Cash

[anonymous-user]

Julia121 said:

I'm a Cognitive Psychologist with an interest in Human Factors Engineering.

"Spock - analysis please!"

[xeny]

bhstewie said:

God knows what I'd ever use it for though which is sort of the point of the thread i.e. what sort of buffer/cash reserve does everyone else have

I have 1 months pay as cash - some at the house, some elsewhere, so if the entire electronic banking system dies I've got something.

I have another month in my current account - so if my employer fails to pay me for some reason I've got a breathing space.

After that, everything is generally in assets of varying liquidity. If I can't liquidate any of them within two months then I've probably got bigger problems than running short of cash.

I've got a reasonably long notice period, and my employer is very unlikely to be unable to make payroll, so my largest concern is banking system problems.

If the roof blows off, then it gets replaced on the credit card and I decide at my leisure what assets I liquidate to pay it off.

[Wacky Racer]

anonymous said:

[redacted]

[mikeiow]

anonymous said:

[redacted]

My 6 months 'cash in hand' money *is* in Premium Bonds!
Generally get a little over 1%, but can get my hands on it in 2-3 days if needed.
A couple could have up to £100k stored there - how much do you need?!

[Julia121]

rockin said:

Julia121 said:

I'm a Cognitive Psychologist with an interest in Human Factors Engineering.

"Spock - analysis please!"

Very crudely how your brain's thinking side works. For example if you wanted to get through a door and it had two separate signs on it 'PUSH' and 'PULL' you'd probably choose the action suggested by the sign nearest the door handle, even if you can see it's probably wrong. Your brain would have decided the closest sign to the door handle is the correct instruction to open the door. A Human Factors Engineer would design stuff with these 'thinking habits' in mind so stuff is simpler and easy for us to do.

So, OP and their I've got too much cash problem......

[Julia121]

mikeiow said:

anonymous said:

[redacted]

My 6 months 'cash in hand' money *is* in Premium Bonds!
Generally get a little over 1%, but can get my hands on it in 2-3 days if needed.
A couple could have up to £100k stored there - how much do you need?!

I've no experience of Premium Bonds are they open weekends, bank holidays etc?

[Simpo Two]

Julia121 said:

I've no experience of Premium Bonds are they open weekends, bank holidays etc?

Which tallies so well with the Harry Enfield video it's obviously a test and I'm going to bite...

'The subject of Bonds, and whether or not they are deemed Premium is highly complex matter, requiring Advanced Mathematics, and is therefore far beyond the grasp of the fairer sex whose time would be more appropriately spent deciding what type of kitten to buy. However if you wish to ensure that the contents of your beautifully embroidered purse are invested wisely then you may post it to me for safekeeping forthwith.'

(Don't hit me I was scriptwriting! - and knowing the way PH works you're probably a docker called Brian!)

[mikeiow]

Julia121 said:

rockin said:

Julia121 said:

I'm a Cognitive Psychologist with an interest in Human Factors Engineering.

"Spock - analysis please!"

Very crudely how your brain's thinking side works. For example if you wanted to get through a door and it had two separate signs on it 'PUSH' and 'PULL' you'd probably choose the action suggested by the sign nearest the door handle, even if you can see it's probably wrong. Your brain would have decided the closest sign to the door handle is the correct instruction to open the door. A Human Factors Engineer would design stuff with these 'thinking habits' in mind so stuff is simpler and easy for us to do.

So, OP and their I've got too much cash problem......

On Premium Binds - you can go online whenever, and withdrawals take about 3 *working* days. If I unexpectedly need a large sum quicker than that, then my life has gone badly wrong
They are not a great investment - average returns are around 1%, but the capital *is* guaranteed, and thus I think works for that "emergency cash" 3-6 months money

[anonymous-user]

Julia121 said:

I've no experience of Premium Bonds are they open weekends, bank holidays etc?

Now then, you sound a fact-based kind of person,

• Online withdrawals generally take 2 or 3 working days.
• The odds of a £1 bond winning a prize in a given month are around 25,000 to 1.
• The average return from premium bonds is 1.25%
• But you have to own them for a month before they get into the draw, which reduces the return
• And the monthly big prizes take about 10% of the "pot" further reducing the return for a typical investor
• You're far more likely to die suddenly in any month than to win the £1million (Chance of £1m win = 1: 43,000,000,000)
• And although the prizes are tax free this won't be a benefit benefit unless you've already used your annual tax free interest allowance.

The alternative is to put your money in the bank at the best "instant access" rate you can find - currently around 1.1% (and buy a lottery ticket once a month if you want to dice with Lady Luck).

[bitchstewie]

xeny said:

I have 1 months pay as cash - some at the house, some elsewhere, so if the entire electronic banking system dies I've got something.

I have another month in my current account - so if my employer fails to pay me for some reason I've got a breathing space.

After that, everything is generally in assets of varying liquidity. If I can't liquidate any of them within two months then I've probably got bigger problems than running short of cash.

I've got a reasonably long notice period, and my employer is very unlikely to be unable to make payroll, so my largest concern is banking system problems.

If the roof blows off, then it gets replaced on the credit card and I decide at my leisure what assets I liquidate to pay it off.

I couldn't be comfortable with "only" a month or two I know that but appreciate you may be.

I've always been of the mentality of don't use credit cards when you have cash but perhaps that's something to explore.

I think the one thing that comes through on this thread is that unless you're literally a millionaire that sort of "cash" bank balance isn't normal or useful.

I'll look at dropping a bit more into the ISA tomorrow I think.

[Jasey_]

bhstewie said:

I've always been of the mentality of don't use credit cards when you have cash but perhaps that's something to explore.

Since I was about 20 I have used a credit card for everything and pay it off at the end of the month in full.

Using credit cards for all household expenditure has benefits - even now you can get £125 free money from Amex (https://www.americanexpress.com/uk/credit-cards/platinum-cashback-credit-card/)

As for "cash" - Keep a month's liquid (bank account or under the bed), keep 3-5 months in a cash ISA, keep the rest in SIPP/Premium Bonds/Longer term investments.

[mikeiow]

Jasey_ said:

bhstewie said:

I've always been of the mentality of don't use credit cards when you have cash but perhaps that's something to explore.

Since I was about 20 I have used a credit card for everything and pay it off at the end of the month in full.

Using credit cards for all household expenditure has benefits - even now you can get £125 free money from Amex (https://www.americanexpress.com/uk/credit-cards/platinum-cashback-credit-card/)

As for "cash" - Keep a month's liquid (bank account or under the bed), keep 3-5 months in a cash ISA, keep the rest in SIPP/Premium Bonds/Longer term investments.

Absolutely that bold bit for us too!

Particularly in the “new normal” world we now inhabit - I avoid cash almost entirely now!

On that last line, my version would read Keep £50 cash around the house, keep a grand or two in bank account to access, keep 3/6/12 (depending on your desires) months in Premium Bonds, keep the rest in SIPP/Longer term investments.

I would also have multiple credit cards or similar in case of a problem specific to one....and multiple accounts too....there is a little interest to be had on some accounts, ya know!

[bitchstewie]

I'll have a look later but any suggestions on a simple credit card where I can just set it up so it pays automatically each month unless I tell it not to?

Just to clarify too I don't mean I walk around paying with literal cash I still literally have the same tenner in my wallet that I had in February

I mean debit card.

[Jasey_]

bhstewie said:

I mean debit card.

I can count on the fingers of 1 hand the number of times I've used a debit card other than getting cash out of the bank (and 4 of those were because I picked the wrong card out of my wallet).

Debit card is for emergencies only.

Especially if you have a load of wonga in your bank account !!!

[Aiminghigh123]

Interesting reading.

A friend of mine semi retired at 48 from banking now has property plus stocks and shares as his main investment. He was earning around £100k a year in banking not a huge salary when I know he is worth few million at least.

His big risk was he purchased a house at the time when lending was at its highest. Got a massive mortgage which he could barely pay. Rented out 2 bedrooms to help pay the mortgage off. Anyway he ended up selling it and made over a million in profit in 6 years.
When I asked him that must look good in your bank he said nope my bank balance is always 0. He invests everything and spends everything on credit then just pays that off when it’s due.

I can’t live like that personally, I always have to have a bit in my account for a rainy day. I see the point of why having large sums of cash is pointless.

Edited by Aiminghigh123 on Sunday 5th July 10:20

[bitchstewie]

Jasey_ said:

I can count on the fingers of 1 hand the number of times I've used a debit card other than getting cash out of the bank (and 4 of those were because I picked the wrong card out of my wallet).

Debit card is for emergencies only.

Especially if you have a load of wonga in your bank account !!!

Are we talking at cross purposes?

I have too much cash in the bank.

I don't walk around paying with cash I use a debit card so it comes directly out the bank.

I thought that was behind the suggestion from some people to use a credit card to cover possible emergencies.

I'm not going to start walking around like Harry Enfield slapping tenners in peoples palms

[Jasey_]

bhstewie said:

Jasey_ said:

I can count on the fingers of 1 hand the number of times I've used a debit card other than getting cash out of the bank (and 4 of those were because I picked the wrong card out of my wallet).

Debit card is for emergencies only.

Especially if you have a load of wonga in your bank account !!!

Are we talking at cross purposes?

I have too much cash in the bank.

I don't walk around paying with cash I use a debit card so it comes directly out the bank.

I thought that was behind the suggestion from some people to use a credit card to cover possible emergencies.

I'm not going to start walking around like Harry Enfield slapping tenners in peoples palms

Not at cross purposes .

If someone steals your debit card details they will steal YOUR cash.

If someone steals your credit card details they will steal the Credit Card company's cash - unless you have been negligent.

This is the reason I do not use my debit card for anything other than accessing my cash.

[bitchstewie]

Jasey_ said:

Not at cross purposes .

If someone steals your debit card details they will steal YOUR cash.

If someone steals your credit card details they will steal the Credit Card company's cash - unless you have been negligent.

This is the reason I do not use my debit card for anything other than accessing my cash.

Ah yes with you now.

That's covered as the bulk of it is in an account that doesn't have a card associated with it.

[mikeiow]

bhstewie said:

I'll have a look later but any suggestions on a simple credit card where I can just set it up so it pays automatically each month unless I tell it not to?

Just to clarify too I don't mean I walk around paying with literal cash I still literally have the same tenner in my wallet that I had in February

I mean debit card.

Most, if not all, credit cards let you set up the payment to clear automatically every month. Mine always have.
In essence, I guess I view the credit card as 'cash' - I wave it (contactless on small amounts except for the occasional time they decide they need the PIN), then on the 8th of next month, the monies spend are cleared from my bank account.

For my 'kids', they use Monzo as their 'cash card' - they figure out what they need for the week (could be month), move that from bank account to Monzo....if they run out, they stop spending. Phone app for Monzo dead easy to use. A very basic way to budget, but for a young person, that seems to work (I know you're not a young person, just an example of one way to use cards/cash).

[Jasey_]

bhstewie said:

Jasey_ said:

Not at cross purposes .

If someone steals your debit card details they will steal YOUR cash.

If someone steals your credit card details they will steal the Credit Card company's cash - unless you have been negligent.

This is the reason I do not use my debit card for anything other than accessing my cash.

Ah yes with you now.

That's covered as the bulk of it is in an account that doesn't have a card associated with it.

The other thing is the ballache knowing someone has your bank details from your card.

If one of my credit card accounts becomes compromised I really couldn't give a st - cancel it and get another one .