Every penny helps!

Sunday 26th October, 2008 - £7,499.83 in debt…

It looks like I’ve started a trend - suddenly everyone wants to pay off their debts! It could be something to do with this recession we’re teetering on the edge of, but I think my influence should be taken into account as well. Increasing your monthly credit card payments is the new cool thing to do, and Primark is the new Armani.

According to the BBC, the number of people consulting Citizens Advice about their debts has risen by a third in the past year. Given that this means more people are searching for debt advice on the internet and finding this blog (bad luck, chaps), I thought I’d give you a quick run-down of the best sources of debt advice I’ve found so far in my quest for debt freedom.

     1.  Martin Lewis’s site, www.moneysavingexpert.com, is a very fine resource once you get your head around the somewhat busy homepage (and the fact that it’s two consonants away from ‘monkey shaving expert’). Martin himself might come across as an android with no spending urges whatsoever, but the forums (especially Debt-Free Wannabe and Up Your Income) are well worth checking out for advice from fellow humans. Receiving the weekly email updates is like having a relentless snapping terrier at your heels.

     2.  The Citizens Advice homepage is at www.adviceguide.org and offers simple, step-by-step guides to paying back your debts, negotiating with your creditors, dealing with mortgage arrears and so on. It doesn’t preach, but nor does it offer alternatives to the accepted methods, or advice on coping with the emotional side of things.

     3.  One site that does look into the psychology of debt is the very one you’re reading now. As well as my own blog, which was described as “helpful” by one reader and “very good” by another (high praise indeed), Consumer Choices also has a debt centre, featuring news, articles and consumer guides.

     4.  The National Debtline offers free, confidential advice on its website (www.nationaldebtline.co.uk) or on the phone (0808 808 4000, which is a freephone number). There’s a range of factsheets on the website, but National Debtline specialises in giving personal advice via email or phone. You can email an advisor by clicking here.

     5.  If your money problems could be solved by sorting out a dispute between you and a financial service provider (your bank, insurance company or PayPal, for instance) contact the Financial Ombudsman Service at www.financial-ombudsman.org.uk for advice. If you need to write a letter of complaint, use the FSA website (www.fsa.gov.uk) to find the regulations your service provider should be obeying and quote them.

     6.  If you’re paying off debts you’ll need to save money on some essentials: www.petrolprices.com will tell you which petrol stations in your area are offering the cheapest prices per litre. It’s not something I check every day, but you can sign up for weekly email updates. Use www.mysupermarket.co.uk to compare grocery prices before you do the food shopping. I saved about 13% of my food budget by doing this.

     7.  For some genuinely useful practical help, visit www.whatsthecost.com and calculate the real cost of your debts including interest. The amazing snowball calculator will also tell you which order to pay your debts in, how much interest you can save by doing it the right way, and how much to pay per month if you want to be debt-free by a particular date. I had no idea about this site until a few months ago, but it’s now one of my favourites.

     8.  The Consumer Credit Counselling Service is another charity that gives free and confidential advice. As well as offering a free helpline (on 0800 138 1111), the website (www.CCCS.co.uk) features a Debt Remedy service, which starts with a comprehensive 20-minute questionnaire (to establish the kind of mess you’re in) and ends with the CCCS sending you a Debt Remedy booklet. This includes your budget, a summary of your debts, and advice about paying it off. Beware though: If you’re self-employed the Debt Remedy service won’t apply to you, and you can’t ask the charity for help if you’re not a UK citizen.

If you’re in lots of debt and stuck for an answer, the best advice I can give you is two-fold: (a) talk to someone, and (b) make sure you’re talking to the right someone. Doing a Google search on ‘debt help’ is likely to throw up a lot of unscrupulous companies that are trying to offer you an expensive consolidation loan or IVA. These are often the wrong solutions to the problem: what you need is support and practical, impartial advice. Good luck.

  Iceland faces a meltdown

With the global credit crunch now battering down the doors of banks around the globe, I’m sure the people of Iceland, all 320,000 of them, are wondering what on earth will happen next.

In last 48 hours the country’s banking system has been teetering on the brink of collapse, leaving many British customers with money invested in the country’s biggest banks worried about their savings.

Monday saw Iceland’s largest bank Kaupthing Edge in crisis talks with the government, over fears the economy was about to nosedive.

Yesterday, Iceland announced emergency legislation and plans to help the financial situation. But by the afternoon, the country’s second biggest bank, Landsbanki, was facing a mammoth-sized meltdown, about to be declared insolvent.

British customers who have savings with Icesave were then told they will have to claim compensation from the Icelandic government and the FSCS to get their money back.

Since this, prime minister, Gordon Brown, has promised legal action against the Icelandic government to get the money back, and Chancellor Darling said this afternoon that he will guarantee all UK savers’ money in Icesave.

So, what should be done? Well firstly, if you’re an Icesave customer you may want to read my Q&A article, which will hopefully answer all your questions about the Icelandic banking crisis.

Secondly, if you’re worried about any savings you may have, be that an ISA with Abbey or a HiSave account with ICICI, now is the time to consider spreading them around.

It is not a good idea to have all your savings with one institution, especially if the amount exceeds the £50,000 guaranteed compensation from the FSA. It’s all very good taking advantage of the high interest rates that are on offer; just make sure you play the game wisely.

It’s yet to be seen what will happen with Icesave, but as its parent bank Landsbanki faces liquidation, it’s certain that whatever move is made, the Icelandic economy will need serious reparation after this week.

And what a week it has been. Oh wait, it’s only Wednesday!

  Asta la vista Endsleigh!

After reading Olivia Buck’s blog entry about Endsleigh mis-selling her Payment Protection Insurance, and hearing that Churchill Insurance have had their knuckles rapped by the Advertising Standards Authority (ASA) for misleading claims, I wonder how many other insurance companies are out to trick us into paying for services we don’t need, tempt us with enticing offers that don’t exist, or plain and simply, how many just don’t do what it says on their tins?

Churchill Insurance is the latest culprit to join a long list, with one of their ads actually being banned by the ASA after a customer complained that it was misleading.

The ad, which stars the infamous talking dog, asks game show contestants to challenge Churchill on his insurance claims, with one man asking “is it possible to make a claim without filling in any forms?”

“Ooooohhhhh yesssss,” came Churchill’s response. That notoriously annoying catchphrase mimicked by many a middle-aged man thinking he’s even slightly funny…

However, one viewer really did challenge Churchill, pointing out that the ad was misleading because a form was sent out after he’d made an insurance claim.

Defending itself, Churchill Insurance said it does try to sort claims over the telephone “wherever possible,” but added that a fifth of cases required a declaration form or statement to be completed by the claimant.

So, is it possible to make a claim without filling in any forms? “Ooooohhhhh nnoooooo” doesn’t quite have the same ring.

The company apologised and said the claim was used “in error” and that it wouldn’t be repeated in future TV ads.

This isn’t the first time Churchill’s dog has made headlines though. Earlier in the summer the company were criticised, when it was reported that their canine front-dog said a rather offensive swear word immediately after his catchphrase. Of course, a Churchill spokesman denied the swearing.

Churchill isn’t the only bad egg in a battery farm of insurance companies though. Staff at Carphone Warehouse were caught by undercover researchers from BBC One’s Watchdog last autumn, after misleading customers about insurance for the Apple iPhone. The BBC researchers found Carphone staff made false claims about what would happen if a phone was stolen and hadn’t been insured.  According to the BBC, these false claims were made in the hope that “customers would take out the store’s own insurance”.

And back in January last year, a number of firms were slammed by the Financial Services Authority (FSA) for misleading customers, and told that they must stop using savings claims in their advertising that could be deemed misleading.

So are any other insurance companies misleading us? Is anyone safe? Have you fallen foul to a deceptive advertising claim or discovered that your insurance policy wasn’t all you thought it was? Have your say in our forum.

And the moral of the story: Don’t believe everything your told. Especially if it comes from the mouth of a talking dog…

 Housework? Cool. 

Tuesday 10th June, 2008 - £8,920.19 in debt…

First things first: I’m not temping this week. After an extended goose chase on Friday afternoon, I was eventually informed that the company in question didn’t need me any more. I had to phone my agency four times to learn this.

I’ve worked for agencies before, so I can’t say I was surprised, but the money would have come in handy. I could direct them towards this blog as an emotional blackmail ploy but, for that to work, they would have to have beating hearts in their chests rather than the bundles of offal and grit that clearly reside there. Not that I’m bitter.

Obviously this means that budgeting will be even more important in the coming weeks. So how’s it going?

Thanks for asking. It’s going like this:

Budget for June 6th to 12th = £20

Spent = £9.07

Remaining = £10.93

(By the way, if you want to budget without going the Spendaholics ‘cold turkey’ route, there’s a good budget calculator on the FSA website. It will tell you how much cash you’ve got at your disposal.)

Anyway, my method isn’t going too badly it seems. That £9 was spent at the pub on Saturday evening - a friend of mine suggested a pub far cheaper than our local, and I leapt on the idea like it was a lemon-filled Krispy Kreme. I also wangled a lift (and a drink or two, I think - can’t quite remember).

I’ve managed not to spend anything else at all, but that’s down to dumb luck really. Just before I instigated my budget regime, my boyfriend and I had stocked up our cupboards at Tesco and the petrol gauge in my car was looking pretty healthy.

If I’m still on this budget next time I’m out of food, petrol or hair dye, I might have to go on some sort of rampage. But, essentials aside, I’m enjoying a new-found appreciation for the cheaper things in life - sunny afternoons, housework and Doctor Who.

There are a couple of things I really need to buy at the moment - Juno on DVD, and a bathroom storage unit - but I’m biding my time until my Consumer Pulse vouchers come through. I hope any visitors to my house don’t expect to be impressed by a neatly-organised cosmetics collection before settling down to watch a distinctive and quirky comedy drama. They will be sorely disappointed.