New Year, New You !
My Money Make Over
Aileen Hutton
&
Nichola MacDougall
Financial Capability Officer
The Charity for your Community
Money management education
and training from Citizens Advice NI
my money aims to
empower individuals
to budget, borrow
and save with confidence!
Attitudes to money
Banking
Choosing Credit
Budgeting & Saving
Dealing with debt
Information & Support
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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)
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One thing you like spending money on
One thing you don’t like spending money on
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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
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Money management
Northern Ireland
• 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
(Financial Capability Strategy for Northern Ireland DETI)
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BANKING
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Types of accounts
Basic Bank account
Current account
Saving accounts
Post office Accounts
Credit Union
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In Northern Ireland we have the lowest proportion
of households with current accounts compared
to rest of the UK.
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Other options
Post office account
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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
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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
Why have a bank account?
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Common Banking problems
Financial history
Paid wages/benefits
Pay bills automatically
Keep money safe
Online shopping
Access to ATM
Manage money easier-online
or statements
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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
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• Its FREE
What are the benefits to
Online Banking
• 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!
Why Switch?
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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
How to switch in 7 days
Three -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 assesses
whether it wants you as a customer. You may be rejected for one of
many reasons. Don't assume because one doesn't want you, none of
the others will .
Are you always in credit?
If you never touch your overdraft, not even by a pound or two, you
should grab the account that pays the most interest on your positive
balance .
Do you go overdrawn?
If your balance creeps into the red or stays permanently overdrawn, you
need an account that charges you as little for using your overdraft as
possible.
Do you pay a fee for your bank account?
Now, think about whether you’ve ever used those facilities. Are they
worth the price? For some they're not, but others save £100s/year.
Don't bank where you've got debts
If you've got debts with the same provider you bank with, a
rule called 'settingoff' means it can take cash without warning to pay
down the debts.
www.moneysavingexpert.com
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How to deal with problems with your bank
• 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.
Remembering Pin Numbers
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
!!!
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Choosing credit
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Types of credit
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Personal loan
Store card
Credit card
Door step lender
Payday loan
Overdraft
Hire Purchase
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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.
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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 credit
Sandra, 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?
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• 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.
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Choosing credit tips
Find out ………
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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 The
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your Community
Budgeting & Saving
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BUDGETING
• 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.
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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
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Budget tips
It 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
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Budgeting and Saving tips
Good 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
My Money Making Tips
Some different ways for you to maximise your income
• Buy one and get one free
• Benefit Check – see local CAB
• Bulk buy
• De-clutter & sell it – ebay, gumtree,
carboot sale
• Turn heating down 1°
• Loyalty reward team - Vouchers/Points – • Downshift shopping
Tesco, Nectar, Boots
• Switch to cheaper fuel supplier
• Money off coupons
• Get discounts for paying bills by direct
• Grants – home/small businesses
debit
• Tax rebate for uniform wearers
• Make a shopping list and stick to it
• Check if you're due a tax rebate
(Don’t shop when hungry)
• Find lost assets
• Get paid to click – paid online surveys - • Join a library or toy library
The key is while some of these sites pay small amounts,
• Make packed lunch instead of buying
add them all together and it can turn into an annual
bonanza of £1,000s.
• Join school car run and save petrol
costs
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Martin’s Money Mantras
www.moneysavingexpert.com
Weekly savings
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
• 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
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Credit is debt
under control.
Debt is credit out
of control.”
Causes of Debt
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
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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
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PRIORITY DEBT
A priority debt is one where, if it is not
repaid, could lead to:
Eviction
Prison
Disconnection
OR
The client needs the debt to be treated as a
priority
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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.
The Charity•You
for your
Community
could
go to prison.
Other bills and debts (non priority debts)
Non - Priority bills
Consequences of not paying
Mobile phone contract
Credit cards
Store Cards
Personal Loans
(unsecured)
Overdrafts
Payday loans
Doorstep Lender
These are often called credit debts
You cannot be imprisoned
You may be taken to court and ordered to repay the money
Your credit rating may go down making it harder for you to
borrow in the future
The 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
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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.
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Dealing with debt
 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
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Where to get help and
support
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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
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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 Services
Adviceguide
A2B Calculator
Projects – CAB mymoney
Legal Support
CAB offer information and advice on the
following issues
•Welfare benefits
•Debt and Money Advice
•Employment
•Housing
•Consumer
•Education
•Immigration
•Tax
•Legal
•Utilities
•Health
•Relationships
Useful free websites
Adviceguide
www.adviceguide.org.uk/nireland
The 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 recession
in Northern Ireland. Use the links to view frequently asked questions, download useful resources in the helpful
Tools section, and chat online with our experienced advisers
Advice4debtni (a4e)
www.advice4debtni.com
Free, 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 and
make 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 sheets
and 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 service
open 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 was
set up by law as an independent public body. Our job is to help settle individual disputes between
consumers and businesses providing financial services - fairly, reasonably, quickly and informally.
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