving that is the important part.
Of course, if you don’t want to change your bank and want to do it the old-fashioned way, you can just set up a direct debit from your regular current account to move a fixed sum into a savings account every month.
Watch the fees
There are pros and cons to each one. Some services charge you fees for helping you save, and those fees can be imposed “per sweep”, per month, or as a percentage of the cash you save. So read the small print carefully.
We would not recommend you use a service that charges you to save — a simple direct debit to a savings account will work for free. But if you have terrible habits and your round-up savings are going into an account that has a decent interest rate, then it might be worth considering.
Some of them offer free services — but generally require you to save in their accounts, so you get a little less flexibility.
This is how rich people become rich
Successful people are not literally sitting down in front of their bank accounts every month and laboriously moving money into savings and investments. Rather, they’ve signed up for their workplace pension plan (which automatically moves a percentage of each payday into their pension) or they have a direct debit regularly moving money out of their current account and into an ISA, SIPP, brokerage, or high-rate savings account. Copy their behaviour!
Automating your savings is one of the secrets of building financial independence, security, and wealth. Skimming off your own loose change is an excellent first step if you’re new to the game.
And for dessert …
Madonna was sued by her own fans for not starting a concert on time. The gig was supposed to begin at 8.30pm but Madge didn’t appear until 10.30pm! Once she was done, fans were left stranded with no way home. Tickets at the Brooklyn venue started at $125 a pop.
The founder of Hinge says the app’s algorithm doesn’t judge people on their looks. Riiiight. “We don’t really have an attractiveness score,” Justin McLeod told Fortune.
Reddit IPO is due in March. The “front page of the internet” was valued at $10 billion a couple of years ago. Now it’s going to find out how its shares will fare when traded by the public.
It’s not just you. Britain’s high streets really have been overrun by Turkish barbers. Sedgley in the Midlands (pop. 12,000) has 21 Turkish barbers. And they all offer the same haircut: The fade. It’s what men want, they say in their defence.
An interesting longread on the collapse of the P Diddy / Puff Daddy / Sean Combs empire. He was a nightmare in meetings, apparently.
Coinbase told a US judge that owning crypto was the same as owning Beanie Babies. Spoiler alert: Owning crypto is nothing like owning a stuffed toy.
Railway station ticket machines sometimes charge you double. Suspicions confirmed! It’s almost always cheaper to buy tickets online, according to the consumer group Which?
There really were snakes on that plane. There was an extra passenger on a recent Thai AirAsia flight, slithering around in the overhead luggage compartments.
Look how much you can make in your first year at the big consultancies. First-year post-grad salaries start at £85K. With bonuses, McKinsey can pay up to £147K.
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Photos: Ed Van-West Garcia, Flickr; Marco Verch, Flickr; Richie Diesterheft, Flickr.