Life With Debt?

Being in debt will often mean that people need to make many sacrifices to try to get as much money as possible to pay back their debts. At the CCCS we have been trying to think about ways to live on a tight budget but still have an active social life. Here are a few of our ideas about ways to have fun but not break the bank:

Cancel the Pub Trips – Instead of meeting mates down the pub you can save money by asking your pals round to your house for the night. The music will be better, the drinks will be cheaper and you won’t have to scour the streets late at night to find a taxi. You can also ask your mates to return the favour next time you are planning to meet up.


The great outdoors – Get yourself closer to Mother Nature by enjoying the countryside. Pack up a picnic before you leave and all you will have to pay for is the transport costs. As well as being a thrifty day out, filling you lungs with all that fresh air will help put any money worries to the back of your mind.


Ditch the gym – Gyms often charge huge amounts and hope that guilt will keep people paying long after they have stopped going to the gym. If you really are keen on getting fit then working out an exercise regime based on jogging outdoors and routines that you can do at home will save hundreds of pounds over a year. This way you can have a health body and healthy finances.


Brew your own booze – Most of us like a drink from time to time, but the cost of alcohol can make it a guilty pleasure when there are debts to deal with. One way to keep the costs low is to start making your own drinks. Wine or beer making kits can be bought relatively cheaply and offer a great deal of satisfaction when you have perfected your ideal drink. Rhubarb wine anyone?


Get Cultural – Many museums and art galleries do not charge for admission, and can be a great day out. Dust off your beret and soak up some culture.


Library – Buying books in shops can soon add up to a lot of money, but borrowing books from your local library will cost you nothing and they usually have a much better selection of books to choose from. More trendy libraries will also have a CD or DVD lending schemes, though they usually charge a small fee for these.

If anyone out there has any ideas on how to have a good time on a budget please add your suggestions on our discussion board.

How to Budget

Budgeting can help you take control of your spending and make sure you always have enough money for the things you need to spend it on. Doing a budget is a really good way of looking at where your money goes.



Take a look at the tips on “Be S.M.A.R.T for 2008” below.

You could run a weekly or monthly budget depending on how frequently your income is paid, or a combination of the two.
Whether you receive a salary or benefits & pensions, you can still run a successful budget.

Some people prefer to pay regular bills by monthly or weekly instalments either by direct debit or payment cards. Others prefer to save a regular amount so that bills can be paid quarterly (gas, electric, water) or yearly – motor & home insurances, TV licence, car tax.

Use the facilities that your bank account may offer to help you budget, such as free internet banking or telephone banking to check your bank account regularly.

You also need to keep track of any cash withdrawals to help you keep to the spending limits you set yourself.

Remember, the small amounts count-

Daily spend on coffee & a muffin - £2.50 = yearly spend of £648!!!!!!!!!!

Here’s a simple plan to get you started:

Step One: Total Income


Most people find it easier to work on a monthly budget. This means that you calculating a monthly figure for any income that you receive weekly, fortnightly or 4 weekly:

Weekly figure received: multiple by 52 (weeks per year) and then divide by 12 (months in the year)

Fortnightly: multiply by 26 (fortnights per year) and divide by 12 (months in the year).

4 weekly: multiply by 13 (there are 13 payments of 4 weekly income per year) and divide by 12.

Budgeting on a calendar monthly basis helps as most payments for priorities or creditors are monthly. It also means you are considering every single cost over a full 52 week year.

Step Two: Total Expenses


Some costs will be monthly – mortgage/rent, utilities, etc and some may be quarterly or half yearly costs – TV licence, car tax, insurance on household goods or breakdown cover for boilers/leaks.
Some will be weekly and are more likely to be the items that you buy with cash, or on a debit/switch card or cheque (food, petrol etc.)
You also need to include a monthly figure for clothing and any savings you need for birthdays /Christmas or towards emergencies like car or house repairs. It may be easier to work out what you need to spend over a year, and then divide that figure by 12.

Your budget must be updated if you get a pay rise, or if your costs increase, like mortgage & rent increases, utility bills and insurance.

Hopefully, your income will exceed your expenses and you will have a surplus, meaning you can afford to cover all your costs without using any credit for day to day living costs.

*** If not, you should take immediate action to ensure that your priorities are covered (housing costs, utilities, TV licence, car tax & insurance) by reducing any unnecessary expenses, such as leisure, sky TV and any high spending on clothes, tobacco etc.
You can also look at reducing your spending on priorities where possible ***

If you have outstanding credit debts – loans, credit cards, store cards, catalogues, car finance or HP, deduct the total monthly cost of your credit repayments from your surplus.

*** If your expenses already exceed your income before you add up your credit debts , or the credit debt payments take you into a deficit, you should take the steps to try and reduce your costs but also need further advice to help deal with your credit debts *** contact CCCS immediately.

Step Three: How to use your budget


There may be some items that you pay for during the year but not necessarily every month or every week.
Once you have identified how much you need to budget for these items, you should set aside a monthly figure from your budget.
Two possible methods of doing this are:

Separate & Save

Take the monthly figure you need and transfer it to a savings account.
You could choose a savings account linked to your bank account, so you can transfer amounts back and forth, or an instant access savings account with a cash card/pass book for withdrawals.

You could use one savings account for all your budget items, or have separate ones for each item (car, clothing, Christmas).

By using the money in the savings account only when one of these items is required means you will always have the money available.

Example:
Jan - £25 set aside for clothing
- £20 spent = £5 left in savings account
Feb - £25 set aside, plus £5 left over from January = £30 available to spend

Building & Balancing

Same theory as Separate & Save, but the monthly budget amount you have calculated stays in your bank account. So over the year you build up a large figure in your bank account BUT with this method you have to remember only to spend the money on what you have budgeted for.

Both of these methods require willpower and require you to take responsibility for your own spending habits.

*** By opening a savings account and bank account with a good interest rate – many accounts start paying interest on balances as low as £1, you could earn some extra interest over the year.****


Some people find it useful to keep a record of spending – either on paper or using a spreadsheet or even your mobile phone.

It is also necessary to look at your day to day spending. Try to limit visits to the cash point, or keep a record of your switch/debit card transactions.
If you have a budget of £35 per week for food & housekeeping, £10 for meals at work and £25 per week for travel, try only withdrawing £70 for the week.

You may find that by having contact with actual cash, you are able to spend less than you normally would. So if you have £15 left at the end of the week, you could either have a guilt-free spend, or put it aside for later in the month or into savings.

Visit the Messageboards to share your budgeting experiences and give us your tips.

Can you be SMART in 2008?

It’s a New Year, so its time for those New Years resolutions.

We all have things we would like to change in 2008, maybe paying off a store card or credit card, starting a savings plan or finally looking at those mounting debts and taking some action to tackle them. But we all know that New Years resolutions sometimes only last until the last Christmas card has been recycled! So make it different this year, make 2008 the year that you make changes that could make a difference to the rest of your life.

We know it is easier said than done, and quick fix solutions just don’t work. So we are looking at making changes to lifestyle and financial habits that will have long term benefits.

Using a S.M.A.R.T approach could help…

Read below to find out how to make a S.M.A.R.T start to your new financial lifestyle.

S - Is for Start

Making a budget is the best place to start. This will show if you have money to save, or just enough to cover your expenses, or that you are spending more than you have coming in.

*****If it’s the last one, get help now!!*****

Start looking at where & why you spend money. A weekly or monthly diary will allow you to see how you spend (e.g. ATM withdrawals, switch or debit card or credit cards.

You may be surprised at the results, but it is a really useful exercise to start looking at your relationship with your money.


M – Is for Making Changes

Start with the small changes. Check your bank account and look at your direct debits.

Are there any old direct debits that you have forgotten to cancel that are still being paid? You need to know exactly what you are paying out on direct debits & standing orders and for what.

Shop around for the best deals on utilities, phones, and insurances (see http://www.uswitch.com/).

If you are using credit and feel that you are managing all the payments ok, check that you are getting the best deal for the type of borrowing you use – check out money saving expert .com

Have you been charged for using the ATM? Either use a free one, or if you have no alternative, limit your visits to the ones that do charge.

Look at the ways that you can save money. Most of these are painless but do require a little organisation:

Buy pre paid travel cards –they normally save you a little money on buying your fare daily. (It also avoids the deadly disappearing ten pound note -Break into it to get change for the bus, by the time you have bought a newspaper, drink and a snack for breakfast, you have spent £10.00-and that’s before Lunch!!).

o Have breakfast before you leave for work. And no – the “I haven’t got time “excuse will not work. You need to get up a bit earlier! If you don’t like to eat in the morning then make a snack to take for later in the morning. Make sure you have something that you like. If you hate cereals then don’t have them, a cooked breakfast can be just as quick – make an omelette, or have beans on toast. It’s also healthier than buying breakfast, and you can squeeze in a couple of your five a day fruit & veg portions.

o Take a packed lunch rather than buying, or do 3 days packed lunch 2 days buying. Again, it doesn’t have to be a sad little sandwich. One idea is to take a portion of what you had for dinner the night before, or try making soup –cheap and healthy.


A - Is for Adding It Up

Start looking at how much those little habits cost - and not just the obvious things like cigarettes or alcohol. The daily spend that just disappears into your budget such as coffee & soft drinks, sweets, take away food, CDs & DVDs, magazines & newspapers, presents, toiletries & make up.

Then you can work out how much you could save, and if you really want to continue spending your money in this way.

Spending £10.00 per week for example adds up to £520.00 per year.

Have a no spending day (or week) if you are brave!
Just make sure you have pre paid or have money for travel and have food supplies and entertainment (a book or an iPod) – and then buy nothing!


R - Is for Relationship


Take the plunge and take an honest look at your relationship with your finances.

Have you been putting off making a budget because you don’t want to face the truth? Do you overspend because you have other issues that you feel you need to deal with? Don’t be afraid to ask for help if you feel you have emotional issues that are effecting your financial decisions. Your GP will be able to help with counselling services.

Start making decisions rather than just allowing things to happen- if you want to start saving, or you want to clear outstanding credit or debts then take the first S.M.A.R.T step.

Even if you can not make the changes that you wish to make straight away, being in control and making informed decisions will make you feel stronger and more positive about your financial future. You can share you experiences with other people and get help and advice from this site and our message board (link).


T - Is for Taking Control

Decide on a time scale to ensure that the changes that you want to make are realistic.
You could look at making a budget within the next 7 days

You can look at giving yourself a month to change a bank account or get a better savings account.

Perhaps you could commit to making changes for a period of 6 months to see how much you can change your spending habits

Commit to clearing off your store card or credit card in 12 months (if that’s possible).

Many options for dealing with over commitment on credit debt are over much longer periods than a year, and that is why CCCS will give you the best advice based on your circumstances. You may have to consider an option that is quite challenging, such as a long term debt management plan, or alternatives such as Insolvency.

Please contact us if you think you need help, and help all our other web users by posting your thoughts and sharing your experiences on here and on our Message Board.