Finance Friday | luck of the draw

Next Friday there is a Euro-millions draw and although the odds of winning the jackpot are over 100 million to one; we have a better chance in the UK Millionaire raffle. That will be creating 100 new millionaires next week and the odds are better. I think I will buy a ticket for that! I might be lucky!

There is a lot going on in the world of economics and finance. We have more quantitative easing in the UK and the Bank of England is printing more money. Petrol prices did drop, but they seem to be creeping up again. Food prices are still rising faster than the rate of inflation. Inflation is said to have dropped, mainly because the government hasn’t put any taxes up; they did a U-turn on the pasty tax.

Over in America, farmers are having problems because of drought and world foods prices are rising as a result. Over this side of the pond we have too much rain affecting vegetable harvesting and prices. It seems there is a global shortage of organic milk too. I never have dairy and so won’t worry too much, but as people switch from organic to ordinary it could trigger higher overall milk prices.

I had an invitation from Vanquis Bank to apply for one of their credit cards. The lowest interest rate (for purchases) was 19.94%, the highest for cash was 91.08%. These numbers were in the small print of course. At first I felt insulted that they would think I was so desperate as to accept these rates. I have a couple of credit cards with lower rates than their minimum rate and less than half their typical rate of 39.9%. I now realise that it is them that is stupid for thinking I wouldn’t read the small print and find these rates obscene.

It seems the IMF now think the government has cut down too much. It isn’t just cutting down, it’s where the cuts have been, that is the problem. Throwing more money at the economy won’t help, it has to be targeted to need. We still need tax avoidance schemes looked into and also executive pay and bonuses. The government could put money into social housing, because there is a real need to solve that problem. Affordable housing for young people to rent and for retired people who need something smaller and maintenance free would help.

All we can do in the meantime, is shop around for bargains and buy what we need. We should also resist the temptation to buy what we want, but don’t need, unless we can easily afford to do so without borrowing or credit. We can also recycle things like packaging. Turn those plastic meat trays into seed trays. Empty jars can be recycled into sweet jars; just spray paint the lids with gold paint. Even old towels can be made into face clothes. Old clothes can be recycled by altering them. Old furniture can be restored and made perfect again. Whether we survive this recession is the luck of the draw, but we can at least try not to waste money paying interest on  unnecessary loans and credit. 

You can also look at alternatives to saving, I chose Zopa. I get over 5% with Zopa even though I only lend to borrowers with good credit ratings. There is a link to Zopa in the side bar. They also do loans with reasonable fees and interest rates.

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• Finance Friday | Being British (mike10613.wordpress.com)
• Peer-to-peer lending: How to borrow from and lend to ordinary people (confused.com)
• Peer-to-peer lending – the answer to the UK’s Business Credit Crunch? (premierlinedirect.co.uk)

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