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.

 Yeah, cheap stuff….

Wednesday 16th July, 2008 - £8,850.98 in debt…

So, apparently inflation is at an 11-year high, Gordon Brown’s telling everyone not to chuck out their food (maybe he wants it for himself…?), and anyone who’s anyone is trying to save money on groceries. It’s the nearest I’ll get to being fashionable while I’m on a budget, so I thought I’d join in.

Last week I was busy getting geared up for a weekend away with the girls, so I thought I’d use www.mysupermarket.com to check whether my favourite wine was on offer anywhere. 

MySupermarket is a nifty little site that compares prices from four major UK supermarkets (Tesco, Asda, Sainsbury’s and Ocado) and tells you where you could save the most money. You can give it a list of your usual shopping and ask it to compare the whole lot, or just have a browse for a particular thing - toothbrush, minted peas, whatever.

The wine I was after always seems to be £5.49 whenever and wherever I buy it, without fail, so I wasn’t hopeful. But, according to the site, it was available for £3.89 at Sainsbury’s - what a result! Hooray! And by the time I got there, it was £5.49.

Is this because it only compares online prices? Was I too slow? Is the universe punishing me for something?

Anyway, four days later I overcame this setback and decided to try again, giving it the details of all my usual monthly shopping and asking it to find the cheapest deals. Obviously it’s impossible to do this properly, as you’ll always end up getting impulse purchases and seeing different deals as you browse through a shop, but it’s good to know which one will be cheapest for the bare essentials.

As it turned out, Asda was the best of the best. As a lifelong Tesco shopper, I was a bit wary, but desperate times call for desperate grocery shopping. Unfortunately, the rest of the world and all its shaven-headed children had clearly had the same idea.

The savings we made included:

* £1 for four pints of milk (some kind of special 1% fat milk though - where will I get my fat from now, eh?)

* Various bready things from 10p because we shopped near the end of the day.

* Lemon drizzle cake for £1.79 (near its use-by date but I’m sure that won’t be a problem, and it solves the issue of where my next chunk of fat is coming from).

* Asda own-brand tinned cat food at £3.68 for nine tins.

An hour and a half later, and we’d spent £78.76 - not bad for a month’s shopping for two people, and a saving of about £10 compared to Tesco. But we spent at least half an hour longer in Asda than we normally do at Tesco, had to navigate a hellish assault course of screaming children and squinting old people, and were served by the winner of Grumpiest Till Person 2008. Was it worth it?

The jury’s out on that one, but if I have to clear up one more pile of Asda own-brand meaty-chunk cat puke, I might have to say no.