Stoozing v regular Saving

obeywan_kenobe

I recently had a regular saving scheme mature with Halifax which at the time was a very high interest rate of 6.2%. I started with £250 and paid in £100 per month. After a year I made a princely profit of £38 after tax.

Also 2 month ago I stoozed £6000 from Egg and put it into a Esaver at 5%.
When i get the interest in april I am sure it will be close to £38.

smartsaver

All very good but, I'm not sure what your point is??

Bargain_Rzl

I may have misinterpreted you, but you appear to be implying that there is little point in "real" saving when the same gains can be had in a much shorter time by stoozing.

Since when was it all about the interest gains? I've just started stoozing but I'd NEVER consider it a substitute for saving my own capital. When your car blows up, or you need to take a break from work and have to cover your living expenses, your stoozing interest won't go far. Your savings, on the other hand, leave you with the capital to cover unexpected expense without going into debt. And with a decent interest rate, you're more than protecting your capital from the effects of inflation.

Yes, stoozing is useful. It provides for some of life's little extras. But it isn't a substitute for saving actual, non-borrowed cash.

Big_Nige

Yes but it is a nice supplement......money for old rope with no financial outlay by the "stoozer"

deemy2004

The way I see it, stoozing ups your % return on your REAL savings....

Since the stoozed money is NOT your money, so you can never count it as yours but depending on how much savings you have, and your stoozed pot size it can add a healthy 1 or 2% to your overall % return

In the example above were talking more than tripling the % return from say 5% to 15% per annum ! Now that is the power of the stoozed pot !

Reaper

The answer, of course, is to do both!

Bargain_Rzl

Absolutely.

Either use stoozing income as a top-up to the interest of actual savings, or use it to spend on luxuries which you wouldn't mind letting go if the potential for stoozing dries up.

I've set a little challenge for myself. I'm fanatical about classical music, especially opera, which in itself is not nearly as expensive as a lot of people think (I used to go the opera once a week or more in the cheapest seats even when I was earning £11.5k, and always stayed within my means). It's only really expensive if you feel you always have to have the best seats for things, or else, like me, are satisfied with cheapish seats but have to feed the habit on a weekly basis!

Anyway, there's something special coming up in 2007, which I'd like to pay proper money for, to sit in as good seats as possible. So I've decided that any stoozing profits between now and then will go towards this. It concentrates the mind wonderfully to aim towards a target

I'd be interested to know how other people treat their stooze money....

Walletwatch

Bargain_Rzl wrote:

I'd be interested to know how other people treat their stooze money....

To us, stooze money is more a stop-gap arrangement on the road to financial freedom - aiming to account for living expenses and inflation from all income other than work, and as of now, stooze interest is a good fillip to cover for the deficit. Needless to say, on a monthly basis, the dependence on stoozed income for expenses keeps reducing, and builds a good buffer for unscheduled expenditure as well.

Reaper

I hate debt (apart from stoozing which isn't real debt), and that includes my mortgage. So my stooze money goes into my offset mortgage account. That slashes my interest payments and lets me pay off my mortgage faster.

obeywan_kenobe

Wow!!! What a response.
I was only comparing the difference between the gains of stoozing and high interest savings. Ofcourse you should do both and I will continue to do so. I just find it strange that the returns are higher for something that financial organisation dont want us to do.
Power to the stoozer!!

realaledrinker

My stooze profits act as a comfort blanket for unexpected expenses or treats. For example, yesterday I had to rebook a couple of flight tickets down to Heathrow for the U2 concert & lost the cost of the originals as they were non-refundable. These can be paid for out of the stooze pot, I reasoned.

The only problem with this strategy is that I am not keeping a running total of expenditure so I have no idea whether the total exceeds my stoozing profits, which I know to the last penny (pre- and post-tax)!