As your children grow up they will look to you for guidance and will even mimic the way that you use your money.  If you are an impulsive spender, if you are a scrooge, or even if you are somewhere in between chances are your children will be the same later in life.

It is never too early or too late to educate your children on the value of money.  Here are some ideas for you to consider:

• If you give your children pocket money, they will appreciate it and the things that they buy with it if they have to earn their cash rather than just getting whatever they want.  No matter how young your children are they can still be given simple tasks to do, such as making their bed, tidying their toys away or helping out in the garden. 

• Once you have established how they earn their money, discuss how they intend to use their new found wealth.  Do they want to save for a new toy, a new CD, a present for someone, or just put it in their piggy bank? 

• The endless nagging of a child that wants something can weigh you down, especially if you can not afford what they want.  Don’t go into debt to make your child happy as you could well live with this decision for what could be a very long time.  If you can not afford it, have an honest discussion with them – in terms they will understand.

• Look at ways of compromising on their expectations and setting new ones. For example, if they save for half of the desired object then you could pay for the other half, perhaps as a birthday or Christmas present.

• As your children become teenagers, perhaps you can help them to get a part time job that does not interfere with school.  This will teach them the importance of money and how money is not easy to come by. 

And later in life……

If your children are grown up and are working but are still living at home it is acceptable for you to expect a contribution towards food and household costs.  Not only will this help you with your bills, it will also prepare them for independent living and teach them good budgeting habits.  Even with a small contribution to your family expenses they will still be getting a bargain!

As always, if you would like to share ideas on how you teach your children that money doesn’t grow on trees, feel free to post your ideas on our forum http://boards.msn.com/UKMoneyboards/board.aspx?BoardID=1233

Homeowners Mortgage Support (HMS)

As the credit crunch hits and the jobs have dried up, you maybe struggling to meet your monthly mortgage payment. The government have introduced a scheme specifically for borrowers that are experiencing a “temporary income shock”. A temporary income shock can be anything that affects your household income, such as, redundancy or reduction in hours, loss of part time or a partner’s earnings, loss of benefit due to a child leaving school, or a grown up child unable to contribute board due to unemployment.

How does it work?

HMS involves changing your mortgage to interest only, and then reducing the payments for a specific period of time (up to two years). This reduction will be based on your financial situation and can be up to 70% of the monthly payment. This is not a payment holiday, and reduced payments do have to be repaid at the end of the scheme, which means that you will likely pay extra interest over the term of your mortgage.

Are you eligible?

• The scheme will only cover borrowers with a total mortgage of less than £400k, and less than 16k in savings.

• You must have been making regular payments (though not necessarily of the full amount due) over the five months before joining the scheme, unless you had agreed a payment holiday with your lender

Where do you go for help?

Speak to your lender: You can check to see if your Lender is participating in the HMS scheme at www.directgov.co.uk. If your lender is participating, they will also need you to meet certain eligibility rules before they make a decision and offer you the scheme.

Not all mortgage lenders are participating in this scheme; however, all lenders must try and offer help to borrowers before commencing any legal action for repossession of the property.  This is called forbearance, or pre action protocol, and may include reducing the mortgage to an interest only product, changing the payment date, or capitalising arrears.

What’s next?

CCCS will provide HMS advice, but please speak to your lender first who will refer you through a dedicated phone line.  If your lender is not participating, CCCS can provide you with general debt advice by contacting our free phone number on 0800 138 1111.

The most important thing to do is speak to your lender.  Even if you are not considering applying for HMS, or any of the other government rescue schemes, you must make contact as soon as you are unable to make a payment to your mortgage.

Do you find that your household costs’ are spiralling and you are struggling to meet your payments, how do you feel about having up to an extra £4250 per year tax free?!

Often people ponder over their budget and look at the areas they can cut back. How about getting rid of those spare boxes and having a good old spring clean and then renting that spare room out?

There is a government tax free scheme, called The Rent a Room Scheme, which allows you to have an income of up to £4250 per year tax free. Anything over this amount would have to be declared.

What could you do with an extra £354 every month? Clear those credit cards, pay off those priority arrears? Or even save for that well earned break.

Some of the Advantages of the scheme include:

ü      Earn an extra income without working extra hours

ü      A house sitter on hand to water those plants and feed the cat when you’re not around

ü      Extra money to clear your debts and get your finances back on track

ü      You would be able to claim expenses for utility bills and house insurance if you go over the allocated £4250 per year.

If all the above sounds like a good idea, then you also need to consider the down side of letting a room. If someone else’s dirty pots and smelly socks is enough to send you round the bend, you may want to set ground rules from the start, this may save a lot of tension further down the line. Things to consider could include smoking, pets and general tidiness.

If you still like the sound of the extra cash and don’t mind sharing your home, you will need to ensure there is an agreed notice period to end the agreement and also make an inventory of all the room contents. You will need to agree what the rent covers as well as date and method of payment.

If you would like further information, please click on this link that will take you to the Direct Gov website. 

From April 2009 Debt Relief Orders (DRO) are being introduced, so what’s all the fuss about?

What is it?

DRO’s are a new form of Insolvency designed to be cheaper than bankruptcy. They aim to help people who have few assets, little available income and relatively low levels of debt. There is no court involvement with the application; instead an approved intermediary such as the Consumer Credit Counselling Service would help you complete and submit an application if you meet the criteria.

What are the eligibility criteria?

In order to be eligible for a debt relief order you will need to meet the following qualifying conditions:

ü      You must have less than £15,000 debt. Certain debts are excluded, including student loans, secured loans, CSA arrears, criminal court fines

ü      You must have less than £50 a month surplus after your household priority bills have been paid

ü      You must have less than £300 worth of assets. This includes savings, shares, cars, caravans, antiques, jewellery and collectables

ü      You must not be a homeowner

How does it work?

The overall aim of the DRO is to help in releasing you from overwhelming debts.

Applications for a DRO will either be approved or rejected by the insolvency service.

Once a DRO has been agreed a hold will be put on your accounts, this is known as a moratorium period and in most cases will last for twelve months. During this period you will not make any payments at all towards the qualifying debts and your creditors will be unable to take any further action during this time. At the end of the moratorium period, you are discharged from liability for all the qualifying debts listed in the DRO.

What are the costs?

Before an application for a DRO can be considered, a mandatory court fee of £90 must be paid to the insolvency service.

If you would like the CCCS to see if a Debt Relief Order is an option for you, you can visit our free online debt counselling system Debt Remedy or if you would prefer, you can call our Helpline free on 0800 138 1111 to speak to a counsellor.

Travel can work out to be one of our main expenses over the month. Today we are looking at ways to reduce travel costs. Below we have listed some of the main costs related to travel.

Petrol Prices

Find the cheapest petrol station in your area. You can do this by looking on the internet. Some websites allow you to search on your postcode and they then give you a list of garages you could use in your area. Some examples of these are http://www.petrolprices.com/ and http://www.findcheappetrol.com/ 

Be vigilant, as some supermarkets do offer price reductions at the pumps if you spend so much in store, so this could be a great way of making savings.

Reducing Petrol Consumption

There are many ways of improving your fuel consumption and making your car more efficient. By cutting your speed, you will save at the pumps. Things you could consider are;  

• Use the left hand lane wherever possible on motorways - 56mph could use 25% less fuel than doing 70mph
• Check your car tyre pressure regularly
• Air conditioning and heated seats use a lot more fuel
• A full petrol tank adds weight to the car, therefore uses more fuel

Compare Quotes

Does your insurance provider offer loyalty bonuses? If not bin them, and move onto a better deal.

Use price comparison websites to compare insurance quotes, use more than one to make sure that the companies really are the cheapest.

Car Finance

If you are struggling with debts and you are on a tight budget, car finance can be a nightmare! One thing you really need to ask yourself, is this an essential in your budget? If you need a car, does it have to be one on hire purchase? Or could you get by with a cheap run around?

If you feel you can do without your car on HP, Section 99 of the Consumer Credit Act 1974 allows you to terminate your agreement and return the goods. This is known as Voluntary Termination (VT). Once you have handed the car back to the finance company, they will sell the vehicle at auction, and you would be liable for any wear, tear and shortfall but this does give you the opportunity to come out of the agreement if needed. If this is something that you would like to do, then you will need to have paid at least half of your agreement and you will need to put it in writing to the finance company to get the ball rolling. If you would like to discuss this in more detail, you can call our helpline on 0800 138 1111.

Cut Back on Unnecessary Travel

This can apply to bus users and car drivers. Walk whenever possible, not only is this more cost effective but it will also be a way of shedding those extra pounds – An all round winner!!

Car Share

Some councils have set up car share schemes all over the UK. Have a search for a car share group in your area. This will also help reduce the cars on our roads, and stop those big rush hour tail backs.

Parking

If you have to pay for your parking, does your work offer a discount scheme? City centre parking can work out expensive over the month. Check on the internet to see if anyone is has a garage or drive to let, this could again work out cheaper than commercial inner city companies.

In your area is there a Park and Ride system? If so, then you could look to use this to avoid the city centres extortionate prices.

Travel Passes

Local travel companies have a wide range of different passes available to suit everybody’s needs. Look up your local companies and see what the have to offer.

Generally yearly passes work out cheaper but are a big initial outgoing. Does your work offer an Interest free travel loan? If not, ask them if this is something they are willing to set up for their employees as you will be able to spread the cost. 

Forward Planning

As a general rule, the earlier you buy your ticket the cheaper it will be, so forward planning pays. When looking at the prices of train tickets, check what the cost of a single and then a return would be. Sometimes two singles can be cheaper than a return!

Mothering Sunday is always the fourth Sunday of Lent and has been since at least the 16th century.  This is why Mothers Day in the UK falls on different dates each year and sometimes even falls in different months.

In days gone by, young British children that worked as maids and servants were only allowed one day to visit their family each year and this was usually Mothering Sunday.   They would often be allowed to take a gift for their mothers of fresh eggs and baking.  The children would also collect wild flowers as they were making their way home. 

The old English Mothering Sunday has its roots in pre-Christian times, but modern-day Mother's Day - the cards, flowers, chocolates etc - was started in the United States. 

In modern times it is inevitable that businesses see the day as a way to make money.  However, many mothers would be happier with a homemade card because it shows some thought and effort has been put into it.

No one objects to spoiling their mother on her special day but there are other ways to do it rather than buying expensive flowers and chocolates.  With the credit crunch biting hard, here are some ideas:-

• Home cooked meal instead of restaurant meal
• A lie in and breakfast in bed.
• Offer to do the cleaning/ironing while she puts her feet up and reads a good book or has a leisurely soak in the bath.
• Basket of fruit.
• A letter or poem telling your mother why she is loved
• Home made chocolates/cakes/biscuits instead of buying expensive shop bought.  If you want to make these extra special you could present them in decorated box. 

 We have included a cheap and easy recipe for “Credit Crunchies” which children can make for their mums…..with a little adult supervision of course.

Warning! You may find that these “Crunchies” disappear very quickly and may not even reach mum!!

Credit Crunchies

• 75g white chocolate, or milk chocolate
• 2 tbsp golden syrup
• 30g Rice crispies

Method

Melt the chocolate with the golden syrup in a large bowl over a saucepan of simmering water. Add the crispies and gently stir in.

Spoon into mini bun cases and put into the fridge for 30 minutes to set.

As we all know household costs are on the rise and our last blog was the start of a series looking at ways to beat the current crunch.

Today we are exploring ways to reduce your food shopping bills.

Local Markets

Local Markets are a good place to start, especially for fresh fruit and veg. Markets generally work out much cheaper than supermarkets so you can grab yourself a bargain.

Own Brands

Set yourself a challenge to reduce your bill by swapping some of your usual items for the supermarket’s own brands – some of the leading companies even make some of the ‘no frills’ products, check the ingredients!

Discount Vouchers

The internet is a great way of picking up deals and discounts. There are a number of sites that you could look at for the most up to date deals. For example http://www.hotukdeals.com/ is a site that promotes various deals which other members find and post.

Check out any magazines as often these have money off vouchers that you could use, and stores sometimes have money off vouchers if you spend over a certain amount.

Bulk buy

If you have a larger family it may work out more cost effective to bulk buy products. This could include using a cash and carry or local supermarkets.

Be careful with ‘buy one get one free’ offers, often they can seem tempting but if they are perishable you could end up throwing the free one away!

Meat

Look at shopping for cheaper cuts of meat, they have the same nourishment and taste as the more expensive cuts but do require slower cooking.

Here are a few suggestions - brisket, beef skirt, mutton, breast of lamb, hock, shank or liver and kidney.

Dig out those old cook books and brush off the cobwebs. There is nothing more satisfying on a cold winter’s night, than tucking into good old fashioned stew and dumplings or a home made soup.

Cut Down on Waste

Planning your meals and only buying what is needed when you go shopping helps to cut down on waste, and will help reduce your bill.

If you do have left over food you could look at making this into another delicious meal for example, vegetables could be turned into a soup and left over chicken makes great stock which you can freeze until required.

Use Comparison Websites and Shop Online

Use price comparison websites such as http://www.mysupermarket.co.uk/. Not only are these regularly checked for the cheapest supermarket prices, they also take into account offers. So potentially you could swap and change supermarkets on a weekly basis to stay ahead of the game.

These are just a few of the many savings you could make, if you have any ideas or would like to let other members know about deals you can use our forum. This link will take you directly there.

You will be better off and a better person this New year if you follow our tips!

If you have any other tips, then add them to our page to share with others.

Cigarettes and Alcohol

Some people may say that all you are doing is burning your money, or pouring it down the drain when it comes to these costs.

We all may enjoy one of these pastimes but when you look at the costs it may make you think again.

A packet of cigarettes every 2 days (20 for approx £5) will cost you over £900 per year. Cutting this in half or even changing to rolling tobacco could help make a big difference to clearing your debts or just giving you a few more pounds in your pocket.

If your New Years resolution is to try and wean yourself of the ‘cigs’, the NHS have a helpline that may be able to find you help and support in your local area, call on 0800 022 4 332.

If you normally socialise with friends by going for a drink in a pub or wine bar, you could cut costs by arranging to meet at someone’s home instead.

You can buy a bottle of wine or a pack of beer at a lot lower cost at the super market, but you still get to socialise. This can also save on possible taxi fares.

If you compare the costs, you could buy a bottle of wine for as much as one glass costs in the bar. And cutting back in order to save money may also mean you feel healthier, slimmer and more in control.

Keep In Control of Your Finances

Managing your finances carefully can instantly make you feel richer. By checking your bank account at least once a week, you’ll be able to plan your finances better and know where the money is going.

Take Packed Lunches to Work

Spending £3 a day on lunch at work adds up to £780 a year. You could save a bit of cash by taking lunch with you to work. If you find sandwiches a bit boring, try taking in leftovers from the night before to warm up in the microwave.

Trim Down Your Direct Debits

Go through your bank statements and check any direct debits you have going out monthly.

Shop around for better deals on things like central heating cover, house insurance, mobile phone calls, etc. If you are unable to swap to another company, then ring your current supplier and see if they will agree to a reduced package rather than you going elsewhere or cancelling altogether.

Try Cheaper Equivalents

Obvious really, but if times are hard, then it’s time to cut out the champagne baths and buckets of caviar. Try cheaper equivalents of the things you normally buy and your money will go further. Many supermarkets offer discounted brands so switching to these could make a huge difference to your weekly shopping bill.

Do A ‘Debt Remedy’ Budget

Use our financial planning tool located on this page to create a monthly budget. Plan out how much you need to spend on every area of your finances and see what’s left for any debts. If your income is not enough to cover your expenditure then we can provide detailed, personalised advice to help your situation.

When it comes to your household bills and services, loyalty rarely pays and it is better to shop around to get the best deals.

We have put together a list of everyday household costs and ways that you could look to reduce these to beat the current crunch!

Gas and Electric

Try using an independent price comparison site such as http://www.switchwithwhich.co.uk. These sites will allow you to input your current usage and see if there is any saving to made. For the sake of a couple of minutes shopping around this may mean quite a large saving over the year. As prices are also on the increase you may wish to consider fixed plans – many suppliers are offering fixed prices for a number of years. Also, pay by direct debit – this will also make it easier to budget monthly and reduce the chances of running up a large bill.

Water

Is often overlooked when people are looking for reductions. In some households it may workout cheaper to have a water meter installed rather than standard rates. Your water company will be able to estimate your saving, and also you will be doing your bit for the environment. If you are already on a meter you could look to get a flush saver, this is a bag you add into your cistern to reduce the amount of water used when flushing.

Have a look on your supplier’s website as often they do have other great water and money saving tips.

Phones, Internet and TV Packages

If you have a mobile, internet and landline, you may be paying a huge amount every month. It pays to check whether you can get a package deal. There is a lot of competition around at the moment, so you could try and negotiate a better deal and play one company off against another.

BT have introduced a new call package to help people on Income Support, Income based Job Seekers Allowance and Pension Credit. This is called BT Basic. The package is designed to help people on lower incomes. The line rental is £13.50 a quarter and this also includes £4.50 to spend on calls. For full details of this please click on this link to visit BT’s website. 

A lot of companies are offering free internet as part of other deals. For example, sign up for a mobile and get free internet. Shop around to make sure the deal is as good as face value. Just because something is advertised as free does not necessarily mean you are getting a good deal overall.

Look at whole costs if you have a TV package. Do you watch all of the channels you are paying for? If you were to buy those you do watch as separate deals would it work out cheaper?

TV Licence

In some instances you may be eligible for a reduction. At the moment the full price of a licence is £139.50. If you have a black and white TV this would reduce to £47.00. If you are over the age of 74 you will be eligible for a short term licence because as soon as you turn 75 this is free!!! It is really important that if you are using a TV you have a licence so you don’t risk the £1000 fine.

Council Tax

Check you are in the right council tax band as you may be overpaying, you can do this by contacting your local council.

Possible reasons for reductions could include:

• If you are a single person you will be entitled to a 25% reduction.
• If you share your home with one adult or more who is not eligible to pay towards the council tax (if they are not your partner)

These are some of the ways you could save money. If you have any other ways of reducing costs that we have not covered, feel free to share your ideas on our message boards.

Stay one step ahead, your money is better in your pocket!

Christmas is fast approaching; the geese are getting fat… our thoughts turn to presents… Arrrgghh where to begin??!

As we all know Christmas can be hard on a tight budget and trying to find the right gift can be a headache and a large expense.

Hampers are a good way of tailoring the gift to the individual without breaking the bank. We have put together some ideas below – but you can be as creative as you like!! Share your ideas with us on the discussion board .

Ideas for Christmas hampers and gift sets

• A selection of speciality coffees with a personal coffee cup
• Teacup with a selection of herbal teas for the hippy chick
• A selection of special sparkling ciders (try saying that after a couple)
• Basket filled with deli cheese and home made chutney for uncle Dave
• Home made bread in a pretty basket filled with special jams – ideal for Gran
• An assortment of chocolate bars tied with a ribbon for the chocoholic
• Packets of muffin mixes with chocolate chips and a muffin baking tray
• A basket filled with a bottle of wine and glasses for the connoisseur
• Deck of cards and magic book to keep the family entertained on Boxing day
• Gel pens and pretty stationery
• Decorative napkins and napkin rings
• Decorative glass filled with sweets
• Nail manicure set
• Pretty box for keepsakes
• Special soaps 
• Make up gift set
• Car polishing set for dad
• Herbs and Spices for the master chef
• Homemade sauces and chutneys
• Pepper mill and fresh peppercorns and not for the faint hearted you could include some hot chilli oils!

Ever checked your bank account to discover you have 76p to last you the two weeks remaining until payday? Chances are that if you are living to a tight budget this will have happened at some point. Planning out a monthly income and expenditure budget will help, but it’s useless if you can’t make it work in practice. Here are a few tips on how to stick to a budget:

Spending Diary – One problem with trying to stick to a budget can losing track of where the money goes. To get an idea of what you spend your money on, it can help to keep a diary of every penny you spend. It may take a bit of work but after a few weeks you’ll have a better idea of where the money does go.

Savings Account – A good budget will include money for Christmas and birthday presents, car repairs and replacing clothes. These costs occur from time to time. So tuck away this money into a savings account in the months it is not needed, and you will have a bit of money ready for when one-off expenses come around. For example, you may not spend £20 every month on car repairs, but if you save £20 every month you should have enough when the MOT comes round.

Shop Around – Always make sure you are getting value for your money by shopping around. Making sure you are getting the best deals can save you large amounts of money. Price comparison websites will help to check the prices to find the cheapest deals.

Set Targets – When planning a budget there are some bills that are fixed at the same amount each month and are easy to plan out, but things like food and entertainment are tougher to keep track of. Set yourself a target of how much you can afford to spend and try to stick to it.

Be Green – Being environmentally friendly will usually be cost effective too. Walking instead of driving short journeys will save money on petrol as well as cutting down on carbon emissions. Making sure you use all the food you buy is also good for the environment and will make your money last longer.

Cut Back – OK, so this one is pretty obvious, but cutting back on things you don’t need will really help. Just cutting out one night a month going out and staying in with your friends instead leaves extra money to spend on other things.

These are just a few tips to help you stick to that budget but if you can think of anymore that work for you, why not share them on this page or let us know on our forum here.

Schools out for Summer!!!

But how are we going to keep the children happy – and how can we do it for the lowest cost possible???

Apart from the obvious problems of child care during the holidays (paying for play schemes, getting time off work, and generally juggling everything & everybody!), here are a few ideas to keep the children amused.

Check out any “Free“ local attractions, such as museums, art galleries, public gardens, not every ones idea of fun but you could always take a picnic from home (cheaper than on site cafes) and include a game of football or cricket to use up loads of energy.

Find out what’s on offer and ask the children if they would like to go –they might surprise you – your local council website may well have a list of summer events and opening times. You might not be interested in steam trains or gory scenes from the past – but they might be!

Get back to nature - walking is free! For many of us, the countryside or seaside may be reasonably close or within distance of a bus ride. Children of all ages love to paddle or climb (smaller ones under supervision-of course).

If you save shopping loyalty points, they often have offers on theme parks and zoos. You can check the latest offers on their websites.

For younger children, just doing something different is often fun – like taking a train or bus if you usually travel by car. Let them try their hand at cooking or gardening. Some simple baking ingredients or a pack of seeds are relatively cheap to buy.

Use your local library to borrow books or DVD’s, or arrange a toy swap with your friends who have children with similar ages to your own.

Older children may prefer doing something competitive – try to get friends and/or neighbours together to have your own sports day in a local park. Involve the children in planning the day – egg (hard boiled of course!) and spoon races, relay races, three-legged races, and sack races (using old pillow cases) are old favourites. And which children don’t enjoy the sight of their mum/dad/big sister/brother etc racing against each other?

Or if it’s raining (which it probably will be at some point!) use computer games to have tournaments.

Let them do a bedroom makeover. Decide on a budget and stick to it – a new coat of paint would do. Follow what the TV programmes do – take everything out of the bedroom, have a good clean and throw out any rubbish, sell anything unwanted and then “dress” the new room. Lots of supermarkets & discount stores sell low cost cushions and picture frames, etc. Just a simple change could make a lot of difference at very low cost.

Leave a message and let everyone know what’s happening in your area, or pass on any good websites that detail free attractions.

Or if you have had some successes with your family entertainment, pass on your good ideas…..

Travel costs are getting more and more expensive, whether you use public transport, or run a car. Here are our tips to save you money.

If you use the bus or train, make sure you are using the cheapest ticket. Most bus & train companies have weekly or monthly tickets. Some will require a photo-card, others are just purchased on the bus, or at the station.

This means a bit of organisation is needed, but it will also stop you spending extra daily money, because you need change for the bus or train. In addition it will give you a travel option for the weekend & evening, which could save on a regular taxi fare.

If you have children at high school, this can also help with the daily search for money for school fares.

Consider walking or cycling to work. Save money and get fit at the same time.

For any one off trips, try and book in advance to get the cheapest tickets.

Work out how much you spend on petrol & parking. Could you save money by using public transport? Make a diary of how much you spend; you may be surprised at the amount.

Look at the running costs of a car, calculate how much you need to cover car tax, insurance and spares, servicing and MOT. Shop around for car insurance, and check out the best deals for servicing, spares & MOTs. (see  www.moneysavingexpert.com)

If you do the School Run, can you start a car share with other parents, or look at a walking bus scheme for the children. Buy the cheapest petrol in your area and try to keep your car well maintained so that your engine’s running smoothly. Try and avoid fines & parking tickets – try to leave time to drive carefully & plan where you will park.

(see www.iam.org.uk)

Please share your tips for cheap travel options, or have you recently decided you can live without a car?  How much money have you managed to save? Let us know, here on our message board.

It’s nearly time to wave goodbye to winter, so it’s a really good time to de-clutter, so start with your finances.

Go through all your financial paperwork –bank statements, credit card statements, utility bills

Separate out (in sections if you wish) your bank statements/ credit or store card statements,  personal loan agreements/hire purchase documents, utility bills, insurance policies, car documents and personal items like wage slips, medical records and birth certificates.

Some documents need to be kept from year to year, for example P60 and tax documents.

It’s a good idea to keep at least one previous year’s bank statements. And keep hold of annual bills like council tax & water.

Shred anything that you do not need to keep (make sure you dispose of anything with personal details securely). Keep everything together in a filing cabinet or documents file.

Deal with all your post & emails, either daily or once a week

This means you will not miss anything important, you can update your budget with any changes to utilities or mortgage/rent, and you will be aware of any problems like overdue bills or missed payments immediately.

You can recycle any junk mail and avoid getting scammed, For example, if you receive a letter/email saying you have won the lottery and they want £20.00 to “release the cheque”, it’s extremely likely to be a scam!! However, if you are having money problems or have no one to discuss things with, it can sit around just tempting you to reply.

Be in control. You won’t actually have more money by having a filing system, but you will know exactly what is going in and out of your bank account. This means you can start looking at ways to save money & get a good deal where possible.

If you haven’t started a S.M.A.R.T budget – see previous blogs - think about doing it now.

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 to 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 Message Boards  to share your budgeting experiences and give us your tips.

Can you be S.M.A.R.T 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 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.