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I am one of those people who never have cash with them. Never. And I work just upstairs from two ATMs… literally!

Everything I can solve with a card (debit or credit, as is most appropriate), through a direct debit on my account or through an online transfer (ideally on my mobile), I do. It saves me time and headaches. But are we really moving towards a cashless society? Will we pay our babysitters by bumping our phones? Grandparents will do online or Whatsapp transfers to their grandchildren on their birthdays?

And what does it take to build such a society? Dave Birch, a research fellow at the Centre for the Study of Financial Innovation, has given it some thought and shares his hopes and fears in this short TEDx video. Enjoy!

 

 

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You gotta love the European Central Bank (ECB) for being so inventive! After bringing us the Inflation Island game, or €conomia game, in order to reveal the new security features of the brand new €20 banknote the ECB presents Tetris® New €20

The game, fashioned after the very popular and addictive Tetris®, reveals the four security features as you add pieces and build lines: the hologram, the watermark, the emerald number and the innovative portrait window. So, if you were any good at Tetris® growing up, feel free to try your luck! The 100 best scores will receive a €10 banknote sealed inside a block of transparent acrylic worth €20. The competition is open until 31 March 2015 at 23:59.

The new €20 banknote that will be presented by president of the ECB, Mario Draghi, on 24 February, is the third euro banknote to change its look since the introduction of the euro in 2002. First was the €5 banknote and last autumn the €10 banknote. In fact, the ECB has a programme to upgrade all banknotes in ascending order over several years.
 
Why do we change banknotes? The new banknotes include developments in banknote technology to make them more resistant to counterfeiting, thus reducing the risk of fraud for all of us. Additionally, these new banknotes are better for the environment: they have a protecting coating that makes them more durable, thus having to be replaced less often. This is especially important with banknotes of smaller value, like the €5 and €10 banknotes, as they are widely and intensively used; and more durable banknotes means their reproduction will cost less overall.
 
In case of doubt, the first time you come across a new euro banknote you are not familiar with, it is easy to check manually and visually its security markers. Other than the hologram and watermark, the number changes colour from emerald green to deep blue when tilted. You can see specimens of the different banknotes here.
 
Q. Do I need to go to the bank and change all my banknotes?

A. No. The exact date of circulation of the new €20 banknote hasn’t been announced yet and, in any case, the change doesn’t happen overnight. During a sufficiently long period both new and old banknote will co-exist until such time as the ECB announces the end of the old banknote. It’s been more than a year since the new €5 banknote was introduced and we can still buy goods and services with it. And even after the banknotes are no longer valid in shops, you can exchange them for new banknotes at any of the European central banks, including the Banque Centrale de Luxembourg.

 

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The Autofestival is here once again and for many of us this is the time to get a new car with a great discount.

But how do you decide on what car to take? Of course we all have a certain preference for one brand or another, but even within a brand the differences in purchase prices as well as related costs are huge.

Below I have listed some points you might want to take into consideration before you go on your tour of the country’s car dealers.

Petrol, Diesel, Hybrid or Electric?

It seems that every year there are more types of cars from which to choose. They all have their strong and weak points when it comes to money matters, but it actually all depends on what you need.

Sit down and think about how you are going to use your car. For example, a car running on diesel usually has a higher purchasing price than a car running on petrol. But running a car on diesel is cheaper than running a car on petrol. The challenge is now to try to calculate if you drive enough to earn back the initial higher price of the diesel-engined car, or if you would be better off buying a petrol-engined car.

You can find many articles on the web explaining the pros and cons of different types of cars.

Costs of running your car

After you have figured out how much you can spend on buying a car, you need to be sure you also have the money for driving your car.

Things to think about:

- Fuel costs, which can go up if you are constantly stuck in traffic 

- Maintenance costs (regular maintenance, winter tyres...)

- Insurance costs

- Parking costs (parking a full working week on the Glacis easily comes to €45 per week)

- Registration costs, taxes, etc.

All these costs can add up to an important amount and you surely do not buy your car just to keep it in your garage.

Depreciation of the car

Are you going to drive this car for the next 10 years? Or are you going to switch car every few years? If you want to change car regularly it is good to take a look at the depreciation of the cars on your short-list. Some brands might be more expensive initially, but lose their value much slower than other brands. Like this they could save you some money on your next car.

More reading

These are of course just a few tips. You could read last year’s “6 tips for buying a new car during the Autofestival” for more tips. Or Google your questions for tons of information on this subject.

Happy (car) hunting!

 

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Did you know that among the New Year resolutions, financial resolutions are on top of mind for many?

According to an ING international Survey, in Luxembourg, we are 79% likely to have resolutions for 2015 addressing Financial matters. To help you to do so, you can print this infographic in A4 and hang it on your fridge or beside your desk...

 

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At ING we believe banking doesn’t have to be difficult and time consuming. It’s so crucial for us that it’s the first pillar of our customer promise: to make banking clear and easy. A good example of what we do in this respect is our new online banking alerts, awarded Best Financial Solution of the Year 2014 by the Finance Management Summit. And here’s why.

How often have you wished someone would tell you that your salary has been paid into your account or that your rent has been paid as planned? With ING’s online banking alerts you can get personalised and relevant information on account activity to help you stay on top of your finances, without effort. You can set the alerts you want and have the information delivered to your email account in real time.

1. Save time and money

Quit wondering whether a payment has gone through. Our alerting system sends you an email in case a payment is blocked due to insufficient funds. You can also custom set an alert that will notify you if your balance drops below an amount you decide. Be good at money and avoid unwanted overdrafts.

2. Make the best financial decisions

Alerts about in- and out-flows of your account provide relevant information at the right time, so you can understand your choices and make the best financial decisions. Anytime, anywhere.

3. Be alert yet relaxed

Protect your accounts with default security alerts that inform you when certain changes are made to your online and mobile banking access. And set your custom alerts to be informed of new documents or secured messages with information that will make things easier for you, so you can stay a step ahead in life and in business.

Set your alerts now and stay on top of your finances without effort. At ING we believe you should spend your time on the important things in life.

PS: Stay tuned for new alerts this year!

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When the rush for last-minute presents and the big family gatherings are over, you will sit down, look back at 2014 and start planning what to improve; and, somewhere in our lists, we all want to be good at money.

Before you set a bunch of resolutions that may turn out to be unrealistic, here are 3 tips you should consider for 2015.

Eye on the plastic
We have payment cards which make life easier – but they make overspending easier too! Avoid compulsory purchases when shopping and rethink whether you truly, absolutely, need the latest high-tech device. At ING we have a new service that allows you to be in total control of your finances: Alerts. Set up alerts and spend your time on the more important things in life.

Budgeting
We all know shopping brings joy but remember that unwanted excesses can lead to bad surprises! Budgeting is not only about knowing how you spend your hard-earned money; it is also about thinking about your future, to plan in advance and avoid serious headaches! You have some trouble budgeting? This article should help you: 8 ways on how to create a budget.

Sharing is caring
According to research from Columbia University and Harvard Business School, when you spend money on others rather than yourself, you increase happiness. In 2015, think about giving to charity. And, in Luxembourg, giving to charity does not only increase your happiness, it is also good for your tax declaration. If you give €120 or more to certain agreed NGOs, the total sum of your donations can be deducted from your taxable income ( as long as you do not go over 20% of your net taxable income or €1,000,000).

I hope that these 3 basics will help you to be financially fit in 2015. In the meantime, I wish you all a Merry Christmas and a Happy New Year.

 

Tuesday, 16 December 2014 05:28

Barbara Daroca: Spend to Save - on your Car

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Yep, as funny as it may sound, sometimes you need to spend some money in order to save in the long run; this is especially true when it comes to your car!

1. Routine maintenance
It’s the key to keep your car running well. Some of it you can do yourself (like checking the oil level) and some is scheduled by your manufacturer (based on mileage or time). The point behind these check-ups is to clean and/or renew certain parts that deteriorate with use and time. Skipping one of these appointments can have fatal consequences for your car! For example, failing to change the timing belt in time might cause its rupture, the result of which can be so damaging for your engine that you might be looking at a total loss.

2. Clean inside out
Keeping your car clean is not just about appearances. Washing your car periodically, also the inside, will avoid odors, rust and other problems. A thorough wash can help you discover corrosion issues with the bodywork, which is typically covered by the manufacturer in the paint and bodywork warranty during the first few years. Additionally, keeping your car clean and in good general state will enhance your chances to sell it at a good price should you decide to part with it. A car that hasn’t been tend to for a long time will be more costly to bring “in shape” for sale, and once clean you might discover defects that are expensive to repair.

3. Insurance
There are different types and levels of insurance coverage. The one where nobody should try to save on is the basic, mandatory third-party vehicle insurance – the repercussions of being caught driving a car without proper insurance (points on your license, monetary fine) outweigh whatever you saved. This insurance provides financial protection for damage caused to other vehicles and property in case of traffic collision, and it covers any liability for injury to others. Again, it’s the bare minimum you must have, but check all options (fire and theft, full coverage) as the final decision will depend on your personal situation and your car’s value.

4. Tyres
A big source of disagreement in many couples! The truth is that worn tyres are a real danger on the road and can cause terrible accidents. They need to be changed every so often, and this will vary depending on the car and its use. If you cannot tell whether they are worn or not, ask your garage during a routine maintenance check. And, finally, remember that appropriate winter tyres are mandatory in Luxembourg and despite the nice warm October we had this year, ice and snow are around the corner!

5. Bumps and bruises
Believe it or not, this last point is about fuel consumption. Dents change the shape of your car, and dislodged parts (as a consequence of a collision or bad repair) will move and vibrate when in motion, all of this causing that your car is no longer aerodynamic, the way it was conceived and constructed in order to decrease the “force of friction” when moving – making it as energy efficient as possible.

Taking good care of your car is a form of saving. Even if you have to spend a little money on it!

Tuesday, 18 November 2014 10:54

Barbara Daroca: Pay Online – Safely

 

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Well, believe it or not, the holidays season is upon us again. It seems like it was merely a couple of months ago I wrote an article about online shopping for Christmas!

Whether for shopping for your loved ones or booking a flight, paying with a credit card online can be scary. The only way I could convince my mother-in-law that it was safe was with a Visa CyberCard with a very low credit line.

How it works

We’re all familiar with how a credit card works: you have been a client for some time and have a certain income, according to which your bank grants you a credit line. This allows you to pay for things before the money (your salary, rental income or pension) arrives in your account. Your bank knows you’re good for it. And since you don’t yet have the money you pay with a piece of plastic that tells the retailer or service provider your bank will pay for the goods, whilst your bank gets the message that now you owe them money. You can do this exercise as long as you have not exhausted the credit line granted to you.

The Visa CyberCard is also a credit card, but with two major differences: it does not come in plastic, rather it’s just a series of numbers for your to fill in when shopping online; and it has a reduced credit line, it often amounts to just over EUR 100. With the reduced credit line both you and the bank limit the risk of your card being “hacked” while online shopping and both you and the bank losing money. Look at the online shopping you usually do in a month’s time and you’ll realise that iTunes and Amazon Kindle downloads rarely amount to much more.

But what if I want to book my holidays?

Also my online expenses increase around Christmas and other holidays. I still pay with my CyberCard to limit the risk and to do so I do not need to increase my card limit. That would defeat the purpose! At ING Luxembourg every credit card is opened with an account. Effectively this means that you can “load” that account with any cash amount you wish and “spend” it with your credit card, as if it were a prepaid card. The credit line of your card which is what the bank has agreed to advance for you stays the same. And so the risk for you and the bank doesn’t have to change.

An example might make it clearer: let’s assume your CyberCard has a credit line of €100. And one day you want to buy something that is worth €200 online. Without any action from you, your CyberCard can only pay for max. €100 (assuming you haven’t used part of the credit already!) because this is how much credit the bank grants you. But if you put €100 of additional funds in your CyberCard account you can pay €200, the sum of the credit the bank grants you plus the amount of cash you put in the account. Once the money is spent, the balance of your CyberCard account will be €-100 and the credit line will be used until you pay it back on the established due date (at which time your balance will go back to €0 with a credit line of €100). This can be very helpful this time of the year. Word of caution, however: only “load” your CyberCard amount when you are about to pay online, and only put in the needed amount of cash! If you keep a constant balance and your card does get stolen on the Internet you stand to lose that extra cash!

And the cherry on the cake

If you own an ING Luxembourg Visa Cyber Card as well as a Classic or Gold Visa Card your CyberCard enjoys all the extra guarantees too – very interesting when buying appliances and booking trips!

Safe shopping!

 

Tuesday, 04 November 2014 16:49

Barbara Daroca: Solidarity with the Community

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The ING Solidarity Awards 2014 are currently in full swing; with nominations closed, the voting phase is now in progress, with the awards themselves being held on Wednesday 19 November.

In accordance with our active policy in terms of Corporate Social Responsibility (CSR), ING Luxembourg is organising the ING Solidarity Awards for the 3rd year in a row. All associations (non-profit organisations and foundations) established in the Grand Duchy are invited to participate.

The novelty of the awards gained a lot of publicity when first announced and over the past couple of years this as certainly not been diluted - ING Luxembourg's connections with the local community has been strengthened considerably by this innovation. With it, we are giving back to the community and becoming closer in the process.

The concept of the ING Solidarity Awards is that we award cheques of €1,000 each to a total of 40 volunteer organisations; these are voted on by the public, with the top 40 organisations benefitting. In addition, we award up to €6,000 to a few organisations whose specific projects are selected by the jury, for BOTH 100% volunteer organisations and also part-volunteer organisations.

As the voting process is currently underway, it is up to you to vote for your favourite association on  http://goo.gl/5D8AFX

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You have a decent household income. You make wise shopping decisions. You lead a normal lifestyle... and yet there's not much left on your bank account at the end of the month? Don't worry, you're not alone. Try googleing "tips for saving money"; you'll get thousands upon thousands of articles.

Why? Because most of us forget the basics. You need to get the basics right.

The truth about saving

Saving doesn't happen on its own. Ask around. Unexpected extra money on your bank account at the end of the month always has a reason: an additional allowance, a delayed invoice, interest/dividend due on an invesment. If you want to save money for unforeseen costs or special projects, like buying a house or going on holiday, you need to actively, consciously decide to save money.

And when you do so, be realistic about it. Remember that how much you save is the result of  the amount you put aside, how often you put it aside and for how long. Play around with those variables to come up with the right plan. Overreaching will only frustrate you down the line. Ask your financial advisor or your bank for help if you're not sure.

1, 2, 3... Go!

Once you've taken the decision to start saving and you know how much you want to save and for how long, don't wait for the right moment to get started. Start now.

1- Start with the basics: little habits around the house and your daily routine can have positive effects on the health of your finances. Turning off the lights of empty rooms and hallways; keeping a steady temperature in the house to avoing heating spikes; buying certain groceries in bulk and when on sale, like toilet paper or pasta; taking your lunch from home instead of going to a restaurant; taking the bus or car-pooling with co-workers...

2- Set up a budget and stick to it: for all your expenses, including groceries, clothes and leisure. Look at your spending habits to assess how much you need each month, and here also be realistic. If one month you need to spend a little more than allotted, make sure the next month you make up for it.

3- But allow for seasonalities: there are certain times in the year where we need to spend more. Back to school clothing (not just for family with children!), Christmas shopping, Easter holidays... At the risk of sounding like a broken record: be realistic! If you know you're expecting a seasonal payment, like the annual fee of your car insurance, make room in your budget for it to avoid frustration when the time comes.

So, what are you waiting for?

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