The Cooperative bank
I opened an account with the Cooperative bank about six months ago, I got fed up with the other major uk banks as they were not being very understanding during the harsh times and relied only on a computer credit score to assess your eligibility for lending. So I opened a privilege bank account with the COOP which was probably the best banking move I have done so far, they have a sort of systems that assess you internally regarless of your credit profile with the major credit reference agencies like experian which sometimes make mistakes and have the wrong information about you.
I was trying to look for a loan to consolidate my other credit cards that have run out or 0% transfers and purchases, now the credit card companies were charging on average 20%-30% on the balances, I started struggling keeping up with the high interest payments and was getting very stressed.I have tried my other bank First Direct which has a very good customer service but they also depend on outside agencies to judge your financial position, so could not get a loan from them. When I rung the COOP they advised me that they could offer me a £10k loan because I have maintained my account properly and have shown that I can manage my finances properly and will lend me without having to go to credit agencies. I was thrilled as I paid off the high interest credit cards and can manage my budget every month properly and being self employed it makes life much simpler.
Management of Cash
Most businesses or people will hold certain amount of cash as part of the total assets held. The amount of cash held, however, may vary considerably between businesses and people.
For a person, it is generally advisable for them to hold at least 10% of their income in cash in the bank. This is not for investment, it is cash for long term savings. No risk should be attached to this savings. This is retirement money. In UK many people who invested in pensions have seen the value of the pension go down or disappear because of the financial crisis.
A business may decide to hold at least some of its assets in the form of cash in order to meet day to day commitments a business requires a certain amount of cash. Payments in respect of wages, overheads, goods purchased and so on must be made at the due dates. Cash is the lifeblood of a business. Unless it circulates through the business and is available for the payment of maturing obligations, the survival of the business must have sufficient cash to pay its debts when they fall due.
When cash flows are uncertain for any reason it would be prudent to hold a balance of cash. A customer which owes a large sum to the business may be in financial difficulties. In this situation the business can retain its capacity to meet its obligations by holding a cash balance. Similarly if there is some uncertainty concerning future outlays, a cash balance will be required.
Having cash puts you in a position to exploit profitable opportunities when they arise. A business may be able to acquire a competitor business which suddenly becomes available at an attractive price. Holding Cash has an opportunity cost for the business which must be taken into account. Thus when evaluating the potential returns from holding cash for speculative purposes, the cost of foregone investment opportunities must also be considered.
If a business is able to borrow quickly at a favorable rate then the amount of cash it needs to hold can be reduced.
Getting Married on a Credit Card and a Personal Loan
A friend told me he is planing to get married last week. My first question to him as a financial planner was, how much money have you saved for the wedding? Well I don’t have anything saved yet?, I said well, when do you plan to get married? he said, probably a years time. I asked him, how much was he planing to set aside each month, he said probably £500 – £1000. Anyway to cut a long story short, his girlfriends idea of a wedding was going to cost them in the region of £35,000 – £40,000 including the honeymoon. The bride and groom to be had no savings but a good credit rating and no debts, they did plan to save around £20k and borrow the rest.
My question is, is it o.k to borrow for a wedding as it is a once in a lifetime occasion or should we live with the proper rules of borrowing, whereby we do not take loans for anything other than property and education? Should we include weddings as a long term profitable investment or should we look at it as a liability? I know there will be many school of thoughts to this.
I personally think it is o.k, otherwise the lady in the marriage will live her entire life thinking she did not have a ‘proper’ wedding, this will cost the guy more on holidays and anniversary celebrations through out the course of the marriage. I also think getting married and being in marriage is an investment but needs to be carefully planned, a working couple can often earn and have a better choice at investing in property. Lets face it a guy earning £30k a year as a bachelor will probably spend the most of it on entertainment, where else if he is in a marriage he is more likely to think about savings and investments.
