making the most of every penny - north tyneside · 4 my money matters budgeting the key to looking...

My Money MattersMaking the most of every penny

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2 My Money Matters

Budget SheetWork out how much your income is and how much you arespending. Check this regularly to make sure you are not livingbeyond your means and getting into financial difficulty. If you getpaid weekly work it out weekly. If you get paid monthly work itout monthly.

IncomePay after tax

Grants

Benefits

Income from Savings

Other

Spending(Priority Spending)Food

Mortgage / Rent

Council Tax

Electricity

Gas

Water

Phone / Internet

TV Licence

(Travel)Bus Fares

Car

Other

Total

(Financial Products)Loans / HP

Credit Cards

Savings

Insurances

Other

(Leisure)Going Out

Alcohol

Cigarettes

Satellite

Holidays

Other

Total

This leaves me with an available income of £

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My MoneyMattersMaking the most ofevery pennyIt’s your money so you shouldlook after it wisely. If you don’tthere are plenty of otherpeople who will.

We all need to keep a track of ourmoney to make sure we can manageour home and pay our bills on time.Paying people late can lead to morecosts and make it difficult to get the bestdeals. No matter how much or howlittle money we have we can all benefitfrom reviewing our finances on aregular basis.

North Tyneside Council has puttogether this easy to use guide to someinformation and advice that is availableto help you manage your money better.

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BudgetingThe key to looking after yourmoney is knowing what moneyis coming in and moreimportantly knowing howmuch you are spending. Thebest thing you can do is write itall down on the budget sheeton page 2.List all the money you receive on aregular basis (income) and all themoney you spend on a regular basis(spending). After taking away yourspending from your income you will be

left with a sum of money, this issometimes called your disposableincome. If your spending is far greaterthan your income you need to takeimmediate action. There are peoplethat can help and advise. Details arelisted at the back of the booklet.

You must be realistic and honest withyourself. Working out your outgoingsmakes it easy to identify what you reallyshould be spending your money on andshows you what you are actuallyspending it on. Writing everything downcan often surprise you, more often itwill shock you. Sometimes this is justthe shock you need to prompt you totake action and fix your finances.

Use the budget sheet regularly to makesure you are making the most out ofmanaging your money.

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Dealing with DebtIf you do get into financialdifficulty – DON’T PANIC,THERE IS HELP AVAILABLE1 Do not ignore the problem

Ignoring a problem does not makeit go away. The longer you leave itthe worse it will get and it will costyou more. Talk to the people youowe money to. The earlier you dothis the easier it will be. This givesthem the opportunity to offer helpand it also shows that you arewilling to pay your debts.

2 Help is availableYou do not have to do this on your own.

We are here to help, we will findthe right person, free of charge, togive you the advice you need. Bewary of companies who offer debtadvice but have hidden charges.Our contact details are shown atthe back of the booklet.

3 Check your payIf you are working make sure youare receiving at least the minimumwage and check your tax code isright. The Pay & Work Helpline(0800 9172368) can do this foryou.

4 Are you getting enough?Check that you are claiming andreceiving all of the rebates andbenefits you are entitled to. Forexample, if you pay rent or CouncilTax you may be entitled to HousingBenefit and/or Council Tax Benefitfor the place where you live. Thereare also Council Tax discounts andexemptions which may be availableto you. Contact us and we can giveyou further information.

5 Money Health CheckWork out your income andspending. This information isessential as a starting point forpeople to help you. Use the budgetsheet on page 2 to do this.


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6 What do you owe?Make a list of all the money youowe. Be open and honest withyourself. This is an opportunity todeal with all your debts in one go.

7 What debts must you pay first?Warning – non payment of somedebts could lead to

• Losing your home

• Going to prison

• Losing your belongings

These are called priority debts andinclude rent, mortgage, loanssecured against your home andCouncil Tax. Negotiate with thesecreditors first as the action that canbe taken against you may besevere. They are more importantthan other creditors that maypressure you for payment.

8 What about my other debts?You may have other debts that arenon-priority, which could includecatalogues, credit cards, store cardsand loans not secured against yourhome. These types of debts are notas important as priority debts and

there may be an opportunity toreduce your regular payments.Reducing payments may affect yourcredit rating and ability to obtainfurther credit so it is always wise toseek free advice on how tonegotiate these debts. Details onorganisations who can help areshown at the back of the booklet.

9 High Interest DoorstepLendingIf you have a doorstep loan makesure you check how much you arepaying back. Some doorsteplenders charge interest rates of200%. You may be able to savesubstantially on the repaymentamount by discussing whether youcan transfer your loan to a moreaffordable loan with the CreditUnion. Contact details for NorthernOak Credit Union are given at theback of the booklet.

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10 Loan Sharks (Illegal Money Lenders)Loan Sharking is illegal. If you haveborrowed from a loan shark you donot have to pay this money backand you should get help now bytelephoning the Illegal MoneyLending Team. (0300 555 2222)

Finally - remember you are notalone, being in debt is somethingnobody plans to do and it canhappen for lots of reasons. If youfeel your debts are getting out ofcontrol then the sooner you act thesooner you can get your life backon track. Being in debt is not acrime. If you face up to the problemof debt openly and honestly youmight be surprised how much freehelp and support is available.Contact details are shown at theback of the booklet.

The government has launched awebsite ‘Real Help Now’ withmore in depth information ondealing with debt issues.www.realhelpnow.gov.uk

The Consumer FinancialEducation Body (CFEB) offers afree money guidance service;Moneymadeclear. The serviceis available by appointmentwith a trained local guide, bytelephone 0300 500 5000 or via the internet atwww.moneymadeclear.org.uk


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Borrowing Money The most important question to ask is – Can you afford toborrow?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 totake a loan for Christmas presents andstill be paying it back the followingChristmas!

Loans, overdrafts and buying on creditare all ways of borrowing money.Different methods suit different types ofpeople and situations.

Whatever type you choose, it’simportant to make sure you’ll be able toafford the repayments. To work out ifyou can afford to repay a loan, why notuse the budget sheet on page 2 of thisbooklet. Your disposable income mustbe higher than the monthly repaymentamount being requested by the person

offering the loan. If it isn’t, you can’tafford to repay it.

You must remember that paying backloans or credit cards may become aproblem if, for example, interest ratesgo up or your income goes down. Youshould also be careful of consolidatingdebts into a loan secured on yourproperty as this may put your home atrisk if you are unable to make thepayments.

Read the terms and conditions of a loanvery carefully before you sign up toanything. Shop around and see whatare the best options for you.

TIP: The Office of Fair Tradingprovides information on pointsyou should consider beforesigning any loan or credit deal.www.oft.gov.uk

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Affordable Buying &BorrowingSome people have difficulty inbuying goods and borrowingmoney because of their credithistory, lack of credit history ortheir general circumstances.

They are often forced to buyor borrow from companieswho charge huge amounts ofinterest. If this applies to youthere are more affordableoptions available. Talk toNorthern Oak Credit Unionthey may be able to offer youalternatives, their contactdetails are given at the back of the booklet.

TIP: If you do buy or borrowfrom high interest lenders be sureto find out how long you will bepaying and how much you willeventually pay back. You shouldalso be wary of being soldadditional insurance that you maynot need. For example,breakdown cover on a newsettee.


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Budgeting LoansIf you are in receipt of certainbenefits you may be able toapply for a budgeting loan. Abudgeting loan can help youpay 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 itemsabove.

Budgeting loans are interest-free so youonly pay back the amount youborrowed. You can apply for abudgeting loan if you or your partner,have been receiving Income Support,Income-based Jobseeker’s Allowance orPension Credit for at least 26 weeks.Contact your local Jobcentre Plus Officeor download a form from the website.www.jobcentreplus.gov.uk

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What is APR?APR stands for the AnnualPercentage Rate of charge. You can use it to comparedifferent credit and loan offers.The APR includes importantfactors such as:

• 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 tomake compulsory.

All lenders have to tell you what theirAPR is before you sign an agreement. Itwill vary from lender to lender.Generally, the lower the APR the betterthe deal for you, so if you are thinkingabout borrowing, shop around.

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Questions to ask the lenderIf you find a deal with a low APR, askthe lender the following questions:

• Does the interest included in theAPR vary or is the rate fixed?If the rate is variable, yourrepayments could go up or go down.If the rate is fixed, your repaymentswill stay the same.

• Are there any charges that are notincluded in the APR?This could include charges forservices such as optional paymentprotection insurance. If so, makesure 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.

• What are the conditions of the loanor credit and do they suit you?For example, do you have a choiceabout how and where you make therepayments? If you suddenly havespare money, can you pay the loanoff early – without penalties?

• Can you afford the monthlypayments?A more expensive loan (with a higherAPR) could have lower monthlypayments if they are spread out overa longer period of time. That mightsuit you better if your budget is tight,even though you would pay more inthe long run.

TIP: Check the APR. All lendershave to tell you what theirs is, soyou can compare like with like.For more information go towww.moneymadeclear.org.uk

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EmergenciesIn an emergency you may betempted to take an instant loanfrom a doorstep lender or anillegal money lender who willcharge excessive amounts ofinterest, there are betteralternatives.

Crisis LoansIf you need financial help with anemergency or disaster you may be ableto get a Crisis Loan. This is an interest-free loan from the Social Fund that youpay back.

You can apply for a Crisis Loan if all thefollowing apply:

• You’re aged 16 or over

• You don't have enough money tomeet your or your family'simmediate short term needsbecause of an event or disaster

• Without the loan there will be aserious damage or risk to your oryour family's health or safety

For more information contact your localJobcentre Plus or DWP office or go towww.direct.gov.uk

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Credit UnionsMost people think that you can only geta loan from a Credit Union if you havesaved with them, although it ispreferable, this is not strictly true. TheCredit Union may be able to providesmall instant loans for non-savers. Theloans are at a slightly higher interest ratethan their other loans but are still at agreatly reduced rate to that of thedoorstep lenders. Contact details aregiven at the back of the booklet.

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Credit Union LoansThe table below shows how much youare likely to pay back if you borrowedfrom a credit union rather than usingother lenders.

Loan Typical Number Weekly Total Total amount APR of amount repaid interest

weeks 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 26.8% 52 £6.50 £338.00 £38.00

*information correct as at 11.02.10.

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ShoppingIt is hard not to be tempted tobuy things that you do notneed or will not use. Shopsand supermarkets make themost of customers who areunprepared. Buy one get onefree and three for two offersare only good value if youwould have bought themanyway.

• Always write a shopping list and stickto it

• Only buy what you need and notwhat you think you need

• Do take advantage of offers but onlyif it is a product you use

• Do try shops own brands as they areoften a lot cheaper

• Try and shop locally or at a market,food is often fresher and you can buythe amount you need and you willhave less waste

• Do not go food shopping when youare hungry

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It’s good to shop around to get the bestdeals, window shop, use the internetand comparison websites, prices canvary considerably especially on larger ormore expensive items. The ‘best’ labeldoesn’t always mean the best buy.Internet prices can be 10 – 15%cheaper. If you can, save for bigexpenditure rather than using credit orbuying from catalogues. Interest costscan be high and catalogue prices areoften more than in the shops or online.Join the local Credit Union. You cansave safely and borrow wisely at anaffordable rate.

There is always more satisfaction frombagging a bargain than paying over theodds.

TIP: If you don’t have access to acomputer all North Tynesidelibraries have computers withInternet access. Contact us formore information on the‘People’s Network’.

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Maximising your incomeRunning a home and lookingafter yourself and your family isexpensive. One way of helpingis to maximise your income.That means making sure youget all the money you areentitled to and also making themost of the money you have.Every year about £2 billion of benefitsgo unclaimed. This might be because:

• People don’t know what they areentitled to

• They are scared of complicated rules• They find it difficult to complete

forms• They think they are receiving

handouts or might lose theirindependence

• They don't know they can claim evenif they are working.

It is important that you make sure youapply for all the rebates and benefitsthat you are entitled to. If you pay rentand/or Council Tax for the place whereyou live you may be entitled to HousingBenefit and/or Council Tax Benefit tohelp you pay these bills. You might thinkthat you are wasting your time if youonly get a small amount of Council Taxor Housing Benefit, but qualifying mayentitle you to other reductions. Forexample, prescriptions, dentaltreatment and pet bills at the PDSA. Wecan arrange a benefit entitlement checkso contact us for further details, or usethe benefit calculator on our website tosee if you are entitled.

If you already receive Housing Benefitor Council Tax Benefit but still have topay something towards these bills andare having difficulties paying the shortfall,you may be entitled to claim aDiscretionary Housing Payment. Youcan get a claim form from any customerservice centre or download a copyfrom our website –www.northtyneside.gov.uk/benefits

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Make the most of your money bygetting the best deals on gas, electricity,telephone, insurance etc. A lot ofcompanies know that people cannot bebothered to shop around for betterdeals and use it to their advantage byincreasing the prices for existingcustomers and offering the best deals toattract new ones. It takes very littleeffort to shop around and could saveyou quite a bit of money. If you haveaccess to the internet, use comparisonwebsites. Alternatively you cantelephone a few different companies forquotes. Sometimes just phoning yourexisting supplier and telling them youare shopping around for a better deal isenough to get them to offer you adiscount.

TIP: Think about the best way topay for goods and services. Somecompanies offer a discount forpaying on-line or by monthlydirect debit, if you are able to dothis you can save yourself a littlebit of money and spread the costthroughout the year.

Paying on a credit card can be expensiveif you don’t pay it off before you arecharged interest. However, there aresometimes insurance benefits frompaying for goods on a credit card ratherthan by debit card or cash. For example,if you book a holiday and pay for it bycredit card if the holiday company goesout of business your credit cardcompany will reimburse you.

Key Meters are the most expensive wayof paying for fuel. Sometimes if youhave arrears then you have very littlechoice because the supplier deductspayment of the arrears every time youtop up. There is however a limit to theweekly arrears amount that can bededucted and all suppliers must offer asocial tariff to avoid people falling intofuel poverty. You should contact yoursupplier to ask about their social tariff.

Making your home more energyefficient can help reduce your bills.Increasing your loft insulation, installingcavity wall insulation and having anefficient boiler are all ways to make yourhome warmer. For some people thiswork can be done free of charge forothers there are grants available.

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For further information,www.warmzones.co.uk 0191 2234199

Get a council EASE card to accessdiscounts on activities and leisurefacilities in the borough. There is also anEASE EXTRA card for under 17's, and apriority EASE card for people on certainbenefits. There are a lot of free activitiesand events in the area so make themost of them. Contact us for moreinformation.

If you regularly travel on the bus, metroor through the Tyne Tunnel you willsave money by investing in a pass.

TIP: Make some extra money byselling your unwanted itemsthrough internet auction websiteslike eBay or go along to a car boot sale.

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Basic Bank AccountsThere are 2 million adults in Britain whodon’t have a bank account. If youhaven’t got a bank account you couldbe paying more than you need to forlots of services. A Basic Bank Account isthe simplest form available and youwon’t need to have your credit historychecked to open one. All you need todo is visit a local branch of the bank youchoose and ask to open one. They willhelp you through the steps you need tofollow.

Having a Basic Bank Account meansyou 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 carrycash with you

• Basic Bank Accounts do not haveoverdrafts or provide cheque booksso you won’t get yourself intofinancial difficulties, but they willcharge you if they ‘bounce’ a directdebit so always make sure you haveenough money in your account tocover your bills.

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SavingSaving is a good way of putting moneyby for something planned likeChristmas, holidays or birthdays or tocover the cost of emergencies. Byputting your money into a savingsaccount you can save enough to coverthese costs and earn interest as well. Ifyou can it is always better to save thanto borrow to pay for many large orexpensive items, especially as interestrates on loans and credit cards can beextremely high. You also don’t have toworry about losing your money orhaving it stolen. Even if a bank goesbust, the Government guaranteespersonal savers will get their moneyback 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.

Different types of savings accounts offerdifferent rates of interest. Sometimes,however, to get a good interest rateyou will have to give the bank orbuilding society notice that you want towithdraw your money. This can be asmuch as ninety days. So if you think youmight need your money in a hurry lookfor an instant access account.

Even if you can only afford to save alittle bit each week it can soon add up.

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Contact DetailsNorth Tyneside Council Revenues & Benefits ServicesQuadrantSilverlink NorthCobalt Business ParkNorth TynesideNE27 0BY

0345 2000 [email protected]

Age UK North Tyneside(Age Concern and Help the Aged arenow partners in Age UK)0191 2808484www.ageuknorthtyneside.org.uk

Citizens Advice Bureau0191 2704485www.citizensadvice.org.uk

Community Legal Advice0845 3454345www.clsdirect.org.uk

Consumer Credit Counselling Service(CCCS)0800 138 1111www.cccs.co.uk

Consumer Direct0845 404 0506www.consumerdirect.gov.uk

DAWN (Advice) LtdFree independent debt advice for North Tyneside residents, 9am – 8pm0300 303 1613www.dawnadvice.org.uk

Department for Work and PensionsDisability Benefit0800 882 200Carers allowance01253 856 123www.dwp.gov.uk

Direct Govwww.direct.gov.uk

Jobcentre Plus0800 055 6688www.jobcentreplus.govuk

Money Made Clear0300 5005000www.moneymadeclear.org.uk

Northern Oak Credit Union72 Howard StreetNorth ShieldsNE30 1AF

0191 296 2611www.nocu.org.uk

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North Tyneside Employee Credit UnionQuadrantCobalt Business ParkNorth TynesideNE27 0BY

0191 643 5881

Shiremoor Credit Union60 Park LaneShiremoorNewcastle upon TyneNE27 0TL

0191 268 7280

National Debt Line0808 808 4000www.nationaldebtline.co.uk

Illegal Money Lending Team0300 555 2222www.direct.gov.uk/stoploansharks

The Pay & Work Helpline 0800 9172368www.direct.gov.uk

Pension ServicePension credits0800 991 234

Winter fuel payments0845 915 1515www.thepensionservice.gov.uk

Real Help Nowwww.realhelpnow.gov.uk

Office of Fair Trading08457 22 44 99www.oft.gov.uk

Warm Zone0191 2234199www.warmzones.co.uk

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The information in this booklet was put together by Revenues and Benefits Services 0345 2000 104. You can contact us at:

North Tyneside CouncilQuadrantThe Silverlink NorthCobalt Business ParkNorth TynesideNE27 0BY

Email: [email protected]

North Tyneside Council wants to make it easier for you toget hold of the information you need. We are able toprovide our documents in alternative formats includingBraille, audiotape, large print and alternative languages. For further information please call 0345 2000 104

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making the most of every penny - north tyneside · 4 my money matters budgeting the key to looking...

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