Citizens Advice financial capability

Transcription

1 TOP TIPS FOR DEVISING A BUDGET Work out your total income include any benefits you may be in receipt of, wages (after tax and national insurance) and any other regular income such as child maintenance or income from non-dependants. Check to see if you are claiming all the benefits that you are entitled to (Citizens Advice can help to check your entitlement). Note down the amount you spend on essential outgoings these are things like rent, council tax, gas, electricity and your TV licence. Write down how much you spend on day to day living this would include items such as food, clothing, travel and entertainment. Allow an amount for occasional outgoings such as birthdays and Christmas (it s a good idea to allow an amount each month for these, if at all possible). Try to save something each time you get paid, however small. These savings can be useful for emergencies or if your income varies. Make sure that both your income and outgoings are worked out over the same time frame (i.e. weekly, fortnightly and monthly). Add up both the total amount for income and outgoings. Review this regularly - this enables you to keep track of any changes in income and adjust your budget accordingly.

2 BILLS, BILLS, BILLS If some bills are not paid, there can potentially be serious consequences for not doing so. These are known as priority debts. The following are examples of priority debts: Rent if this is not paid, you could ultimately be evicted from your house. Council tax if this is not paid, you could end up having money taken from benefits or wages, bailiffs could enter your home and take goods or as a last resort, you could be sent to prison. Gas & electricity if this is not paid, you run the risk of your supply being disconnected. TV licence if this is not paid, then you could be fined by the magistrates court, bailiffs can enter your house to take goods and ultimately, you could be sent to prison. Court fines if these are not paid, bailiffs could enter your house to take goods and ultimately, you could be sent to prison. Child maintenance if this is not paid, then money could be taken from wages, benefits or your bank account, bailiffs could enter your house to take goods, your driving licence could be taken away or ultimately, you could be sent to prison. Income tax/vat if this is not paid, then you could be chased by debt collection agencies, bailiffs can enter your home to take goods, court action could be taken and you could be made bankrupt.

3 Other debts are known as non-priority debts. If these are not paid, a creditor could start county court action to recover the money. If this is not successful in recovering the money, then a creditor could send bailiffs to take goods from your home. A non-priority debt could include the following: Catalogues Credit cards Store cards Personal loans Bank overdrafts Water Benefit overpayments Money borrowed from family and friends Sky TV Telephone (unless it is essential you have a phone) Internet Payday loans Agencies and individuals who visit door to door, such as Provident and Greenwood However, every person s situation is different, and some of these may be important to you.

4 GAS & ELECTRICITY If you are with two different suppliers for your gas and electricity, you may want to think about using the same supplier for both. Often, energy suppliers will offer a discount for supplying both gas and electricity Check that you are getting the best deal on your gas and electricity. To do this, you could use an accredited price comparison site to check tariffs from the various energy companies. You may want to consider paying by monthly direct debit if you pay your bills quarterly or pay via prepayment meter, this can work out more expensive. Often, energy companies will give a discount on your energy bill if you pay by monthly direct debit. Switching to paperless bills can save money. Another option may be to look at joining a collective switching scheme. This is where lots of people (usually via a third party) join together to negotiate a better deal on their gas and electricity. Check to see if your house is well insulated and draught proofed. You may be able to get assistance from the council for help with the costs of insulating and draught-proofing your home.

5 FOOD Write a shopping list and stick to it! Don t shop when you re hungry you re more likely to spend more on products you don t need. Look at cheaper alternatives often there is very little or no difference between a premium and an economy brand product, especially on the basics such as pasta, milk, bread and butter. Buy One, Get One Free or 3 for 2 consider whether you really need these. If it is a product you would use, and can store such as toiletries then it may be worth buying. Often these offers are not as cheap as they first appear anyway. Look at reduced to clear or whoops items. Often, these items can be frozen, and sometimes (depending on what time of day you shop), you can get food for 75% or more off. SUPERMARKET ROUGH REDUCTIONS SCHEDULE Up to 25% off Up to 50% off Up to 75% & up Asda 12 noon 5pm 9pm Morrisons - 5pm 7pm Sainsburys 1pm 5pm 8pm Tesco 8am 4pm 8pm Co-op 8am 5pm 7pm

6 Supermarket savings cards are a good way to budget for Christmas food and drink. If you save a certain amount on these, most supermarkets will top them up with more money. If you have a supermarket loyalty card, save up the points for a special occasion such a birthday or Christmas. Look for any money off vouchers to save money off your shopping. There are many websites where these are listed one of the best is Use a price comparison website to check which supermarket is cheapest for your food shopping. A particularly good website is

7 TRAVEL If you travel by bus regularly, it is better value for money to buy a weekly or monthly ticket. If travelling long distances, look at going by coach. You can get tickets for as little as 1! When travelling by train, try to travel off peak if at all possible it is cheaper. It can be cheaper to buy 2 single train tickets than one return ticket. Also, if you split the journey into sections this can save a considerable amount of money.

8 WHY HAVE A BANK ACCOUNT? All benefits now have to be paid into a bank account or a post office account. Paying bills can be quicker and cheaper for example if you pay your water bill by direct debit, you can get a discount. For most jobs, you need a bank account for your wages to be paid into. It s safer than keeping or carrying round lots of cash. It s generally free to cash cheques, although you do have to wait a few days before you can access the money. The account may let you go overdrawn a bit and not charge as much as some loans.

9 WHAT PROOF WILL I NEED TO OPEN A BANK ACCOUNT? When opening a bank account, you need to prove who you are and where you live. This is required by law and is needed to help stop money laundering and to prevent fraud. WHO I AM Documents that can be used include: Passport Driving licence Residence permit National Identity Card Letter about what benefit you are getting (Note: you may find that a passport or photo card driving licence may be enough on its own. Alternatively, a government issued document without a photograph, plus a second document showing address or date of birth can be used). WHERE I LIVE Documents that can be used include: Gas bill Electricity bill Water bill Council Tax bill Mail Order statement For students letter from college Letter about benefit you are getting Bank statement Driving licence I.D. - Banks should be realistic if getting paperwork is difficult (for example, they can accept a letter from a doctor or a social worker as I.D.) But you may find that some banks do not do this.

10 DIFFERENT WAYS TO PAY BILLS There are many different ways that bills can be paid, some are better than others. Some of these include: Cash this is accepted anywhere. Cheque you need a bank account for this, and not everywhere still accept cheques. Direct Debit these are regular payments paid from a bank account (this can be monthly, quarterly or yearly). The amount taken out of your bank account can vary. Standing Order these are regular payments paid from a bank account (this can be monthly, quarterly or yearly). The amount taken out of your bank account stays the same unless you change it. Payment cards these help spread out the costs of your bills by enabling you to pay weekly, fortnightly or monthly. You may be able to use these at places which accept Paypoint or Payzone (these are available at places such as local shops and newsagents). Prepayment cards, token and keys (for gas and electricity) this is a method of paying for your energy as you use it. You can top these up at Paypoint and Payzone outlets. Internet you need a bank account to use this method of payment. If you do use the internet, make sure that the site is a secure site, or you could run the risk of exposing yourself to fraud or identity theft.