10922 money matters_v2:A5 04/11/2010 15:46 Page 1
My Money Matters
Making the most
of every penny
10922 money matters_v2:A5 04/11/2010 15:46 Page 2
My Money Matters
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Budget Sheet
Work out how much your income is and how much you are
spending. Check this regularly to make sure you are not living
beyond your means and getting into financial difficulty. If you get
paid weekly work it out weekly. If you get paid monthly work it
out monthly.
Income
Spending
Pay after tax
(Priority Spending)
Food
(Financial Products)
Loans / HP
Mortgage / Rent
Credit Cards
Council Tax
Savings
Electricity
Insurances
Gas
Other
Grants
Benefits
Income from
Savings
Other
Water
Phone / Internet
TV Licence
(Travel)
Bus Fares
Total
(Leisure)
Going Out
Alcohol
Cigarettes
Satellite
Car
Holidays
Other
Other
Total
This leaves me with an available income of £
10922 money matters_v2:A5 04/11/2010 15:46 Page 3
Making the most of every penny
My Money
Matters
Making the most of
every penny
It’s your money so you should
look after it wisely. If you don’t
there are plenty of other
people who will.
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We all need to keep a track of our
money to make sure we can manage
our home and pay our bills on time.
Paying people late can lead to more
costs and make it difficult to get the best
deals. No matter how much or how
little money we have we can all benefit
from reviewing our finances on a
regular basis.
North Tyneside Council has put
together this easy to use guide to some
information and advice that is available
to help you manage your money better.
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Budgeting
The key to looking after your
money is knowing what money
is coming in and more
importantly knowing how
much you are spending. The
best thing you can do is write it
all down on the budget sheet
on page 2.
List all the money you receive on a
regular basis (income) and all the
money you spend on a regular basis
(spending). After taking away your
spending from your income you will be
My Money Matters
left with a sum of money, this is
sometimes called your disposable
income. If your spending is far greater
than your income you need to take
immediate action. There are people
that can help and advise. Details are
listed at the back of the booklet.
You must be realistic and honest with
yourself. Working out your outgoings
makes it easy to identify what you really
should be spending your money on and
shows you what you are actually
spending it on. Writing everything down
can often surprise you, more often it
will shock you. Sometimes this is just
the shock you need to prompt you to
take action and fix your finances.
Use the budget sheet regularly to make
sure you are making the most out of
managing your money.
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Making the most of every penny
Dealing with Debt
If you do get into financial
difficulty – DON’T PANIC,
THERE IS HELP AVAILABLE
1 Do not ignore the problem
Ignoring a problem does not make
it go away. The longer you leave it
the worse it will get and it will cost
you more. Talk to the people you
owe money to. The earlier you do
this the easier it will be. This gives
them the opportunity to offer help
and it also shows that you are
willing to pay your debts.
2 Help is available
You do not have to do this on
your own.
We are here to help, we will find
the right person, free of charge, to
give you the advice you need. Be
wary of companies who offer debt
advice but have hidden charges.
Our contact details are shown at
the back of the booklet.
3 Check your pay
If you are working make sure you
are receiving at least the minimum
wage and check your tax code is
right. The Pay & Work Helpline
(0800 9172368) can do this for
you.
4 Are you getting enough?
Check that you are claiming and
receiving all of the rebates and
benefits you are entitled to. For
example, if you pay rent or Council
Tax you may be entitled to Housing
Benefit and/or Council Tax Benefit
for the place where you live. There
are also Council Tax discounts and
exemptions which may be available
to you. Contact us and we can give
you further information.
5 Money Health Check
Work out your income and
spending. This information is
essential as a starting point for
people to help you. Use the budget
sheet on page 2 to do this.
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My Money Matters
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6 What do you owe?
Make a list of all the money you
owe. Be open and honest with
yourself. This is an opportunity to
deal with all your debts in one go.
7 What debts must you pay first?
Warning – non payment of some
debts could lead to
• Losing your home
• Going to prison
• Losing your belongings
These are called priority debts and
include rent, mortgage, loans
secured against your home and
Council Tax. Negotiate with these
creditors first as the action that can
be taken against you may be
severe. They are more important
than other creditors that may
pressure you for payment.
8 What about my other debts?
You may have other debts that are
non-priority, which could include
catalogues, credit cards, store cards
and loans not secured against your
home. These types of debts are not
as important as priority debts and
there may be an opportunity to
reduce your regular payments.
Reducing payments may affect your
credit rating and ability to obtain
further credit so it is always wise to
seek free advice on how to
negotiate these debts. Details on
organisations who can help are
shown at the back of the booklet.
9 High Interest Doorstep
Lending
If you have a doorstep loan make
sure you check how much you are
paying back. Some doorstep
lenders charge interest rates of
200%. You may be able to save
substantially on the repayment
amount by discussing whether you
can transfer your loan to a more
affordable loan with the Credit
Union. Contact details for Northern
Oak Credit Union are given at the
back of the booklet.
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Making the most of every penny
10 Loan Sharks
(Illegal Money Lenders)
Loan Sharking is illegal. If you have
borrowed from a loan shark you do
not have to pay this money back
and you should get help now by
telephoning the Illegal Money
Lending Team. (0300 555 2222)
Finally - remember you are not
alone, being in debt is something
nobody plans to do and it can
happen for lots of reasons. If you
feel your debts are getting out of
control then the sooner you act the
sooner you can get your life back
on track. Being in debt is not a
crime. If you face up to the problem
of debt openly and honestly you
might be surprised how much free
help and support is available.
Contact details are shown at the
back of the booklet.
The government has launched a
website ‘Real Help Now’ with
more in depth information on
dealing with debt issues.
www.realhelpnow.gov.uk
The Consumer Financial
Education Body (CFEB) offers a
free money guidance service;
Moneymadeclear. The service
is available by appointment
with a trained local guide, by
telephone 0300 500 5000
or via the internet at
www.moneymadeclear.org.uk
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Borrowing Money
The most important question
to ask is – Can you afford to
borrow?
You should consider:
• Why you are borrowing
• How long it will take you to pay it
back
• How much more will you be paying
back in interest.
For example, it would be unwise to
take a loan for Christmas presents and
still be paying it back the following
Christmas!
Loans, overdrafts and buying on credit
are all ways of borrowing money.
Different methods suit different types of
people and situations.
Whatever type you choose, it’s
important to make sure you’ll be able to
afford the repayments. To work out if
you can afford to repay a loan, why not
use the budget sheet on page 2 of this
booklet. Your disposable income must
be higher than the monthly repayment
amount being requested by the person
My Money Matters
offering the loan. If it isn’t, you can’t
afford to repay it.
You must remember that paying back
loans or credit cards may become a
problem if, for example, interest rates
go up or your income goes down. You
should also be careful of consolidating
debts into a loan secured on your
property as this may put your home at
risk if you are unable to make the
payments.
Read the terms and conditions of a loan
very carefully before you sign up to
anything. Shop around and see what
are the best options for you.
TIP: The Office of Fair Trading
provides information on points
you should consider before
signing any loan or credit deal.
www.oft.gov.uk
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Making the most of every penny
Affordable Buying &
Borrowing
Some people have difficulty in
buying goods and borrowing
money because of their credit
history, lack of credit history or
their general circumstances.
They are often forced to buy
or borrow from companies
who charge huge amounts of
interest. If this applies to you
there are more affordable
options available. Talk to
Northern Oak Credit Union
they may be able to offer you
alternatives, their contact
details are given at the back of
the booklet.
TIP: If you do buy or borrow
from high interest lenders be sure
to find out how long you will be
paying and how much you will
eventually pay back. You should
also be wary of being sold
additional insurance that you may
not need. For example,
breakdown cover on a new
settee.
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Budgeting Loans
If you are in receipt of certain
benefits you may be able to
apply for a budgeting loan. A
budgeting loan can help you
pay for items such as:
•
•
•
•
furniture and household items
clothes and footwear
travel costs
costs to improve or maintain your
home, or keep it secure
• rent up front or removal costs to get
to a new place
• costs of looking for or starting work
• hire purchase (HP) or other debts
you may have in relation to the items
above.
My Money Matters
Budgeting loans are interest-free so you
only pay back the amount you
borrowed. You can apply for a
budgeting loan if you or your partner,
have been receiving Income Support,
Income-based Jobseeker’s Allowance or
Pension Credit for at least 26 weeks.
Contact your local Jobcentre Plus Office
or download a form from the website.
www.jobcentreplus.gov.uk
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Making the most of every penny
What is APR?
APR stands for the Annual
Percentage Rate of charge.
You can use it to compare
different credit and loan offers.
The APR includes important
factors such as:
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• The interest rate you must pay
• How you repay the loan
• The length of the loan agreement
(or term)
• The frequency and timing of
installment payments
• The amount of each payment
• Certain fees associated with the loan
and
• Premiums for payment protection
insurance that the lender chooses to
make compulsory.
All lenders have to tell you what their
APR is before you sign an agreement. It
will vary from lender to lender.
Generally, the lower the APR the better
the deal for you, so if you are thinking
about borrowing, shop around.
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Questions to ask the lender
If you find a deal with a low APR, ask
the lender the following questions:
• Does the interest included in the
APR vary or is the rate fixed?
If the rate is variable, your
repayments could go up or go down.
If the rate is fixed, your repayments
will stay the same.
• Are there any charges that are not
included in the APR?
This could include charges for
services such as optional payment
protection insurance. If so, make
sure you understand:
• What the charges are
• Whether you really need the services
offered
• How much you would have to pay
and
• When you would have to pay.
My Money Matters
• What are the conditions of the loan
or credit and do they suit you?
For example, do you have a choice
about how and where you make the
repayments? If you suddenly have
spare money, can you pay the loan
off early – without penalties?
• Can you afford the monthly
payments?
A more expensive loan (with a higher
APR) could have lower monthly
payments if they are spread out over
a longer period of time. That might
suit you better if your budget is tight,
even though you would pay more in
the long run.
TIP: Check the APR. All lenders
have to tell you what theirs is, so
you can compare like with like.
For more information go to
www.moneymadeclear.org.uk
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Making the most of every penny
Emergencies
Crisis Loans
In an emergency you may be
tempted to take an instant loan
from a doorstep lender or an
illegal money lender who will
charge excessive amounts of
interest, there are better
alternatives.
If you need financial help with an
emergency or disaster you may be able
to get a Crisis Loan. This is an interestfree loan from the Social Fund that you
pay back.
You can apply for a Crisis Loan if all the
following apply:
• You’re aged 16 or over
• You don't have enough money to
meet your or your family's
immediate short term needs
because of an event or disaster
• Without the loan there will be a
serious damage or risk to your or
your family's health or safety
For more information contact your local
Jobcentre Plus or DWP office or go to
www.direct.gov.uk
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My Money Matters
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Credit Unions
Credit Union Loans
Most people think that you can only get
a loan from a Credit Union if you have
saved with them, although it is
preferable, this is not strictly true. The
Credit Union may be able to provide
small instant loans for non-savers. The
loans are at a slightly higher interest rate
than their other loans but are still at a
greatly reduced rate to that of the
doorstep lenders. Contact details are
given at the back of the booklet.
The table below shows how much you
are likely to pay back if you borrowed
from a credit union rather than using
other lenders.
Loan
amount
Typical
APR
Number
of
weeks
Weekly
amount
Total
repaid
Total
interest
payable
Cheque
casher
£300.00 246.5%
52
£17.00
£884.00
£584.00
Doorstep
lender
£300.00 272.5%
52
£10.50
£546.00
£246.00
Credit
union
£300.00
52
£6.50
£338.00
£38.00
26.8%
*information correct as at 11.02.10.
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Making the most of every penny
Shopping
It is hard not to be tempted to
buy things that you do not
need or will not use. Shops
and supermarkets make the
most of customers who are
unprepared. Buy one get one
free and three for two offers
are only good value if you
would have bought them
anyway.
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• Always write a shopping list and stick
to it
• Only buy what you need and not
what you think you need
• Do take advantage of offers but only
if it is a product you use
• Do try shops own brands as they are
often a lot cheaper
• Try and shop locally or at a market,
food is often fresher and you can buy
the amount you need and you will
have less waste
• Do not go food shopping when you
are hungry
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It’s good to shop around to get the best
deals, window shop, use the internet
and comparison websites, prices can
vary considerably especially on larger or
more expensive items. The ‘best’ label
doesn’t always mean the best buy.
Internet prices can be 10 – 15%
cheaper. If you can, save for big
expenditure rather than using credit or
buying from catalogues. Interest costs
can be high and catalogue prices are
often more than in the shops or online.
Join the local Credit Union. You can
save safely and borrow wisely at an
affordable rate.
There is always more satisfaction from
bagging a bargain than paying over the
odds.
TIP: If you don’t have access to a
computer all North Tyneside
libraries have computers with
Internet access. Contact us for
more information on the
‘People’s Network’.
My Money Matters
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Making the most of every penny
Maximising your income
Running a home and looking
after yourself and your family is
expensive. One way of helping
is to maximise your income.
That means making sure you
get all the money you are
entitled to and also making the
most of the money you have.
Every year about £2 billion of benefits
go unclaimed. This might be because:
• People don’t know what they are
entitled to
• They are scared of complicated rules
• They find it difficult to complete
forms
• They think they are receiving
handouts or might lose their
independence
• They don't know they can claim even
if they are working.
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It is important that you make sure you
apply for all the rebates and benefits
that you are entitled to. If you pay rent
and/or Council Tax for the place where
you live you may be entitled to Housing
Benefit and/or Council Tax Benefit to
help you pay these bills. You might think
that you are wasting your time if you
only get a small amount of Council Tax
or Housing Benefit, but qualifying may
entitle you to other reductions. For
example, prescriptions, dental
treatment and pet bills at the PDSA. We
can arrange a benefit entitlement check
so contact us for further details, or use
the benefit calculator on our website to
see if you are entitled.
If you already receive Housing Benefit
or Council Tax Benefit but still have to
pay something towards these bills and
are having difficulties paying the shortfall,
you may be entitled to claim a
Discretionary Housing Payment. You
can get a claim form from any customer
service centre or download a copy
from our website –
www.northtyneside.gov.uk/benefits
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Make the most of your money by
getting the best deals on gas, electricity,
telephone, insurance etc. A lot of
companies know that people cannot be
bothered to shop around for better
deals and use it to their advantage by
increasing the prices for existing
customers and offering the best deals to
attract new ones. It takes very little
effort to shop around and could save
you quite a bit of money. If you have
access to the internet, use comparison
websites. Alternatively you can
telephone a few different companies for
quotes. Sometimes just phoning your
existing supplier and telling them you
are shopping around for a better deal is
enough to get them to offer you a
discount.
TIP: Think about the best way to
pay for goods and services. Some
companies offer a discount for
paying on-line or by monthly
direct debit, if you are able to do
this you can save yourself a little
bit of money and spread the cost
throughout the year.
My Money Matters
Paying on a credit card can be expensive
if you don’t pay it off before you are
charged interest. However, there are
sometimes insurance benefits from
paying for goods on a credit card rather
than by debit card or cash. For example,
if you book a holiday and pay for it by
credit card if the holiday company goes
out of business your credit card
company will reimburse you.
Key Meters are the most expensive way
of paying for fuel. Sometimes if you
have arrears then you have very little
choice because the supplier deducts
payment of the arrears every time you
top up. There is however a limit to the
weekly arrears amount that can be
deducted and all suppliers must offer a
social tariff to avoid people falling into
fuel poverty. You should contact your
supplier to ask about their social tariff.
Making your home more energy
efficient can help reduce your bills.
Increasing your loft insulation, installing
cavity wall insulation and having an
efficient boiler are all ways to make your
home warmer. For some people this
work can be done free of charge for
others there are grants available.
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Making the most of every penny
For further information,
www.warmzones.co.uk
0191 2234199
Get a council EASE card to access
discounts on activities and leisure
facilities in the borough. There is also an
EASE EXTRA card for under 17's, and a
priority EASE card for people on certain
benefits. There are a lot of free activities
and events in the area so make the
most of them. Contact us for more
information.
If you regularly travel on the bus, metro
or through the Tyne Tunnel you will
save money by investing in a pass.
TIP: Make some extra money by
selling your unwanted items
through internet auction websites
like eBay or go along to a car
boot sale.
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Basic Bank Accounts
There are 2 million adults in Britain who
don’t have a bank account. If you
haven’t got a bank account you could
be paying more than you need to for
lots of services. A Basic Bank Account is
the simplest form available and you
won’t need to have your credit history
checked to open one. All you need to
do is visit a local branch of the bank you
choose and ask to open one. They will
help you through the steps you need to
follow.
Having a Basic Bank Account means
you can:
• Receive your wages or benefit
directly into your account
• Pay bills by direct debit or standing
order
• Have a cash or a debit card. A debit
card means you don’t have to carry
cash with you
My Money Matters
• Basic Bank Accounts do not have
overdrafts or provide cheque books
so you won’t get yourself into
financial difficulties, but they will
charge you if they ‘bounce’ a direct
debit so always make sure you have
enough money in your account to
cover your bills.
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Making the most of every penny
Saving
Saving is a good way of putting money
by for something planned like
Christmas, holidays or birthdays or to
cover the cost of emergencies. By
putting your money into a savings
account you can save enough to cover
these costs and earn interest as well. If
you can it is always better to save than
to borrow to pay for many large or
expensive items, especially as interest
rates on loans and credit cards can be
extremely high. You also don’t have to
worry about losing your money or
having it stolen. Even if a bank goes
bust, the Government guarantees
personal savers will get their money
back up to £50,000.
The main types of savings are:
• Bank and building society savings
accounts
• National Savings and Investments
• Credit Union savings accounts
• Individual Savings Accounts.
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Different types of savings accounts offer
different rates of interest. Sometimes,
however, to get a good interest rate
you will have to give the bank or
building society notice that you want to
withdraw your money. This can be as
much as ninety days. So if you think you
might need your money in a hurry look
for an instant access account.
Even if you can only afford to save a
little bit each week it can soon add up.
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Contact Details
North Tyneside Council
Revenues & Benefits Services
Quadrant
Silverlink North
Cobalt Business Park
North Tyneside
NE27 0BY
0345 2000 104
[email protected]
Age UK North Tyneside
(Age Concern and Help the Aged are
now partners in Age UK)
0191 2808484
www.ageuknorthtyneside.org.uk
Citizens Advice Bureau
0191 2704485
www.citizensadvice.org.uk
Community Legal Advice
0845 3454345
www.clsdirect.org.uk
Consumer Credit Counselling Service
(CCCS)
0800 138 1111
www.cccs.co.uk
My Money Matters
Consumer Direct
0845 404 0506
www.consumerdirect.gov.uk
DAWN (Advice) Ltd
Free independent debt advice for
North Tyneside residents, 9am – 8pm
0300 303 1613
www.dawnadvice.org.uk
Department for Work and Pensions
Disability Benefit
0800 882 200
Carers allowance
01253 856 123
www.dwp.gov.uk
Direct Gov
www.direct.gov.uk
Jobcentre Plus
0800 055 6688
www.jobcentreplus.govuk
Money Made Clear
0300 5005000
www.moneymadeclear.org.uk
Northern Oak Credit Union
72 Howard Street
North Shields
NE30 1AF
0191 296 2611
www.nocu.org.uk
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Making the most of every penny
North Tyneside Employee
Credit Union
Quadrant
Cobalt Business Park
North Tyneside
NE27 0BY
0191 643 5881
Shiremoor Credit Union
60 Park Lane
Shiremoor
Newcastle upon Tyne
NE27 0TL
0191 268 7280
National Debt Line
0808 808 4000
www.nationaldebtline.co.uk
Illegal Money Lending Team
0300 555 2222
www.direct.gov.uk/stoploansharks
The Pay & Work Helpline
0800 9172368
www.direct.gov.uk
Pension Service
Pension credits
0800 991 234
Winter fuel payments
0845 915 1515
www.thepensionservice.gov.uk
Real Help Now
www.realhelpnow.gov.uk
Office of Fair Trading
08457 22 44 99
www.oft.gov.uk
Warm Zone
0191 2234199
www.warmzones.co.uk
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North Tyneside Council wants to make it easier for you to
get hold of the information you need. We are able to
provide our documents in alternative formats including
Braille, audiotape, large print and alternative languages.
For further information please call 0345 2000 104
The information in this booklet was put together by Revenues
and Benefits Services 0345 2000 104. You can contact us at:
North Tyneside Council
Quadrant
The Silverlink North
Cobalt Business Park
North Tyneside
NE27 0BY
Email: [email protected]