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How to cope with the credit crunch
More Money Tips
By far, the most important change I am going to suggest you make to help you beat the credit crunch is to adopt the "envelope system". Each week I withdraw my spending money for the week and divide it into 6 envelopes:
Envelope 1 - Bills - £30
Envelope 2 - Adults x 2- £60
Envelope 3 - Kids - £30
Envelope 4 - House - £20
Envelope 5 - Food - £70
Envelope 6 - Fuel - £30
Of course, your envelope names and the amounts you put into them is specific to you and your circumstances however the golden rule is that everything you buy MUST come out of the relevant envelopes and that is all you can spend. No cheques, credit/debit cards or trips to the cashpoint. If you dont spend it all then it stays in the envelope and accumulates to be available for a larger purchase.
More Debt Tips
Personal Debt - If you cannot afford to buy it then DONT have it! Plan your finances and budget carefully so that whatever you are buying is a "one off" purchase that you enjoy and not a long term monthly purchase that you regret. If you are struggling with debt then contact the National Debtline . They are there to help you.
More Mortgage Tips
Mortgage - Shop around for the best mortgage deals. Try to secure a fixed rate that you know you can afford now and in the future. To compare different mortgage products, visit a comparison website like Money Supermarket.com . To compare, Click Here .
More Car Tips
Cars - Start car sharing. Reduce your fuel and running costs and do your bit for the environment. With a bit of planning I am sure that you could car share with one of your work colleagues at least twice a week. Visit liftshare.com to find other people that do similar journeys to you. Liftshare currently has over 300,000 people registered.
More Household Tips
Household - Use well known websites like mySupermarket.co.uk to find the best deals available. Take full advantage of the Buy One Get One Free offers to stock up on products you will buy every week. You can save upto 30%. Click Here for more details.
More Clothes Tips
Clothes - If you currently buy your clothes from the likes of Next and M&S then start looking at what you can get in Matalan, Primark or one of the main Supermarkets. Fantastic bargains on everyday items and childrens clothes. To see the current clothing offers from Tesco please Click Here .
More Holiday Tips
Holiday - Try going to somewhere like Bulgaria, the weather is as good as Northern Spain, the accommodation is often better and the food and drink is a fraction of the price. You will still get a pint of beer for 40p - 50p. Click Here for more information.
More Going Out Tips
Going Out -Take advantage of the many deals that are being offered by the main pub/restaurant chains where they offer 2 meals for the price of 1, Kids eat free and earlybird discounts. These deals are normally well advertised. Alternatively, visit the voucher pages on Money Supermarket.com to view national restaurant offers. Click Here to go there now.
More Staying In Tips
Staying In - Cook for your friends or neighbours on a rota basis. It will not cost you much more and the following week they will return the favour. Keep it very simple and dont cook too much. You are not entertaining, simply sharing the cost. Click Here for food bargains ideal for home entertaining.
More KidsTips
Kids - Talk to your children about the credit crunch and how it affects the family. Start to have discussions about how much things cost and manage their expectations about what is affordable. Kids are not stupid and will understand more than you give them credit for.
Money
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Of course, just about all of us could do with a little more money during the credit crunch. Reality is, we probably wont get anymore without taking a second job as everyone, including the businesses we work for are feeling the bite of the credit crunch.
What we can all do though is be a little smarter on how we keep, manage and spend our hard earned cash.
1. By far, the most important change I am going to suggest you make to help you beat the credit crunch is to adopt the "envelope system". Each week I withdraw my spending money for the week and divide it into 6 envelopes:
2. Consider changing your banks. As a result of the credit crunch most banks will now do all the hard work for you because they want your business. The more deposits they can now get the more stable their position is in this economic climate.
Click Here to contact your bank.
Click Here to compare Current Accounts.
3. Have a look at some of the current account options your existing bank offers. For a small monthly fee you can often find accounts that will give you extras such as, free overseas transactions, breakdown insurance, travel insurance and an agreed overdraft limit so those small trips into the red dont cost you a fortune. These are all things you are potentially paying extra for each year which you could have included as part of your current account.
4. Exchange your old mobile phone for cash. Tesco now operate one of the better mobile phone recycling schemes. Click Here to see how much your old mobile phone is worth.
5. Change your mobile phone supplier. Click Here to compare providers. I recently got a phone from the Tesco Phone Shop that was 50p cheaper per month than another provider but gave me an extra 600 minutes per month of call time.
6. Review your monthly "social" commitments. Do you really need the gym membership, season ticket or sky sports. Are you getting maximum value from them or is there a way to combine some costs. As an example, could you go to the gym to watch the match?
7. KICK the habit! You dont need me to tell you how much you could save by giving up smoking, drinking or the daily cappucinos. Why not use the credit crunch as a reason to give up? If you are in any doubt about how much your habits are costing you per week then write it down on a daily basis. Combine this with the envelope system and you will start to save money.
8. Cash in those old CD,s, Games and DVD's. Visit Music Magpie to see how much your old media is worth. Click Here for more information.
Personal Debt
If you find yourself with any personal debt, Im afraid the credit crunch is not going to make things any easier for you unless you face up to it and do something about it.
You need to get yourself back in control of your finances. It may mean simply going without if you cannot afford it, or maybe looking to completely refinance your debt.
1. If you cannot afford to buy it then DONT have it! Plan your finances and budget carefully so that whatever you are buying is a "one off" purchase that you enjoy and not a long term monthly purchase that you regret.
2. Consolidate any personal debt you have into one loan that you can track and manage. To compare loans Click Here
3. If you have to make an emergency purchase that you may want to pay for over a few months consider using a credit card that offers interest free terms on purchases. Make sure that this is controlled and paid off within the term so as to avoid high interest charges. To compare credit cards Click Here
4. Consider switching your loan mid term to one that offers a lower rate of interest. Be aware that this may incur early repayment charges that are greater than the amount you could save by switching. To compare loans Click Here
5. If you have a mortgage with a draw down facillity then use this instead of a loan to consolidate your debt. This is probably the cheapest money you will ever borrow. Make sure you can afford the extra payments and make them monthly to pay of the draw down as though you are repaying a loan. To compare mortgages Click Here
6. Make sure you have sufficient income protection insurance to enable you to continue to make any debt repayments if you become unable through accident, sickness or redundancy. To compare payment protection insurance Click Here
7. If you have already borrowed money on your credit card, you must ensure you pay at least the interest off this card each month to avoid paying interest on the interest. The minimum payment requested by the credit card provider may not always cover the interest accrued. To compare credit cards Click Here
National Debtline is a national telephone helpline for people with debt problems in England, Wales and Scotland. Their service is free, confidential and independent. To go to their website then visit:
www.nationaldebtline.co.uk
or telephone them on 0808 808 4000
Opening times are:
Monday - Friday 9am-9pm &
Saturday 9.30am - 1pm
Mortgage
It is often said that a mortgage is the biggest financial commitment that most of us will undertake. More than ever, during the credit crunch it is important to be on the right mortgage at the right time. Depending on the current bank base rate, it is also one of the best times to overpay and reduce the amount you owe and the term of your mortgage.
1. Shop around for the best mortgage deals. Try to secure a fixed rate that you know you can afford now and in the future. To compare mortgages Click Here
2. If possible, make overpayments to help reduce the capital and save interest long term. Not many people are in the position during the credit crunch where they can afford to do this with their basic wage so use any money from bonuses or overtime to give you a long term saving rather than wasting it in the short term.
3. Consider switching mortgage providers mid term. Be careful of any early repayment charges. Some lenders are now offering a 6% cashback if you switch to them which you could use to help clear an outstanding loan. look at the figures carefully to make sure that you are not paying for this cashback for the rest of your mortgage.
To compare mortgages Click Here
4. If you are really struggling to meet your mortgage payments then consider taking in a lodger. The Government's Rent-a-Room scheme means you can receive up to £4,250 a year from a tenant tax-free. Click Here for further information.
5. Only take out an interest only mortgage as a last option. The payments may be lower now but eventually you have to pay off the capital. To comare mortgages Click Here
6. Always talk to your lender if you are in financial difficulties. They may allow you a payment holiday or extend the term to allow lower monthly payments. To contact your bank Click Here
Cars
There are now over 31 million cars in the UK, roads are crowded and fuel prices are rising. It must be time to consider car sharing or different, more efficient modes of transport. Very few people make money out of cars, they are a huge expense, even more so if you dont find the most cost efficient way to finance them. The credit crunch is a fantastic opportunity to ditch the car and save some money.
1. Cars - Start car sharing. Reduce your fuel and running costs and do your bit for the environment. With a bit of planning I am sure that you could car share with one of your work colleagues at least twice a week. Visit liftshare.com to find other people that do similar journeys to you. Liftshare currently has over 300,000 people registered.
2. Catch a train, bus, ride your bike or walk. Take a look at Halfords for the latest offers on bikes. For the longer journeys have a look at National Express for buses and the trainline for discounted train fares.
3. Think about your journey, driving in lower gears, accelerating smoothly, checking that the tyre pressures are correct and removing unnecessary weight from the boot have all shown to improve fuel economy.
4. Buy your grocery shopping from the supermarket that is offering money off fuel vouchers. For the best supermarket deals Click Here
5. Be aware of the 0% finance deals when purchasing a car. Although this seems a good deal initially you are probably going to have a lump sum to pay at the end of the agreement that is alot more than what the car will be worth. To compare loans Click Here
6. If you are purchasing a used car then make sure that you check to confirm that there is not any outstanding credit on it. More people are now defaulting on their payments and selling the car. Get a full vehicle history check from autocheck.co.uk
7. Shop around for your car insurance every year. Click Here to find the best deals.
8. Latest industry news suggests that an increasing number of owners are driving illegally with defective tyres being the major concern. Experts say that due to the increased time required between services on newer cars then the items that may suffer from wear and tear such as tyres are not being checked regularly. Check yours now! If you are not sure what you are looking for then book your car in for a service at somewhere like Halfords
Household
Running a home is particularly difficult at the best of times, let alone in a credit crunch. Some simple changes to the way you shop can make a big difference.
1. Visit mySupermarket.co.uk to find the best deals available during the credit crunch. Take full advantage of the Buy One Get One Free offers to stock up on products you will buy every week. This site is amazing and it always saves us money.
2. Consider signing up to Skype .You will get free phonecalls via your PC to other Skype users anywhere in the world. Call standard mobiles or landlines from your PC and get substantially reduced call tarrifs. Download skype for free here .
3. Sign up for the loyalty cards with the major supermarkets. Join all the clubs that you are eligible for and you will be sent vouchers for money off or points. If there is more than 1 adult in the house then get them to sign up aswell then they will also be sent the offers. Alternate between the major supermarkets as if they believe that you have started shopping elsewhere they will send you more vouchers to encourage you to return. Visit mySupermarket.co.uk to find the best current deals.
4. Try to shop online. You can see exactly what you are going to spend and reduce your order if over budget. Most of the point and money off vouchers are valid for online shopping. You will not be tempted to make impulse purchases based on your mood or appetite at the time therefore making a saving on your waistline aswell as your wallett. Visit mySupermarket.co.uk to find the best current deals.
5. Food....If you are only going to throw it away at the end of the week then dont bother buying it in the first place. Think about which family members are going to be home for meals each day, regularly review what is in your fridge and cupboards and delete it from your shopping list if you already have enough.
6. Buy own brand or value products. We often buy Tesco value products and really cannot notice the difference. Click Here to view Tesco offers. Alternatively visit mySupermarket.co.uk to view the best offers from the major supermarkets.
7. Buy your ink cartridges online from somewhere like Inkfactory.com . Branded and compatible products are available at fantastic prices.
Clothes
Everyone needs clothes and everyone needs to buy them from somewhere. During the credit crunch you may just have to reconsider where you buy them from. The supermarkets now do fantastic ranges with the quality to match. The only person that knows you bought your latest jacket from Asda is you....too everyone else, it looks great.
1. If you currently buy your clothes from the likes of Next and M&S then start looking at what you can get in Matalan, Primark or one of the main Supermarkets. Fantastic bargains on everyday items and childrens clothes. Click here to see the latest range from Tesco .
2. Dont ever buy something that doesnt quite fit. Chances are it never will or you will not feel comfortable wearing it.
3. Kids dont need many clothes once they are at school as they are always in their school uniform and they grow so quickly that they hardly get chance to wear them. For great value school wear then take a look at BHS or Matalan aswell as the main suermarkets. Look at Tesco clothes here .
4. Replica football kits are fantastic value for boys. They dry really quickly, dont need ironing and of course they love wearing them. Pick them up cheaply at Matalan or Sports Direct .
Holiday
We all look forward to holidays, a chance to getaway from it all and enjoy time with family or friends. The credit crunch inevitably means that money is tight but that does not mean you have to sacrifice your holidays. Just give consideration to where you are going, how you are getting there and what you are going to spend when you get there.
1. Try going to somewhere like Bulgaria, the weather is as good as Northern Spain, the accommodation is often better and the food and drink is a fraction of the price. You will still get a pint of beer for 40p - 50p. Click Here for more information.
2. Set yourself a budget for your spending money and stick to it. Consider taking travellers cheques or using a debit card that only has a limited amount available to use. Consider someting like the BREAD prepaid mastercard. Guarantee yourself no nasty surprises when you return home. For more details Click Here
3. Only use credit cards for emergencies. if you have to use one then make sure you know what the charges will be. Nationwide does not currently charge commission on overseas purchases made with its credit card. To compare other credit cards Click Here
4. When looking for your foreign currency be prepared to shop around and haggle for a better deal. Do not leave it until the airport, you will get a terrible rate. Consider a company like Travelex for orders online or Airport collection.
5. Pre-book your airport parking and consider parking off site and catching a shuttle bus to the airport. You literally could cut the cost in half. Alternatively use public transport, there are often fantastic deals particularly for Gatwick and Heathrow. For pre bookable airport parking then consider UK Park & Ride - Airport Parking , The Airport Parking Company and Purple Parking .
6. Get a european health insurance card. ( www.dh.gov.uk/travellers )This entitles you to reduced cost treatment in healthcare systems across the EU. it is not a replacement for travel insurance but could save you money by avoiding having to pay the excess on a medical claim.
7. If you are likely to travel abroad more than once a year then consider purchasing an annual travel insurance that will allow multipe trips. You can get travel insurance from so many places these days, consider some of the more unusual ones for competitive prices, Post Office , John Lewis , AA , SAGA
8. Take a picnic for the journey to and for the wait at the airport. Airport restaurants are very expensive and very mediocre.
9. if you are using a "no frills" airline then pre book any hold baggage you may be taking as items booked at check in often triggers a supplement. The best way is just take less, you probably will only wear half of what you take anyway.
The number one "no frills" airline is Easyjet . To take a look at their offers Click Here
10. Dont forget that you are charged to receive calls to your mobile phone when abroad however this is normally much cheaper than making the call. Check with your operator to see what packages they offer for when you are overseas. Consider purchasing an international phonecard.
Going Out
1. Take advantage of the many deals that are being offered by the main pub/restaurant chains where they offer 2 meals for the price of 1, Kids eat free and earlybird discounts.
2. Collect Tesco Clubcard points. They offer fantastic savings on entry to many attractions and theme parks throughout the UK. As an example, £27.50 worth of clubcard vouchers will give you 12 months Unlimited entry to the UK's top attractions: Alton Towers Resort, LEGOLAND® Windsor, THORPE PARK, Chessington World of Adventures & Zoo, Madame Tussauds, London Eye, Warwick Castle, SEA LIFE and the Dungeons. This is fantastic value. Take a look at all the clubcard deals by clicking Here.
3. Look out for free attractions in your area. As a guide, the following national attractions currently offer free admission.
1. Blackpool Pleasure Beach
2. Albert Dock
3. National Gallery
4. British Museum
5. Tate Modern
6. Natural History Museum
7. Xscape Castleford
8. Science Museum
9. Victoria & Albert Museum
10. Eastbourne Pier
11. National Portrait Gallery
12. Somerset House
13. Willen Lake and Park
14. Oswaldtwistle Mills
15. Royal Observatory
16. National Railway Museum
17. Imperial War Museum
18. The Lowry
19. National Museum of Photography, Film & Television
20. Blakemere Craft Centre
Staying In
1. Cook for your friends or neighbours on a rota basis. It will not cost you much more and the following week they will return the favour. Keep it very simple and dont cook too much. You are not entertaining, simply sharing the cost.
2. Listen to music. I use a site called Legal Sounds where you can download individual songs for about 5p and whole albums for about 50p. As far as I can tell, this site is totally legal. I think it is fantastic and have saved an awful lot of money by using it. Click on the following link to give it a try -
3. Take advantage of some of the fantastic meal deals that are being offered by the main supermarkets and fast food outlets. Visit mySupermarket.co.uk to find the best current deals.
Kids
1. Talk to your children about the credit crunch and how it affects the family. Start to have discussions about how much things cost and manage their expectations about what is affordable.
2. At school they are constantly having discussions about how to save energy and look after the environment by turning off television, lights and games consoles when not in use. Set them the same challenge at home by trying to make a game of it.
3. Give them pocket money for achieving simple tasks like keeping their bedroom tidy or putting out the bins on a weekly basis. Encourage them to save this money towards something they really want.
4. Have a look at the local councils website to see what activities and attractions are being organised in your local area during school holidays. Visit DirectGov for more information.
Energy
1. have you ever counted how many light bulbs you have in your house. Switch off lights when you dont need them, consider using a table lamp instead of a main light. Buy energy saving light bulbs!
2. Take showers instead of baths.
3. Put your boiler onto a timed programme so that you are not heating the house or water when you are at work.
4. Switch off any unnecessary appliances. Check now to see if your TV, PC, washing wachine, dishwasher or games console are left on standby.
5. Consider changing your energy supplier. This is really simple as they do everything for you. Take a look at Moneysupermarket Utilities to see how much you could save.
6. Either fill your freezer up or switch it off. An empty freezer is having to work very hard just to chill air and uses an awful lot of energy to do so. If your freezer is full then the frozen food assists with the chilling making it operate more efficiently.
7. Dont overfill the kettle. Only boil the amount of water you require at the time.
8. Turn the thermostat down on your boiler by at least 1°C. This has been shown to reduce an average heating bill by 10%.
9. Modern detergents now mean that you can do most of your washing at 30° C. Also use the economy wash option if you have one on your machine and see what you can save.
10. Use a water butt to collect rainwater from a downpipe to water your garden with.
Insurance
1. Be prepared to switch your insurance provider every year. They are always keen to offer you a good deal to join them but rarely continue that rate in the following year. Take a look at Gocompare.com Home Insurance to see how much you could save.
Credit Report
What’s in a credit report?
Credit references agencies -– the largest in the UK is Experian - collate information about your financial background and past behaviour and format this data into your unique credit report.
You can check your credit report online now for free with CreditExpert, the credit monitoring service from Experian. To find out more Click Here
Lenders see this information when they decide whether or not to offer you a loan, mortgage or credit card. It influences their assessment of the likelihood that you will repay them.
Information comes from two main sources:
It’s important that all this information is as up to date as possible and correctly reflects your circumstances. Then lenders will make the best-informed decisions – and you will get the right deal.
The easy way to check your credit report is to log onto CreditExpert, the credit monitoring and identity protection service from Experian. Click Here for a free, 30-day trial, which will allow you to see your credit report as often as you like.
Legal Advice
Citizens Advice Bureau provide free, confidential and independent advice from over 3,200 locations around the country.
Advice is available face-to-face and by telephone. Most bureau offer home visits and some also provide email advice.
Advice from the CAB helps people resolve their debt, benefits, housing, legal, discrimination, employment, immigration, consumer and other problems and is available to everyone regardless of race, gender, sexuality, age, nationality, disability or religion.
Published by Citizens Advice, this website ( www.adviceguide.org.uk ) aims to provide up-to-date, independent advice, around the clock. It:
Gives you contact information about your nearest CAB Office, puts practical reliable up-to-date information at your fingertips, covers a wide range of topics, is continuously reviewed by a team of advisers, points to reliable sources of advice when you need more than information, covers England, Northern Ireland, Scotland and Wales and provides information in English, Welsh, Bengali, Punjabi, Gujarati, Urdu and Chinese
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Clothes - If you currently buy your clothes from the likes of Next and M&S then start looking at what you can get in Matalan, Primark or one of the main Supermarkets. Fantastic bargains on everyday items and childrens clothes.
