in this section
Budgeting
Bank accounts and savings
Picture
Credit
Money problems / dealing with debt
For Contact Details see our A-Z
Whatever money you have to live on, the chances are it never goes far enough. If that sounds like you, it might help to work out a budget plan of what your income is and what you spend.... see below
BUDGETING
| Income | Amount | Expenditure | Amount |
|
Wages Benefits Housing Benefit Tax Credits Grants EMA/alg Other Income |
|
||
| TOTAL | TOTAL |
If your income is more than your expenditure, then what's left over is for you to spend as you like, or to put aside towards a holiday or unexpected expenses.
If your expenditure is more than your income you need to take action. Money problems don't go away if you ignore them, they just get worse. Get help from CAB or Castlegate who will be able to suggest ways you can budget better, or manage your debts. See here more information about dealing with debt.
The CAB also publish a free guide 'York on a Budget'. Pick up a copy from CAB or Castlegate for ideas on saving money locally.
Mon£y Management - if you are battling with bills or confused about credit you can improve your money skills with free training from CAB (either one to one or in a group). Call them for available times. For Contact Details see our A-Z
You can get stuff for free online from York Freecycle - furniture, bikes, baby equipment, clothes etc are all offered regularly. See here for more information.
moneysavingexpert.com has plenty of tips for saving money; e.g. getting the best deal from banks, insurance etc., a freebies directory, how to be a wiley consumer, template letters to start a reclaim for bank charges etc. See also Consumer Rights.
BANK ACCOUNTS AND SAVINGS
Most people have a bank or building society account, to keep their money safe and for their employer to pay wages into. It also means that you can pay money to others without using cash.
A current account usually comes with a cheque book and cheque guarantee card (if you are over 18), and a cash machine card. Shop around for free banking and interest paid when you are in credit, low
charges on overdrafts, an easy to get to branch, standing order and direct debit facilities (to pay money out of your account regularly like rent or bills). Most now offer telephone and internet banking.
If you need to go overdrawn on your account, make sure you arrange it with the bank first, as they will charge you a lot more for an unauthorised overdraft. Find out what it will cost you first.
If you don't want or aren't allowed these extra facilities (for example, if you're new to banking or have had difficulties in the past), most banks, building societies and the Post Office offer a 'basic account'. This should allow you just to pay money in and to withdraw it at a cash machine. If you claim benefits, or get a job for the first time, you will need an account to receive your money.
It's worth having another account to put money aside, however little, so that you are less likely to spend it with your 'everyday money'. Shop around for the best rate of interest at banks, building societies and the post office (National Savings). You can also save through North Yorkshire Credit Union. see here.
CREDIT
Credit = buy (or borrow) now and pay later. Credit is nearly always a service you pay for, so you pay the amount borrowed plus a fee on top. You usually pay it back in installments over a period of time. You cannot normally take on any kind of credit before you are 18. No company will lend you money or give you goods in advance without believing they will get it back from you - for example because you have a regular income, or you have a history of paying things on time. After all, this is their business. Credit comes in several forms -
Hire purchase (HP) and credit sales -you pay a deposit and then make weekly/monthly payments. With HP, the goods do not belong to you until you have made the last payment, whereas with credit sales you are the owner of the goods as soon as the contract is made.
Bank loans - banks offer personal and ordinary loans, and budget accounts to spread the payment of bills over a year.
Overdrafts - many bank accounts allow you to keep withdrawing money even when your account has nothing in it. If you have not agreed this with the bank you will be charged more than if you have agreed it. Charges vary from bank to bank. If you think the amount you have been charged is too much find out about requesting a refund from your bank from Castlegate or CAB or look at moneysavingexpert.com
Credit cards - card companies send a monthly statement telling you what you have bought on your credit card and how much you owe. If you do not pay it all off within a month or so you will have to pay interest - usually quite high.
North Yorkshire Credit Union is a savings and loans service for anyone who lives or works in York/North Yorkshire. It is open to anyone 16+ and you can save in small amounts. It costs £1 to join - phone for an application pack or pick one up from Castlegate. You can pay money in direct from your bank account or at one of their community savings points. It's a much better way to borrow money than through 'loan sharks', though they won't make loans if they think that making the loan repayments will cause you further hardship. For Contact Details see our A-Z
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BEFORE YOU TAKE ON CREDIT
Ask yourself whether you can really afford the repayments, and if you really need what you are buying. Credit can be very tempting, and also very expensive.
Check the 'Annual Percentage Rate' (APR) i.e. the % interest you pay over a year. An APR of 0% means there is no charge for credit - the cost price should equal the payments you make.
Make sure you have read the agreement fully and have understood it. Keep copies of all agreements. Never sign a blank form. If you sign the agreement in their office, or agree to it over the phone, you can't cancel it if you change your mind. If you sign in your own home or anywhere else you are entitled to cancel the agreement - you'll be sent a cancellation notice explaining your rights. This does not apply buying from a mail order catalogue agent, but you
may be sent an opportunity to cancel within 14 days.
Failure to keep up payments
If you stop paying your HP payments, the shop can take the goods back, but they must get a court order if you've paid over one third of the total amount or if they want to take them from your home without your permission. If an HP agreement is ended in this way, you may still have to pay up to half the price of the goods. You are not allowed to sell the goods until the agreement has been paid off. Other types of credit agreement are not ended by you returning the goods - you may still owe a lot of money.
Refused credit?
If you are refused credit in a shop, it may be because you (or your address) are considered a credit risk (i.e. bad payer). Often they use details provided by a credit reference agency to make this decision. You have the right to be given the address of the agency they use; if you're having problems it might be worth checking what information they hold about you.
Write to request a copy of your file - there is a fee of £2. Make sure you are requesting your statutory credit file, as other more expensive reports are offered, but not necessarily needed. The three major credit reference agencies in the UK are Experian Ltd, Equifax plc and Callcredit plc. For Contact Details see our A-Z
Send your name, date of birth, current address and previous addresses in full for the last 6 years, plus payment. You can ask for anything on file to be corrected if it is wrong. A factsheet on credit reference agencies, which gives details of your rights, is available from nationaldebtline.co.uk See below.
MONEY PROBLEMS / DEALING WITH DEBT
Juggling your bills each month because you can't pay them all?
Behind with your rent?
Always broke at the end of the week / month?
Behind on credit repayments?
Always borrowing money from friends and family?
Regularly going overdrawn on your bank account?
Leaving letters unopened or throwing them straight in the bin?
Hiding from debt won't make it go away. It may be easier than you think to get debts under control, especially with professional help from Castlegate or CAB. You may end up with a bad credit rating but you'll feel loads better. CAB also offer money management training. See here for more information. For Contact Details see our A-Z
National Debtline run a free advice line to help you sort out debt, and an excellent website, nationaldebtline.co.uk from which you can download their 'self-help pack', fact sheets, sample letters, a budget sheet, 'what if's...', all with clear advice to follow and make debt manageable. For Contact Details see our A-Z.
Maximise your income: If you are struggling to make ends meet, make sure you are not missing out on any benefits or tax credits that you may be entitled to - see here for who can help.
Make a budget plan: call in at Castlegate for a budget plan or download one from nationaldebtline.co.uk. Work out your income and outgoings. Talk it through with someone and see if there are any savings you could make - for example taking sandwiches to work, buying a bike or reducing your mobile phone costs.
Prioritise your debts: List everyone you owe money to. Your priority debts are the ones with the most serious consequences, not the ones hassling the most. First should be rent or mortgage arrears, then secured loans, gas, electricity and water bills, Council Tax and unpaid fines or maintenance payments. Tackle other debts after these, such as credit card or bank debts.
Contact the people you owe money to and explain the situation: Send a copy of your personal budget plan to all your creditors with an offer of repayment that you can afford. Don't worry if it is small. Most creditors would prefer this than to chase you for missing payments. If you can't afford anything now, tell
them so, and that you'll contact them again if your situation changes. Ask them to freeze any interest. Sample letters are available from
nationaldebtline.co.uk, but you can get help doing all this from
Castlegate or CAB.
Don't borrow other money to pay off your debts. This often works out more expensive, no matter how tempting. Avoid debt consolidation companies - they are in business for your money.
Don't ignore court summons - fill in the papers and attend the hearings. The courts can often arrange a repayment schedule that's manageable, and will stop people pestering you. Unpaid debt (other than Council Tax arrears) is only a civil offence, not a criminal one. You won't be arrested for it, or put into prison!
Answer creditors' letters and calls; keep records. They are allowed to remind you of missed repayments but not to harass you.
Gamblers Anonymous or GamCare - can help if you have a problem with gambling - or think you might do. Contact either organisation for confidential advice and support. Gamblers Anon have a local weekly meeting in York - see gamblersanonymous.org.uk for details. Gamcare also offer online support. For Contact Details see our A-Z