The Charity for your Community New Year, New You ! My Money Make Over Aileen Hutton & Nichola...

The Charity for your Community

New Year, New You !

My Money Make OverAileen Hutton

&Nichola MacDougall

Financial Capability Officer

Money management educationand training from Citizens Advice NI

my money aims to empower individuals

to budget, borrowand save with confidence!


Attitudes to money Banking Choosing Credit Budgeting & Saving Dealing with debt Information & Support


Attitudes to money

Research finds that attitudes more than age or income are

the main influences on how people manage their money.

It is these attitudes combined with big events and life

changes that will determine whether people need and

indeed seek help with their money and whether they are in

good financial shape. (Financial Capability Strategy for Northern Ireland DETI)


One thing you like spending money on

One thing you don’t like spending money on

Quiz: Why does money matter? 1. When it comes to saving money:

A. I know I ought to be saving, but I never seem to be able to.B. I really enjoy saving. In fact, I spend a lot of time and energy thinking about how to save.C. I have trouble saving money, and l worry about it sometimes.D. I only save for things I really want or need.

2. When I’m feeling down in the dumps:A. Spending money does not cheer me up.B. Thinking of ways to make more money makes me feel better.C. l always spend money to cheer me up.D. Spending just makes me feel worse. Spending has nothing to do with

happiness.

3. If I won a million pounds in the lottery, l would be:A. Totally overwhelmed. I would have no idea how to handle it.B. Very happy. I would start thinking about how to invest my winnings.C. Wildly excited. From now on I could buy anything I wanted.D. Feeling a little guilty. I would think about how to use some of my money to help others.

So how did you go?• If you answered mostly As – you are an AVOIDER – you put

off making money decisions.

• If you answered mostly Bs – you are a COLLECTOR – you like to see your money make money.

• If you answered mostly Cs – you are a SPENDER – you enjoy spending and think little about how to pay for your purchases.

• If you answered mostly Ds – you are a THINKER – you care about others who have less than you, and you often feel guilty about having more than they do.

Financial and digital exclusion

An individual may have all the necessary skills, knowledge, attitudes and motivation to

manage their money but may be restricted from managing their money effectively due

to external factors such as access to technology.

1 in 5 people in the UK do not access internet


Money management Northern Ireland

(Financial Capability Strategy for Northern Ireland DETI)

• More likely to have a cash budget.• Better at keeping track (particularly in lower

income households)• Less good at planning ahead• Less likely to get insurance• Less likely to be active financial consumers


BANKING


Types of accounts

Basic Bank accountCurrent accountSaving accountsPost office AccountsCredit Union


In Northern Ireland we have the lowest proportion of households with current accounts compared

to rest of the UK.

Other optionsPost office account• Allows deposits and cash withdrawal for a range of basic and current accounts.• Can only be used to receive benefit, state pension and tax credits.• A simple account that won’t let you go overdrawn or incur charges.• No credit checks are carried out when opening this account.

Credit unions• Are owned and run by members for members.• Members have a common bond such as living or working in a specific area.• Encourage you to save money.• They will let you borrow what you can afford to pay. • Lower interest rates.• A credit union may suit if: You can’t get a bank account

Flexibility of saving what you can when you can

Local support for managing your money


Banking Common Banking problems

– Choosing an account– Bank charges– Getting identification– Problems with bank charges– Remembering PIN numbers– Getting access to money– Keeping track of money – Dealing with direct debits– Dealing with call centres

Why have a bank account?– Financial history– Paid wages/benefits– Pay bills automatically– Keep money safe– Online shopping– Access to ATM– Manage money easier-online

or statements

What are the benefits to Online Banking

• Its FREE

• View your account online 24 hours a day, 7 days a week.– Check your balance– Pay bills– View statements & Download– View recent transactions– Manage standing orders and Direct Debits– Transfer Money Between Accounts

• Some accounts let you set weekly alerts /reminders to your phone

Switching banks: why are we more loyal to our bank than to a partner?

We stay with our bank for 17 years, but only stay married for 11, which is why we

may resist seven-day switching!

• Get better rate of interest on your money• Better customer service• Minimise overdraft, bank charges• Added extras like free money or deal on travel

insurance.• Cashback on utility bills etc• Ethics – move your money campaign

Why Switch?

How to switch in 7 daysThree -step process is:

1) Go to new provider/bank - You fill in an application form and a transfer form and provide some proof of identity.

2) The new provider checks which payments you want moved across and sets them all up, while getting your previous account provider to cancel the old ones.

3) Your account will be set up and if you want your balance transferred and old account closed this will be done.

Debit and pin number aren’t covered in the 7 day guarantee…can take up to 10 working days

Before you switch – Get the right account

Do you get rejected when you apply?

Most current accounts require a credit check, where the bank assesseswhether it wants you as a customer. You may be rejected for one ofmany reasons. Don't assume because one doesn't want you, none ofthe others will .

Are you always in credit?If you never touch your overdraft, not even by a pound or two, youshould grab the account that pays the most interest on your positivebalance .Do you go overdrawn?If your balance creeps into the red or stays permanently overdrawn, youneed an account that charges you as little for using your overdraft aspossible.

Do you pay a fee for your bank account?Now, think about whether you’ve ever used those facilities. Are theyworth the price? For some they're not, but others save £100s/year.

Don't bank where you've got debtsIf you've got debts with the same provider you bank with, a rule called 'settingoff' means it can take cash without warning to paydown the debts.

www.moneysavingexpert.com


• The first thing to do is to talk to the bank, no matter what your problem is – whether you are disputing a payment, complaining about bank charges or simply unhappy with the service.

• Every bank has a formal complaints process to deal with problems and complaints. If you use it and still aren’t satisfied, you can take the complaint further with the Financial Ombudsman Service.

How to deal with problems with your bank


Word method

Create new pin number from a word using the number and letter system on your mobile. Word 9673

Date method

Use a significant date such as a birthday/anniversary. Better to use someone else's not your own.30th April =3004

Mobile method

Add a fictitious friend on your phone and the last 4 digits can be the pin number. George Clooney 07754437856 !!!

Remembering Pin Numbers


Choosing credit


Types of credit

• Personal loan • Store card • Credit card• Door step lender• Payday loan • Overdraft• Hire Purchase


Choosing Credit

Important note

Interest rates can vary considerably as there are a

number of factors that are taken into account such as;

the individual’s credit rating, the size of the loan, current market rates.

APR /Annual Percentage Rate /Interest

£ If you borrow money at a 10% interest rate for a year, it will cost you 10% of the amount borrowed to do so. £100 will cost £110

£ This needs to be repaid along with the original money you borrowed.

£ The higher the interest the more you have you pay back.


The cost of creditSandra, Alex, Kyle and Carlos each need to borrow £100.

Sandra buys what she needs on her credit card. She pays back £9.50 a month over 1 year.

£9.50 x 12 = £114

Alex borrows the money from a doorstep lender and pays back £3.50 a week over 1 year.

£3.50 x 52 = £182

Kyle gets a bank overdraft and pays £5 a month over 2 years. £5 X 24 = £120

Carlos gets a loan from the credit union and pays back £9 a month over 1 year.£9X12= £108

1.Who pays the most interest? 2. Why would someone choose the more expensive options?

• Payday loans are short-term loans designed to tide you over until payday, but they’re an expensive way to borrow.

• You should only ever get a payday loan if you’re 100% certain you can repay it on time.

• According to Which?, the average payday lender charges £25 interest for every £100 borrowed if you pay it back within 28 days. That’s an APR of 1,737%.

• As a comparison, the average credit card would charge you £1.50 at an APR of 18%.

• If you can’t pay back the loan on time, the fees and interest can soon mount up.

• If you extend your loan you will have to pay more interest and possibly other fees. You could be left with an unmanageable debt as the costs can quickly increase.

• You may also find it easy to get another payday loan from a different company at the same time.

It’s important that you avoid taking out more than one payday loan at a time.



£ How much do you have to pay each month or week?£ For how long? £ What’s the APR?£ What do you have to pay back altogether?£ Are there cheaper ways to get the money you need? £ If the offer is ‘0% interest for a certain period, how long and

what is the interest when its over? £ Is the credit agreement clear? Can you take it away to look at

before you sign it? £ If insurance is included – is it useful, or cheaper elsewhere?£ Can you afford the repayments?£ What happens if you miss a payment?

Choosing credit tipsFind out ………


Budgeting & Saving


• A budget is nothing more that a list of your income and expenditure.

• Income is wages, benefits , maternity pay etc

• Expenditure – Everything that goes out - Rent/mortgage, Household bills, Travel costs, Christmas!!

• Keep a spending diary as its easy to underestimate how much we spend. www.consumercouncil.org.uk

• Hold on to receipts, bank statements.

• Set a date to tackle your budget with all this information.

BUDGETING

http://www.consumercouncil.org.uk/


Why budget?• Avoid getting into debt

• Successful budgeting creates strong spending and saving habits.

• Plan and save for the future

• Feel more in control and less stressed about money


Budget tipsIt is worth re-doing a budget when things change such

changing jobs, having a baby etc

• Use weekly or monthly amounts – don’t mix them up!• Use a calculator• To convert weekly monthly: x 52, then, 12• To convert monthly weekly: x 12, then, 52• Make sure amounts are realistic• Keep a record of bills • Make a rough copy first, so you can make mistakes• Don’t forget travel costs, fines• If there are any loan repayments, include these • Include an amount for emergencies and things like Christmas

and birthdays

Budgeting and Saving tipsGood budgeting can help keep you out of debt

or allow you to save

Switching - See how much you can save

• Bank accounts• Gas, Electric, Oil• Phone - home and mobile• Broadband• Digital services• Insurance • Credit, loans

Consumer council comparison on providers of essential services in Northern Ireland

• Benefit Check – see local CAB • De-clutter & sell it – ebay, gumtree,

carboot sale• Loyalty reward team - Vouchers/Points –

Tesco, Nectar, Boots • Money off coupons • Grants – home/small businesses • Tax rebate for uniform wearers• Check if you're due a tax rebate• Find lost assets• Get paid to click – paid online surveys -

The key is while some of these sites pay small amounts, add them all together and it can turn into an annual

bonanza of £1,000s.


• Buy one and get one free• Bulk buy• Turn heating down 1°• Downshift shopping• Switch to cheaper fuel supplier• Get discounts for paying bills by direct

debit• Make a shopping list and stick to it

(Don’t shop when hungry)• Join a library or toy library• Make packed lunch instead of buying• Join school car run and save petrol

costs

My Money Making TipsSome different ways for you to maximise your income

www.moneysavingexpert.com

Martin’s Money Mantras

SAVE A BUNCH PACK A LUNCH Homemade lunch rather than bought?

£5x5 days =£25 per wk x 52 wks per year Potential saving £1300

Going for Coffee ? £2 x 5days x 52 wks = £520 per year on coffee

(not including a scone!)

Quit smoking !£6 x 7days x 52 wks = £2184

Saving weekly rather than monthly £20 x 12=£240£5x52 = £260

Weekly savings

• Having a budget can help you manage your money, avoid getting into debt, plan and save for the future and feel more in control and therefore less stressed about money.

• It can be extremely difficult to save if you’re living on benefits or a very low income but even a very small amount of savings can make a difference – £1 a week is £52 by Christmas!

• It is important to know that SAVING is a part of budgeting and can help stop you getting into debt by putting money aside for things you know are coming up bills, Christmas or other festivals or for emergencies.

• Start teaching your children about saving and budgeting from an early age, make it a HABIT!

• If you’re an impulse buyer give yourself a cooling off period, you may find you aren’t as keen 24hrs later.

• Set alarms or dates in your diary 6 weeks before your 0% credit card deal or insurance is up to shop around.


Dealing with debt


Credit is debt under control.

Debt is credit out of control.”

Causes of Debt

High spending on consumer goods and entertainment Losing a job/unable to get a new job Leaving home Being ill Becoming disabled Moving into new home A bereavement Problems with benefits such as delays, overpayments Low levels of benefits, training allowances and wages Having a baby Drug or alcohol dependency Remaining in education Problem gambling A relationship ending

Debt is often associated with unexpected changes in life.It could be the loss of income or arrival of one or more bill

or both



A priority debt is one where, if it is notrepaid, could lead to:

EvictionPrison

Disconnection

OR

The client needs the debt to be treated as a priority

PRIORITY DEBT


Priority bills Consequences of not paying

Electricity and gas • You could be cut off• Pre pay meter installed

Rent or mortgage • You could lose your home TV licence • You could have money taken from your

benefits or wages• You could get a very big fine• You could go to prison

Maintenance for others, including support for children

• You could have money taken from your benefits, wages or bank account• You could go to prison

Secured loan (A loan that is taken out using your home as a guarantee)

• You could lose your home

Court fines • A court-appointed enforcement officer can be sent to take your belongings and sell them to pay your debt.• You could have money taken from your benefits or wages.•You could go to prison.


Non - Priority bills Consequences of not paying

Mobile phone contractCredit cardsStore CardsPersonal Loans (unsecured)OverdraftsPayday loansDoorstep Lender

These are often called credit debtsYou cannot be imprisonedYou may be taken to court and ordered to repay the moneyYour credit rating may go down making it harder for you to borrow in the futureThe amount you owe may go up a lot due to the interest charged

Loans from friends/family

Personal Debts are not classed as priority debts but they can be very significant. Relationship breakdowns with friends and

family over money can have a serious impact on person emotionally and practically.

Loan shark It is illegal to lend money without a license. These people charge a high rate of interest. The consequences of not meeting

repayments is often unpleasant involving threats and even violence.

Benefit over payment Can be directly deducted from benefits

Other bills and debts (non priority debts)


There are many different reasons why we get into debt.

Knowing what can happen when certain bills and debts are not paid can help us to

prioritise the most important ones and avoid the most serious consequences.


Don’t ignore the problem/tell someone as it won’t go away!

Get in touch with your creditors and explain the situation and that you are getting help with your debt.

Always keep copies of letters received from creditors

Don’t borrow more money

Work out a personal budget

Get advice from Citizens Advice or another independent advice agency

Dealing with debt


Where to get help and support


Sources of help and advice on money matters

• Citizens Advice

• Advice NI

• Debt Action NI

• Consumer council

• Credit Union

• MLA advice centres

• Christians against poverty

• Support workers/Community associations

• Online services – beat the recession/money advice service

The CAB Network• 28 main offices (bureaux)• Over 110 outreach services• Bureaux provide advice and information to people in need in over

140 locations

HOW WE DELIVER SERVICES• Face to Face• Phone• Email

Digital ServicesAdviceguideA2B Calculator

Projects – CAB mymoney Legal Support

CAB offer information and advice on the following issues

• Welfare benefits

• Employment

• Consumer

• Immigration

• Legal

• Health

• Debt and Money Advice

• Housing

• Education

• Tax

• Utilities

• Relationships

Useful free websitesAdviceguide www.adviceguide.org.uk/nirelandThe following website will give you the information you need to make the right choices, including help to deal with your debt problems, how to avoid losing your home and how to get your finances back into shape.

Beat the recession www.beattherecession.me This website provides information and advice on Money and Debt issues for people affected by the recessionin Northern Ireland. Use the links to view frequently asked questions, download useful resources in the helpfulTools section, and chat online with our experienced advisers

Advice4debtni (a4e) www.advice4debtni.comFree, government funded, independent debt advice for the people of Northern Ireland

Consumer Council for Northern Ireland www.consumercouncil.org.uk/money-affairs/The Consumer Council works to help all consumers gain the skills and confidence to manage their money andmake it work for them.

Advice NI - http://www.debtaction-ni.net Advice NI's Debt Action NI website offers a series of self help fact sheetsand leaflets, a Frequently Asked Questions section provides answers to the most common money/debt advice queries.Debt Action NI Advisors provide money/debt advice throughout NI. This is a free, confidential and impartial serviceopen to everyone.

Money Advice service - http://www.moneyadviceservice.org.uk/yourmoney/At the Money Advice Service we believe that the right money advice can make a real difference to your life.

Financial Ombudsman - http://www.financial-ombudsman.org.uk. The Financial Ombudsman Service wasset up by law as an independent public body. Our job is to help settle individual disputes betweenconsumers and businesses providing financial services - fairly, reasonably, quickly and informally.

http://www.adviceguide.org.uk/nireland

http://www.beattherecession.me/

http://www.consumercouncil.org.uk/money-affairs/

http://www.debtaction-ni.net/

http://www.debtaction-ni.net/

http://www.moneyadviceservice.org.uk/yourmoney/

http://www.financial-ombudsman.org.uk/

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