It’s entirely understandable that people should be sitting on their wallets at the moment. The credit crunch, volatility in share markets and falling house prices have driven a lot of us to keep our money in cash and personal financial and budget planning has been put aside by many Britons. As readers of previous posts will know, we here at Walletwatcher think cash is a wise and prudent idea … at least in part. But you HAVE to remember that inflation, for so long ignored as merely an historical fact of the UK financial landscape, is back. Even hovering between 2 and 3% a year, it makes for a steady erosion of your savings. You HAVE to have a vehicle that’s delivering you growth each year, and if you can get that growth tax free, then your savings will compound all the quicker.

That’s why, when the UK Government offers you a tax-free savings vehicle, you should grab it with both hands, and there are a few around. Here are our top ten ways to snaffle something back from the Chancellor.  Put money into your pension pot – lower rate taxpayers get 20% back, while higher rate payers get 40%. So for every £60 you put in, the Exchequer will make it up to £100. Those over the retirement age should investigage immediate vesting pensions. Use your ISA allowance of £7000 a year, for shares or (if you really are cautious) for cash. Transfer assets to your husband or wife, thus reducing your tax exposure. Give money away (gulp) to dodge inheritance tax.

Check you’re on the correct tax code, and while you’re at it, ensure you’ve filed a tax return. It MAY be a pain, but it gives you the opportunity to really work through your tax position and checking you’re getting and claiming all your entitlements. Investigate ways to minimise your exposure to Captital Gains Tax (CGT); the rules on taper relief change in April 08. Claim back Gift Aid on charitable donations – you won’t get the extra cash but your charity will. Similarly, investigage Salary Sacrifice, whereby you can forego a chunk of pay but have it paid as tax-free childcare certificates, for example.

Okay, each week I’m going to be plucking a plum financial deal from the monetary cybersphere that I think subscribers and readers to Walletwatcher should be getting into. Sometimes they’ll be excellent savings accounts, sometimes a particularly interesting credit card deal, and sometimes a source of free money or other giveaways … hard to believe but yes they are out there. But this week, being a once-a-year occasion, the end of the financial year, there are some particular things you should be looking out for. Our financial deal of the week is ‘ISAs’. Yes all of them. If you did nothing else you should ensure that you have used your ISA entitlement as it’s one of the very few tax-free savings vehicles UK Government gives you. If you have no idea how they work or even, shamefully, you’re not entirely sure what an ISA is, then read my idiots’ guide to ISAs. Okay, I’m assuming you’re back now, suitably fired up and with your credit and debit card at the ready, so where do we start?

With shares looking very volatile just now, cash is looking safer than ever before, but that doesn’t mean you should be earning zero interest on your ready money. There are some excellent deals on cash ISAs just now, with some of the banks and building societies offering rates north of 6.3%, and these could look even better with the Bank of England set to cut the base interest rate still further this year. Watch out of course for conditions on whether your ISA account is fixed or variable rate. Check out more cash ISA best buys here. The other type of ISA is of course the share ISA, and it would be foolish not to use your allocation … providing you’re investing for the long term. Even the most volatile of markets shouldn’t be a problem for a broad basket of stocks held over the long term. Check out share ISA providers here.

The credit crunch is the phrase being heard everywhere just now. Most of us will never really grasp the problems afflicting Northern Rock, Bear Sterns and the rest and have no wish to dig into the arcana of the financial markets. But adverse credit problems UK become a reality when we try to remortgage, get a new credit card or even take out a personal loan. One painful option (and one that’s become foreign to the current generation of UK consumers) is to look at the other side of the personal balance sheet. Budgeting is back in fashion and that means seeing what fat can be trimmed from your monthly expenditure … rather than finding new ways to finance it.

The mantra to learn is ‘reduce, reuse, recycle’ which also chimes nicely with the ecologically aware mood of the times. Pretty soon your local council is likely to be charging you for filling or overfilling your dustbin anyway … pilot schemes around the UK are already seeing people moaning that their one bin a week is insufficient. You won’t save a lot of cash by producing your own compost from kitchen peelings rather than buying a bag of John Innes from the garden centre, but you COULD save hundreds of pounds a year simply by turning your central heating thermostat down a couple of degrees and running your washing machine at 40 rather than 60 degrees.

We can’t say it often enough to people suffering from adverse credit problems, but DO A BUDGET. How can you possibly steer a steady financial course if you don’t know how much you have to spend each month and how bad your problems currently are. So get all your bank statements, savings and the like together and work out what you’ve got and how much in debt you currently are. Then plot a route out of debt. It’s amazing how just doing a financial audit like this can start to reduce your spending … there’s nothing like realising you’re spending £2000 a year on takeaway curries to make you reduce your spending.

Remember too that debt is expensive. It’s not just a case of spending more than you earn each month (which is bad enough) but of servicing the debt that ensues. And most people who are profligate with their money aren’t going to be carefully seeking out the best credit card and loan deals either – so they are likely to be spending too much on interest charges. Maintain a credit card balance of £1000 a year at 12% (and such obscene interest charges are not unknown even in the  current climate of lower interest rates) and you’re spending a steadily compounding £126 a year just to service the debt.

So for goodness sake, look around for better credit card deals. If you’re too inept or lazy to do it yourself, then employ an independent financial adviser to look at your entire financial picture, but do get one that you pay rather than one who earns from fees on the products he sells to you. The former is obviously more independent and has no vested interest in flogging you certain products. This really IS one area where you should be spending MORE rather than less cash.

With ever more stories about global financial meltdown hitting the papers, property buyers and sellers in the UK can be forgiven for getting a little nervous. Do you sell? Do you buy? Will you even get a mortgage? But the one question you’ll be asking is ‘what about house prices in my street‘: the rest is irrelevant really.

One thing is for sure – this isn’t good news, and you’d be very hard pressed to find any financial commentator who will deny there is a fall in the housing market currently taking place. The bulls have gone out to pasture while the bears are growling about falls of at least 5 per cent this year. There’s an interesting piece ‘Will house prices fall?’ in the Daily Telegraph in which sentiment is remarkably consistent.

But … and it’s a big but. There is no such thing as the UK housing market. Those of us who’ve been buying and selling UK property over the last few years recognise all too clearly that this is an agglomeration of dozens, hundreds, even thousands of micro property markets. Suddenly, in early 2008, if the experts are to be believed, the market turned and now UK property prices will fall (across the board) by between 5 and 10% during 2008. Further, two-bedroomed flats are now in glut across the UK ‘you can’t give away two bedroom flats’ according to one Peckham estate agent I spoke to last week.

But here’s the thing. Many of these micro markets stalled at least three years back. Many have been falling for a couple of years. Others have been steadily rising. Some, to add confusion to this rich mix, have been rising while they SHOULD by any fundamental analysis have been falling.  Step forward two-bedroom ‘luxury developments in Thameside locations’ (Woolwich andSilvertown in other words). Investors have piled in, artificially maintaining the premium prices of apartments in resolutely non premium location. These will fall by … well it’s your guess, but I wouldn’t take a spread bet on less than 20%. Meanwhile, a nice Victorian conversion two-bedder in East Dulwich will hold its price pretty much – because they have fundamental, historic value and there aren’t a hundred of them in a block. They will fall for sure … but not catastrophically.

So we return. How much are house prices in my street going to suffer? Get the REAL information not the apocrypha. Much of this is historic of course so you’re finding out what HAS happened, but it’s still useful. We’re talking Land Registry figures and there are any number of websites now offering this service, including thisishouseprices.co.uk. But remember this is a broad brush. You can’t simply bang in ‘4-bed house in BR5′ and get a homogeneous answer. Some houses are nicer, some have been vandalised by owners who think Tudor cladding looks sweet on a fifties semi. Talk to estate agents. Use your judgement. And remember … a house is worth what somebody will pay for it, no more no less.

On this weeks personal finance podcast John Rennie gives personal finance advice on:-

• Save money on cosmetics
• For cheap contact lenses buy online
• Save money on gym membership
• Avoiding techniques that salespeople use

We want to hear from you, you can send your emails to walletwatcher@btpodshow.com.

This episode of Wallet Watcher is brought to you with GoDaddy and offers you great discounts on hosting and domain names. Use the following Wallet Watcher GoDaddy codes to save you money – wallet1 gets you 10% off domain name purchases and wallet2 gets you 20% off orders over £25. Some restrictions may apply, see the GoDaddy web site for more details.

Tags: for cheap contact lenses buy online, save money on cosmetics, save money on gym membership, personal finance

[DOWNLOAD MP3] | [RSS FEED] | [SUBSCRIBE IN ITUNES]

There are soft sells and hard sells, active sells and passive sells but one thing is sure – if you are buying a consumer durable, financial product or even a bar of chocolate, then you are being sold to.

Fair enough, you say. I want to buy stuff. So what are the advanced sales techniques and dirty sales tricks that salespeople use to close the sale, and to make you buy and spend more. Fore-armed you SHOULD be able to keep more of your cash in your pocket and only buy the things you need. We’re not going to lecture you on the power of advertising – only you can decide where what you ‘want’ blurs into what you ‘need’, but we can clue you in on some of the instore techniques that have been honed to perfection over the last 50 years or so.

First understand that every sale relies on a variation of AIDA. No, it’s not an opera, rather an acronym standing for Attention, Interest, Desire, Action. This is the classic sales structure that all salespeople have used on us since the 1950s. The attention bit is usually the advertisement that draws you into the store. The seller then builds interest by telling you how superior this or that car, MP3 player or washing machine is to any other on the market – and how it will change your life! Desire is then stoked up by a test drive, or a demonstration of all its whizzy new features.

This leaves us with ACTION. The close in other words. This is where they get their hands on your money. The close is the heart of the sale – the ability of the salesperson to confidently ask you for your money, knowing that you are so sold on the product that you won’t be able to say ‘no’. This can, in fact, come at ANY point in the sale if the salesperson thinks you’re already hooked. Another abbreviation hammered into these guys is ABC – it stands for always be closing; one of many successful sales techniques. And there are as many closes as brands of washing powder.

The important thing to remember is that you don’t NEED to buy anything. You ALWAYS have the option to walk away from a pitch, no matter how much time you or the salesperson has invested in it. Some of us, having endured a 20-minute demonstration of all the features of a new car feel embarrassed or guilty at saying ‘No thanks’. There are many of us who’ve walked away from a showroom having inked a contract and thinking ‘I didn’t want to do that’. Don’t worry about it. It’s not your fault for being polite though we would recommend some assertiveness training. DO REMEMBER that you have a 10-day cooling-off period under the Consumer Credit Act. So WHATEVER credit agreement you’ve signed, look at it in the cool light of day – then cancel it if you wish.

It might be an idea to avoid high-pressure sales environments. You decide you need a new stereo? Go to an online store such as Amazon and research various models. Look at the features, the respective prices, work out what you need and what you don’t. Take time over it. You should get a very solid idea of what you really need. You may even decide you don’t actually NEED it at all, but can get a cheaper model or make do with what you’ve got.

The only sales pitch you’re having to endure online is a list of the features – no pressure involved. Make yourself the boss of the process. Don’t watch TV ads, chuck away junk mail you receive, and terminate sales phone calls before they get into their stride. YOU have to be in control here.

Read consumer reports on the item you’re planning on buying. Online reviews are particularly good here – again I’d point to the peer reviews on Amazon. What you have to remember here is the salesperson’s key tool when getting to the close. It’s called ‘overcoming objections’. Pretty self explanatory really. You’re standing in the electrical showroom giving reasons why you can’t afford it, can’t decide or plain don’t want it. But a good salesperson will smoothly and confidently demolish your objections one at a time.

He’ll show you how much cheaper the item is than the competition. He’ll even show you how it will only cost you pennies a day. This is a common technique for reducing the apparent cost of extended warranties on consumer goods. For instance – a warranty on your £30 MP3 player will only cost you 4p a day. Whip out the calculator and you find that swiftly adds up to £15 a year. Remember it’s the FINAL cost of the debt that matters – not how cheap it is each week. That’s how you end up with debt and credit card problems.

He’ll tell you that the price is going up tomorrow, that it’s the last one in stock. So what? You don’t NEED it anyway. The figures and the sales pitch are designed to bamboozle, to make you feel unsure – this is where forearming yourself with figures is useful. One of my pet hates is the door to door sales techniques from the power companies. They WILL be able to demonstrate that their electricity or gas provider is cheaper than your current one, and you will become unsure of your ground. On the other hand, they COULD persuade you with their figures that black is white and the earth is flat. Just say NO!

If you still resist they may negotiate on price. That’s great – if you’ve already decided how much you wanted to pay. But remember – the automotive sales techniques of the car salesmen usually have a discount pre-decided, which they can toss in to sway tricky customers. If you’ve already been to a website that’s on YOUR SIDE, such as WhatCAR, you’ll have established a target price to pay – not just the headline list price. Remember – it’s your money. Hang onto it! I’ve put some links at walletwatchershow.com, with some of the WORST and most questionable sales tactics and ripoffs. Trust me – you’ll be shocked!

Tags: successful sales techniques, sales techniques, dirty sales tricks, advanced sales techniques

Gym membership fees, who needs them? If you signed up full of good intentions in January and are listening to this any time after March, you’ve probably forgotten what the inside of the gym looks like. Wondering when to cancel your wife’s gym membership? Send your termination of gym membership letter, save yourself the ‘affordable gym membership‘ £30+ a month then go out and get your shoes muddy in the park instead. Aside from saving you cash, a lot of fitness instructors reckon it’s much healthier to train outdoors. You’re breathing in fresh air instead of your neighbour’s sweat, and you can use the park benches for press ups and back presses. You could even join your local runners’ group which will be free and help you build motivation.

Tags: indoor versus outdoor exercise, outdoor exercise, affordable gym membership, gym membership contracts and your rights

Ever looked at your contact lenses and wondered ‘why do two small slivers of clear plastic cost £5’. Contact lens giants Johnson & Johnson and Bausch & Lomb have both faced legal cases in the US and been forced to admit there is little or no difference between daily disposables (costing around £1 a pair) and the weekly or monthly disposables, costing five times as much. As long as you disinfect properly you can simply use the dailies for much longer periods. And don’t simply return to your high street optician – they make huge mark ups on contact lenses so buy your contact lenses cheap online, here are two of the cheapest cometic contact lenses suppliers.

Links: Vision Direct, Contactlenses.co.uk

Tags: contact lenses, cheapest contact lenses, contact lenses cheap, buy contact lenses online

I don’t use a lot of cosmetics myself, needless to say, but there are numerous ways to save money on cosmetics which are fiendishly expensive. Top tips, we are told, include immersing your nearly empty bottles of nail varnish in water just off the boil, to loosen the last drops. Slice open plastic bottles and scoop the last of the goo out. And using a lip brush from your lip stick allows you to eke out the last of the tube. Marie Helvin, sometime supermodel and wife of David Bailey even recommends making your own body scrub with used coffee grouts and milk.

Links: Making your own body scrub

Tags: save money on cosmetics, natural cosmetics, all natural cosmetics, discount cosmetics, personal finance tips

When it comes to handling money, Pricewaterhouse Coopers is about as big as it gets in the London financial scene. and came about in 1998 with a merger of Coopers and Lybrand with Price Waterhouse, both London City firms dating back to the 19th century. Originally both accountancy firms, by the late 20th century they had mutated into a global accountancy/business management/consultancy firm, with their merger an attempt to keep pace with the other giants of the industry, such as Arthur Andersen. Worldwide revenues topped $25bn in 2007, with customers including four of the US’s ten biggest public companies, Ford Motors, ChevronTexaco, IBM and Exxon Mobil, and four of the largest in the UK – Lloyds TSB, Barclays, Royal Dutch Shell and GlaxoSmithKline. Pricewaterhouse Coopes audits 40 per cent of the companies in the FTSE 100 index (at a recent count) and 45 per cent of the Fortune 1000.

A common criticism of consultants is a variation of the ‘those who can do, those who can’t teach’ maxim. That those who can do business are in business … not studying for MBAs and then working as consultants. However, they’re obviously reasonably on the money Pricewaterhouse Coopers employees have moved freely to and from major positions in public and private companies. Alumni include James M Schneider, CFO of Dell, Frederick Henderson who is CFO of General Motors, and Peter Smith who chairs Savills estate agents. They are, perhaps unsurprisingly, lighter on entrepreneurs, though Min Zhu, founder of WebEx, is on the list.

For more see the PwC corporate website.