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money makeover - how to move out of the red and stay in the black

money makeover - how to move out of the red and stay in the black. How would you describe your current financial situation?. ?. Desperate. Manageable. Challenging. Stressful. debt statistics. In the UK today… 362 people will be made bankrupt 125 properties will be repossessed

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money makeover - how to move out of the red and stay in the black

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  1. money makeover -how to move out of the red and stay in the black

  2. How would you describe your current financial situation? ? Desperate Manageable Challenging Stressful

  3. debt statistics In the UK today… • 362 people will be made bankrupt • 125 properties will be repossessed • 2,000 County Court Judgements will be issued • Citizens Advice Bureaux will receive 9,300 new debt problem enquiries • 3,050 people became redundant • The average person saved £2.84 • 25,250 consumer credit application rejected • We will collectively pay £181m interest on our debts

  4. The real cost debt Credit “kills” a Family Man A national debt crisis is generating misery for millions with record numbers of people going 'bust' and rising home repossessions. The Royal Bank of Scotland is set to be investigated by the banking watchdog following the suicide of one of its customers who was heavily in debt "Behind every insolvency there will be a personal tragedy but taken together they add to a growing social problem. Pensioner 'suicidal' after his surgery debt spirals to £180,000 National debt crisis worsens with home repossessions on the increase

  5. If we stay in control • reduce our anxiety levels • reduce stress and related illnesses • avoid family break-ups • give generously • live with financial freedom

  6. how to get out of and stay out of debt 12 StepMoney Makeover

  7. 1. Allocate time • One in three adults (around 12.4 million people) refuse to plan their finances at all, those that do find the time to review them set aside a miserly five minutes a week. (AXA research) • We spend on average of 2 hours, 11 minutes chatting on the phone or texting each week, and 8 hours, 4 minutes watching TV.

  8. step 2: plan set financial goals: • short term (0-12 months) • medium term (1-5 years) • long term (5+ years)

  9. step 3: talk about it With partner With children Agree financial priorities 74% partners find money the hardest subject to talk about

  10. step 4: prepare a budget • accurate picture of how money is spent • informed choices…reducing stress • make money go further • establish priorities • puts us in control • prevent running up debts

  11. priorities high medium low

  12. step 5: think cash try using cash for a month take the Care for the Family ‘cash for a month’ challenge

  13. little things add up Keep a record of your spending • Notebook • Daily Record of Spending • ‘Spendometer’ from www.creditaction.org.uk

  14. did you know that? A cappuccino (£2.30) and a sandwich (£2.40) every day at work costs £99 a month…or £1,188 a year Packed lunches and a thermos flask could save £500 or £600 a year!

  15. step 6: review on a regular basis get financially FIT : Finances (credit card, loans, mortgages) and Food Insurance Telecoms + utilities + other household bills

  16. Step 7: be aware of pressures car home ownership furniture university gadgets wedding social life holidays christmas clothes

  17. pressures availability of credit

  18. encourage plastic surgery

  19. step 8: spend less than you earn • A third of all food is thrown away • 4.8m adults spend more than they earn • 9m adults just break even at the end of every month. • Easier said than done if you are on a low income • Resist the pitch

  20. don’t buy it immediately • Do you really need it? • Sleep on it for 24 hours • Shop with the blues and you’ll be in the red • How many hours will you have to work to pay for it? • If you earn £400 / week then • £40 jumper would take 5 hours • £612 holiday / TV would take 2 weeks

  21. step 9: pay bills on time In last 6 months: • 6.9 million household bills went unpaid • 5m have missed credit card payments. Charge of £12 which equates to £61m • 900,000 people have failed to meet a mortgage payment deadline

  22. step 10: do some research

  23. signpost stewardship moneywww.stewardship.org.uk/money money saving expertwww.moneysavingexpert.com money secret www.moneysecret.info moneybasicswww.moneybasics.co.uk independent financial adviserwww.unbiased.co.uk

  24. step 11: seek assistance if you are in “debt crisis” • face your situation • talk with those closest to you • seek assistance

  25. if you are in “debt crisis” • Local help e.g. council debt/welfare • Citizens’ Advice Bureaux Consumer CreditCounselling Service (CCCS) Helpline 0800 027 4995 (stewardship money dedicated line) www.cccs.co.uk

  26. don’t borrow more money Consolidation loans can be bad for your financial health

  27. step 12: expect the unexpected change in work circumstances unforeseen expenses change in family circumstances overspending

  28. maintain some savings

  29. 12 step money makeover • allocate time • plan • talk to partner/older children • prepare a budget • think cash • review on a regular basis • be aware of the pressures • spend less than you earn • pay bills on time • do some research • seek assistance • expect the unexpected

  30. Money Makeover + Regular Reviews = Staying in Control

  31. any questions?

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