Archive for 2013
Nowadays we lead such busy lives it is easy to see why so many of us turn to convenience food and drink.
It seems so much easier to grab a take-away coffee on the way to work or pop out and buy a sandwich at lunch time than prepare a packed lunch – but beware convenience can be costly.
According to the Office of National Statistics (ONS), millions of workers are paid less than they were a decade ago. Their analysis shows that since 2009 any pay rise given to the average worker has been consistently below the rate of inflation.
So we all need to think twice about any hidden costs in our daily life.
In terms of convenience food, even the cheapest takeaway coffee and lunchtime sandwich can still cost around £3 a day. That adds up to £15 in a working week or £60 a month.
By foregoing that daily designer coffee and packing your own lunch you can improve your health and your wealth.
From a nutritional point of view, preparing your own food means you can choose healthy, low cost options. There are lots of ideas online and in the supermarkets for affordable and tasty meals which you can try out (including sites like Family MoneyBox). If you can buy products on offer, or in bulk, then the price drops even further.
Another point worth considering in the fight to cut spending is the use of coupons and supermarket offers.*
Other hidden costs you might want to think about include gym membership and any other annual subscriptions that you have not reviewed for a while. As an example, a monthly gym membership of £40 actually adds up to £480 a year. This may be a reasonable price to pay if you attend regularly, but if not then it is money that could be better spent.
These types of savings soon mount up and can be used for a special treat – or to pay off debts.
Have you managed to save money by cutting back on similar hidden costs? If so we would love to hear from you, especially if you have used the money to do something special.
* Read Payplan’s investigation of the ‘couponing’ trend here.
Leading psychologist, Mandy Rutter, is using Mental Health Awareness Week (13-19 May) to highlight the links between debt and mental health and urge anyone affected by debt to seek help.
Here she talks about the effects that unresolved debt problems can have on a person’s mental health: “When a person is in debt they can feel like a failure and become ashamed of the situation. These feelings mean there is a tendency for them to bury their head in the sand and pretend the problem does not exist. The consequences can be that financially it gets worse and psychologically it gets worse.
“The constant worry of the debt growing, the fear of what will happen in the future and personal burden of carrying this stress alone all leads to worsening mental health. Depression, anxiety, obesity and self-harm have all been shown to be more common in people who have problem debt. If you already suffer from these debilitating conditions it won’t take much to tip you over the edge and cause serious psychological concern.”
According to the Royal College of Psychiatrists one in four people has a mental health problem and a quarter of those people are in debt.
Mandy is working with Payplan because she feels that people in debt often do not know where to turn for help and advice. As a psychologist for the employee assistance and psychological rehabilitation company, Validium, she refers clients with debt problems to Payplan and knows the value of the help that can be provided.
She said: There are many people suffering in silence with debt and by not taking action it has a negative effect on their mental and physical health. I would urge anyone who is struggling with debt to take action and speak to Payplan.”
2 May 2013
Latest statistics out today show that around half of 2.6million homeowners who have an interest only mortgage, may not be able to pay the capital when the mortgage ends. 48% (some 1.2m customers) of them will be faced with a shortfall – the average in excess of £70,000.
The Financial Conduct Authority (formally the FSA) have issued a warning that customers with interest only mortgages will need to have sufficient savings in place or are advised to switch mortgages before facing a significant shortfall.
The FCA has advised mortgage lenders to contact those who will be affected to discuss options and alternatives.
If you are affected by this news and are unsure of how to proceed with an interest only mortgage (IOM), here are a few things to consider:
• Assess your current position. Can you afford the capital repayment upon completion of the interest only mortgage? With an IOM you will need to pay the full amount you borrowed after paying the interest.
• Start saving. The quicker you start to build savings the more you will have at the end of your mortgage term.
• Can you re-mortgage? Shop around and make enquiries with your current provider.
Switching rates if you can afford it may be a prudent choice.
If you are struggling with debt then Payplan can help you to assess your financial situation and deal with any debt problems.
Michael tells us about his job as Helpline Adviser and why he is proud to work for Payplan:
“Every weekday morning I wake up knowing I will be putting smiles on people’s faces. That’s because I work in Payplan’s Helpline department – set up especially for first time callers. My colleagues and I are the first point of contact for people who have found themselves in financial difficulty and are struggling with unsecured debts.
“There are many reasons why someone picks up the phone to make enquiries, they may have unexpected or increased expenditure or be struggling with a change in circumstances.
“Regardless of the reasons for the call we are always here to help. Taking a non-judgemental and empathetic approach is essential in my job; everybody has their own story as to why they are struggling with their finances and it is down to me to make each and every caller feel as comfortable as possible.
Being there for clients
“A recent survey published by the Citizens Advice Bureau found that nearly 3 in 4 (74%) people with debt worries said their mental health was impacted. So it’s no surprise that most people who call Payplan are full of apprehension when making that initial contact with us.
“A few common words and phrases I often hear used when people are describing how they feel include “scared”, “isolated”, “confused”, “anxious”’, “overwhelmed” and “no-one else to turn to”. So I make it a priority when speaking to somebody to try and understand and address those feelings.
“When somebody is feeling vulnerable just having another person to talk to who understands the situation can really help to ease the pressure and start to address the underlying issue.
“Unsecured debts are categorised as ‘non-priority’ outgoings (credit cards, loans, store cards etc.), as opposed to ‘priority’ outgoings, such as food, rent/mortgage, utilities and council tax. When people start to get behind with their ‘priority’ expenditure they often say they have buried their head in the sand. I also hear from clients who have continued to pay ‘non-priority’ outgoings for fear their credit rating being affected but failed to pay ‘priority’ outgoings.
“Defaulting on certain essential payments, such as council tax, can result in bailiff action, which is never a pleasant experience. Helpline advisers are fully trained and know exactly how to react to any threats of bailiff action. That is why it is important to seek expert help as quickly as possible.
Impact of the recession…
“Five years ago many people would never have thought they would be struggling with their finances or be in debt. Unfortunately, due to the current financial climate and the double dip recession, things have happened that most of us just weren’t prepared for. As a result, more and more people are turning to Payplan for help.
“Helpline is open over 70 hours a week. This ensures that our service is as accessible as possible.
“It can take a lot of courage to pick up the telephone and call Payplan, which is something I recognise and offer as much support as I can.
A smile is contagious!
“There is a saying that a smile is one of the most contagious gestures a person can make. Towards the end of the calls from new clients I can often hear a change in their tone of voice. It is like a subconscious sigh of relief and a smile – and that puts a smile on my face too!”