Love Is Not Enough: A Smart Woman’s Guide to Money. Merryn Webb Somerset

shopping with a holiday: Outlet Firenze (www.outlet-firenze.com) near Florence offers discounts on labels from Gucci to Armani and is also pleasantly close to the Prada factory in Montevarchi.

      Current accounts: get them cheap

      Most people have a current account. We all get our salaries paid into them and then pay our mortgages, rents and bills from them. But very few people have given much thought to why they have the one they have and what they want from it. As a result 70% of people still bank with the UK’s four big high street banks – Lloyds, HSBC, Barclays and NatWest – despite the fact that they offer some of the worst accounts on the market. Even I had a current account at Lloyds until last year. Why? Because my mother was with Lloyds so when I opened my first bank account we automatically opened mine there too. I then, like most of the population, never thought about it again. I kept that account for 20 years.

      Then suddenly my cashpoint card stopped working while my husband and I were on honeymoon. I didn’t do anything about it at the time on the basis that no one should have to speak to a call centre when they are on honeymoon. But when I got back I called to complain. The reason my card didn’t work, I was told, was because I had ordered a new pin number. I hadn’t. It says here, said the woman at the call centre, that you have, so we have blocked your old one and sent you a new one. But you can’t have blocked it, I said, because I can still use it as a chip and pin card in shops and restaurants. No you can’t, she said. Yes I can, I said. And so on. This absurd saga went on for some days (getting more and more complicated with each phone call). We never established how the problem had come about but the final result was that I had no access to my accounts for well over a month and that I suddenly realized that having an account at Lloyds was a very expensive way to be inconvenienced.

      Why an expensive way? Three reasons. The first is that, like the other big high street banks, Lloyds pays practically no interest on current accounts (the average current account pays just 1.2% on your money). This is important because if it isn’t earning interest your money loses its purchasing power fast: if inflation is rising at 3% (i.e. prices are going up at an average rate of 3% a year) you need to make 3% interest on your money to be able to buy the same amount of stuff at the end of the year as at the beginning. If you aren’t making 3% you are effectively losing money. The second is that while I didn’t often get overdrawn it did sometimes happen, and Lloyds, again like the other high street names, charges interest of 17–18% on overdrafts. Other banks pay proper amounts of interest on their current accounts and charge as little as 7–8% on overdrafts. Finally I had a ‘premium’ account at Lloyds, meaning that I paid an extra fee every year for a variety of perks I never used (most current accounts are free of annual fees). Lloyds sent me a nice bunch of flowers to make up for all the confusion – something which made me feel a bit warmer towards them but wasn’t quite enough to compensate for all the other downsides to banking with them. I closed the account.

      The sales: one big scam?

      We all love the sales. We think we are getting fabulous bargains. But we probably aren’t. The retailers think of sales as just a way to get you into their shops so they can flog you more overpriced rubbish than they can at non-sale times: there are so many loopholes in the laws covering the sales that whatever they say in their windows they can get away with not producing much in the way of discounts inside. For example, by law any goods marked with a reduction must have been for sale at the full price displayed for 28 days at some point in the previous six months. However, the stores are also allowed to put up a disclaimer in little letters somewhere in the premises saying that hasn’t actually been the case (that it has only been for sale at that price for one day, for instance) so you can never be sure whether you are paying a properly discounted price or not. Shops are also guilty of occasionally putting things out at stupidly high prices for 28 days so they can slash them to an OK price but call it 80% off a few days later.

      But that’s just the beginning of the tricks they’ll use to draw you in to the shops and get your wallet open. Rails of substandard items are often brought in just before the sales so they can be marked at very cheap prices near the door. Retailers will also put up signs all over their windows saying ‘up to 70% off’ when in fact almost nothing inside is that cheap. The law says 10% of goods on sale should be at the maximum stated discount but who checks? No one. The fact is that sales are a great time for shops to shift their old, substandard, out-of-fashion or obsolete stock. So before you succumb to bargain fever check whether the frock you are feverishly fingering is really a bargain (and a bargain that you need) or simply another con. Never forget that just because something is cheaper than it was doesn’t mean it offers any value to you: some things are expensive at £100 and still expensive at £10. Before you pay the sale price always ask yourself if you would have paid that price for it if you weren’t at a sale and as you do so remind yourself that over two-thirds of women admit to buying things in the sales that they have never worn.

      If you do end up buying rubbish in the sales remember you have the same consumer rights as you do if you buy that rubbish before the sales. Many stores will tell you that you are not entitled to a refund if you buy something at a reduced price. This is not true. If you have simply changed your mind about wanting something you are not entitled to your money back (although many stores will let you exchange things out of goodwill), but if something is broken or faulty (this includes everything from TVs that break to shirts that lose their buttons after only one wearing) you are entitled to a refund or a replacement even if you have lost your receipt. Don’t let the retailer fob you off by telling you that you have to complain to the manufacturer not to them. That’s not true either. You have three rights under the Sale of Goods Act 1979 as well: the goods you buy must be as described; they must be of satisfactory quality (which suggests that they must last for a reasonable time); and must be fit for a particular purpose. On top of this you have the right to claim against them for ‘consequential loss’, so if your discounted freezer breaks and food gets damaged you can ask to be reimbursed for the food as well as the useless freezer.

      I am endlessly determined to get value from retailers: when I recently found that a bit of fish I had got from grocery delivery firm Ocado was off I insisted on being reimbursed by them for not just the fish but the leeks and mushrooms I had started cooking it with too. It sounds petty, I know, but why should I be out of pocket because Ocado delivered substandard goods to me? (Ocado, by the way, reimbursed me immediately and have done so every time I have complained to them about any of the products they have delivered).

      My current account is now with First Direct. If you are as lazy as I was for 20 years and are still with the same high street bank where your mother opened your first savings account, it might be time for you to think about cutting your expenses by making a change too: to find the account that will pay you the most interest when you are in credit, charge you the least when you are not and won’t charge you any annual or monthly fees, see www.moneysupermarket.com or www.uswitch.com. You will probably find that the Internet accounts offer the best deals. If you do decide to switch it shouldn’t be hard: once you have made the request your old bank has three days to provide all your details to your new one which should then set everything up. When I switched from Lloyds to First Direct this all appeared to work perfectly.

      Beyond current accounts we’ll look at the many ways that banks work to remove your money from you in the next few chapters, but for now it’s worth remembering that when it comes to bank charges of any kind you need to be endlessly vigilant: Which? claims that the major banks effectively overcharge customers by £400 a year each thanks to their range of rotten savings and loans products and their high fee structures, while www.moneysupermarket.com claims that bank small print contains a staggering 110 fees and charges for basic financial transactions.

      Insurance: mostly it’s overpriced rubbish you

      don’t need

      Reading the personal finance sections of the