New Year, New You ! My Money Make Over Aileen Hutton & Nichola MacDougall

1. New Year, New You ! My Money Make Over Aileen Hutton & Nichola MacDougall Financial Capability Officer The Charity for your Community

2. Money management education and training from Citizens Advice NI my money aims to empower individuals to budget, borrow and save with confidence!

3. Attitudes to money • Banking • Choosing Credit • Budgeting & Saving • Dealing with debt • Information & Support The Charity for your Community

4. Attitudes to money Research finds that attitudes more than age or income are the main influences on how people manage their money. It is these attitudes combined with big events and life changes that will determine whether people need and indeed seek help with their money and whether they are in good financial shape. (Financial Capability Strategy for Northern Ireland DETI) The Charity for your Community

5. One thing you like spending money on One thing you don’t like spending money on The Charity for your Community

6. Quiz: Why does money matter? • When it comes to saving money:A. I know I ought to be saving, but I never seem to be able to.B. I really enjoy saving. In fact, I spend a lot of time and energy thinking about how to save.C. I have trouble saving money, and l worry about it sometimes.D. I only save for things I really want or need. 2. When I’m feeling down in the dumps:A. Spending money does not cheer me up.B. Thinking of ways to make more money makes me feel better.C. l always spend money to cheer me up.D. Spending just makes me feel worse. Spending has nothing to do with happiness. 3. If I won a million pounds in the lottery, l would be:A. Totally overwhelmed. I would have no idea how to handle it.B. Very happy. I would start thinking about how to invest my winnings.C. Wildly excited. From now on I could buy anything I wanted.D. Feeling a little guilty. I would think about how to use some of my money to help others.

7. So how did you go? • If you answered mostly As – you are an AVOIDER – you put off making money decisions. • If you answered mostly Bs – you are a COLLECTOR – you like to see your money make money. • If you answered mostly Cs – you are a SPENDER – you enjoy spending and think little about how to pay for your purchases. • If you answered mostly Ds – you are a THINKER – you care about others who have less than you, and you often feel guilty about having more than they do.

8. Financial and digital exclusion An individual may have all the necessary skills, knowledge, attitudes and motivation to manage their money but may be restricted from managing their money effectively due to external factors such as access to technology. 1 in 5 people in the UK do not access internet The Charity for your Community

9. Money management Northern Ireland • More likely to have a cash budget. • Better at keeping track (particularly in lower income households) • Less good at planning ahead • Less likely to get insurance • Less likely to be active financial consumers (Financial Capability Strategy for Northern Ireland DETI)

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11. BANKING The Charity for your Community

12. Types of accounts • Basic Bank account • Current account • Saving accounts • Post office Accounts • Credit Union The Charity for your Community

13. In Northern Ireland we have the lowest proportion of households with current accounts compared to rest of the UK. The Charity for your Community

14. Other options Post office account • Allows deposits and cash withdrawal for a range of basic and current accounts. • Can only be used to receive benefit, state pension and tax credits. • A simple account that won’t let you go overdrawn or incur charges. • No credit checks are carried out when opening this account. Credit unions • Are owned and run by members for members. • Members have a common bond such as living or working in a specific area. • Encourage you to save money. • They will let you borrow what you can afford to pay. • Lower interest rates. • A credit union may suit if: You can’t get a bank account Flexibility of saving what you can when you can Local support for managing your money

15. Common Banking problems Choosing an account Bank charges Getting identification Problems with bank charges Remembering PIN numbers Getting access to money Keeping track of money Dealing with direct debits Dealing with call centres Why have a bank account? Financial history Paid wages/benefits Pay bills automatically Keep money safe Online shopping Access to ATM Manage money easier-online or statements Banking The Charity for your Community

16. What are the benefits to Online Banking • Its FREE • View your account online 24 hours a day, 7 days a week. • Check your balance • Pay bills • View statements & Download • View recent transactions • Manage standing orders and Direct Debits • Transfer Money Between Accounts • Some accounts let you set weekly alerts /reminders to your phone

17. Switching banks: why are we more loyal to our bank than to a partner? We stay with our bank for 17 years, but only stay married for 11, which is why we may resist seven-day switching!

18. Why Switch? • Get better rate of interest on your money • Better customer service • Minimise overdraft, bank charges • Added extras like free money or deal on travel insurance. • Cashback on utility bills etc • Ethics – move your money campaign

19. How to switch in 7 days Three -step process is: • Go to new provider/bank - You fill in an application form and a transfer form and provide some proof of identity. 2) The new provider checks which payments you want moved across and sets them all up, while getting your previous account provider to cancel the old ones. 3) Your account will be set up and if you want your balance transferred and old account closed this will be done. Debit and pin number aren’t covered in the 7 day guarantee… can take up to 10 working days

20. Before you switch – Get the right account Do you get rejected when you apply? Most current accounts require a credit check, where the bank assesses whether it wants you as a customer. You may be rejected for one of many reasons. Don't assume because one doesn't want you, none of the others will . Are you always in credit? If you never touch your overdraft, not even by a pound or two, you should grab the account that pays the most interest on your positive balance . Do you go overdrawn? If your balance creeps into the red or stays permanently overdrawn, you need an account that charges you as little for using your overdraft as possible.

21. Do you pay a fee for your bank account? Now, think about whether you’ve ever used those facilities. Are they worth the price? For some they're not, but others save £100s/year. Don't bank where you've got debts If you've got debts with the same provider you bank with, a rule called 'settingoff' means it can take cash without warning to pay down the debts. www.moneysavingexpert.com The Charity for your Community

22. How to deal with problems with your bank • The first thing to do is to talk to the bank, no matter what your problem is – whether you are disputing a payment, complaining about bank charges or simply unhappy with the service. • Every bank has a formal complaints process to deal with problems and complaints. If you use it and still aren’t satisfied, you can take the complaint further with the Financial Ombudsman Service.

23. Remembering Pin Numbers Word method Create new pin number from a word using the number and letter system on your mobile. Word 9673 Date method Use a significant date such as a birthday/anniversary. Better to use someone else's not your own.30th April =3004 Mobile method Add a fictitious friend on your phone and the last 4 digits can be the pin number. George Clooney 07754437856 !!! The Charity for your Community

24. Choosing credit The Charity for your Community

25. Personal loan Store card Credit card Door step lender Payday loan Overdraft Hire Purchase Types of credit The Charity for your Community

26. Choosing Credit Important note Interest rates can vary considerably as there are a number of factors that are taken into account such as; the individual’s credit rating, the size of the loan, current market rates. The Charity for your Community

27. APR /Annual Percentage Rate /Interest • If you borrow money at a 10% interest rate for a year, it will cost you 10% of the amount borrowed to do so. £100 will cost £110 • This needs to be repaid along with the original money you borrowed. • The higher the interest the more you have you pay back.

28. The cost of credit Sandra, Alex, Kyle and Carlos each need to borrow £100. Sandra buys what she needs on her credit card. She pays back £9.50 a month over 1 year. £9.50 x 12 = £114 Alex borrows the money from a doorstep lender and pays back £3.50 a week over 1 year. £3.50 x 52 = £182 Kyle gets a bank overdraft and pays £5 a month over 2 years. £5 X 24 = £120 Carlos gets a loan from the credit union and pays back £9 a month over 1 year. £9X12= £108 • Who pays the most interest? • 2. Why would someone choose the more expensive options? The Charity for your Community

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30. Payday loans are short-term loans designed to tide you over until payday, but they’re an expensive way to borrow. • You should only ever get a payday loan if you’re 100% certain you can repay it on time. • According to Which?, the average payday lender charges £25 interest for every £100 borrowed if you pay it back within 28 days. That’s an APR of 1,737%. • As a comparison, the average credit card would charge you £1.50 at an APR of 18%.

31. If you can’t pay back the loan on time, the fees and interest can soon mount up. • If you extend your loan you will have to pay more interest and possibly other fees. You could be left with an unmanageable debt as the costs can quickly increase. • You may also find it easy to get another payday loan from a different company at the same time. It’s important that you avoid taking out more than one payday loan at a time.  The Charity for your Community

32. Choosing credit tips Find out ……… • How much do you have to pay each month or week? • For how long? • What’s the APR? • What do you have to pay back altogether? • Are there cheaper ways to get the money you need? • If the offer is ‘0% interest for a certain period, how long and what is the interest when its over? • Is the credit agreement clear? Can you take it away to look at before you sign it? • If insurance is included – is it useful, or cheaper elsewhere? • Can you afford the repayments? • What happens if you miss a payment? The Charity for your Community

33. Budgeting & Saving The Charity for your Community

34. BUDGETING • A budget is nothing more that a list of your income and expenditure. • Income is wages, benefits , maternity pay etc • Expenditure – Everything that goes out - Rent/mortgage, Household bills, Travel costs, Christmas!! • Keep a spending diary as its easy to underestimate how much we spend. www.consumercouncil.org.uk • Hold on to receipts, bank statements. • Set a date to tackle your budget with all this information. The Charity for your Community

35. Avoid getting into debt • Successful budgeting creates strong spending and saving habits. • Plan and save for the future • Feel more in control and less stressed about money Why budget? The Charity for your Community

36. Budget tips It is worth re-doing a budget when things change such changing jobs, having a baby etc • Use weekly or monthly amounts – don’t mix them up! • Use a calculator • To convert weekly  monthly: x 52, then,  12 • To convert monthly  weekly: x 12, then,  52 • Make sure amounts are realistic • Keep a record of bills • Make a rough copy first, so you can make mistakes • Don’t forget travel costs, fines • If there are any loan repayments, include these • Include an amount for emergencies and things like Christmas and birthdays The Charity for your Community

37. Budgeting and Saving tipsGood budgeting can help keep you out of debt or allow you to save Switching - See how much you can save • Bank accounts • Gas, Electric, Oil • Phone - home and mobile • Broadband • Digital services • Insurance • Credit, loans Consumer council comparison on providers of essential services in Northern Ireland

38. My Money Making Tips Some different ways for you to maximise your income • Buy one and get one free • Bulk buy • Turn heating down 1° • Downshift shopping • Switch to cheaper fuel supplier • Get discounts for paying bills by direct debit • Make a shopping list and stick to it (Don’t shop when hungry) • Join a library or toy library • Make packed lunch instead of buying • Join school car run and save petrol costs • Benefit Check – see local CAB • De-clutter & sell it – ebay, gumtree, carboot sale • Loyalty reward team - Vouchers/Points – Tesco, Nectar, Boots • Money off coupons • Grants – home/small businesses • Tax rebate for uniform wearers • Check if you're due a tax rebate • Find lost assets • Get paid to click – paid online surveys - The key is while some of these sites pay small amounts, add them all together and it can turn into an annual bonanza of £1,000s. The Charity for your Community

39. Martin’s Money Mantras www.moneysavingexpert.com

40. Weekly savings SAVE A BUNCH PACK A LUNCH Homemade lunch rather than bought? £5x5 days =£25 per wk x 52 wks per year Potential saving £1300 Going for Coffee ? £2 x 5days x 52 wks = £520 per year on coffee (not including a scone!) Quit smoking ! £6 x 7days x 52 wks = £2184 Saving weekly rather than monthly £20 x 12=£240 £5x52 = £260

41. Having a budget can help you manage your money, avoid getting into debt, plan and save for the future and feel more in control and therefore less stressed about money. • It can be extremely difficult to save if you’re living on benefits or a very low income but even a very small amount of savings can make a difference – £1 a week is £52 by Christmas! • It is important to know that SAVINGis a part of budgeting and can help stop you getting into debt by putting money aside for things you know are coming up bills, Christmas or other festivals or for emergencies.

42. Start teaching your children about saving and budgeting from an early age, make it a HABIT! • If you’re an impulse buyer give yourself a cooling off period, you may find you aren’t as keen 24hrs later. • Set alarms or dates in your diary 6 weeks before your 0% credit card deal or insurance is up to shop around.

44. Dealing with debt The Charity for your Community The Charity for your Community

45. Credit is debt under control. Debt is credit out of control.”

46. Causes of Debt Debt is often associated with unexpected changes in life.It could be the loss of income or arrival of one or more billor both • High spending on consumer goods and entertainment • Losing a job/unable to get a new job • Leaving home • Being ill • Becoming disabled • Moving into new home • A bereavement • Problems with benefits such as delays, overpayments • Low levels of benefits, training allowances and wages • Having a baby • Drug or alcohol dependency • Remaining in education • Problem gambling • A relationship ending The Charity for your Community

47. PRIORITY DEBT A priority debt is one where, if it is not repaid, could lead to: Eviction Prison Disconnection OR The client needs the debt to be treated as a priority The Charity for your Community

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49. Other bills and debts (non priority debts) The Charity for your Community

50. There are many different reasons why we get into debt. Knowing what can happen when certain bills and debts are not paid can help us to prioritise the most important ones and avoid the most serious consequences. The Charity for your Community