Money Matters

'A BANK IS A PLACE THAT WILL LEND YOU MONEY IF YOU CAN PROVE THAT YOU DON'T NEED IT' - Bob Hope

This book is about money saving on a daily basis. I am not a financial expert so I am not going to include any legal, financial or banking advice. There are many financial organisations, books and websites to help if you are having financial difficulties and I have included some useful contacts at the end of this chapter.

I would advise anyone concerned about money to make a budget. If you find this difficult, you can download a great budget tool from www.moneysavingexpert.com Do not lie in this budget; you are only lying to yourself. Be as honest as possible and include everything. If you are not sure of amounts, look at your bank statements, credit card statements or even start a diary to highlight where and why you are spending. You cannot start making changes until you have identified where you are spending your money.

Our relationship with money is quite a complex one. We buy for many reasons, the least of which is necessity. Take away your everyday household expenses (mortgage, insurance, utility and food) and you are left with the nonessentials. What do you buy and why? Do you need it? Will you use it? Can you afford it? Can you buy it cheaper elsewhere? It is all too easy to listen to the little shopaholic devil sitting on your shoulder, urging you to spend, spend, spend. I am certainly not telling you never to buy anything nice again, just to know what you are doing and the real reason why.

The Boredom Trap

Six years ago, I was lucky enough to fulfil a lifelong ambition and own my own horse. We lived in a farm cottage so we were able to have horses on our doorstep for no extra outlay. Our horses lived out all year round, were hardy and needed little maintenance. Taking away the expense of the horses, I noticed a difference in our lifestyle and spending. Weekends were no longer spent walking around our nearest town, lunching and buying treats. Suddenly I was too busy to want or need to do this.

Looking through bank statements, we realised we were saving over £300 a month. We had not cut back. We ate the same, we had the same bills; all that had changed was not going out spending due to boredom.

Sadly, we had to move several years later and could no longer keep our horses. Once again, we noticed a change in spending patterns. Weekends, especially in the colder months, were spent in and around shopping centres. We were bored so we used to spend. We would create excitement by convincing ourselves we needed to buy a new car, a TV or whatever it was that would give us the temporary buzz. Once we had purchased that must-have item, we would move swiftly on to the next need. I have spent hours in computer shops, convincing myself to update my perfectly usable computer for a better, faster model. Once home, I then spend more hours setting it up to be exactly like the old one I have discarded.

EBay is a great example of passion buying. You can spend hours and hours looking at items, and with a painless click, you can purchase. I have spent many lovely hours bidding on clothing. Just small amounts … a fiver here, £3 there. Before I know it, I have spent over £80 including postage. It is only when the garments finally arrive that I discover some don’t fit or are not what I was expecting. I know a friend who purchased a jukebox one night when he had had too much to drink. It is too easy to spend and to satisfy that burning itch to have the next best thing.

Keeping Up with the Jones

This is a very real issue. How many of us have bought items we could not really afford to keep up the image? Maybe a friend or colleague has something and you want to go one step better? Have you acquired a new friend and you want to be just like them? We all do this; it is human nature. The key is to identify that you are doing this. Little do you know, but the friend or colleague could be up to their eyes in debt – do you really want to emulate that? We all know people who have lost money. That posh new car, the gorgeous house, the designer clothes – all mean nothing when the debts start mounting up. Happiness is something no one can take away from you. Start to find areas in your life that really make you happy and content. Surround yourself with friends who allow you to be yourself.

The Emotional Spender

We have all been there. Feeling blue, down in the dumps and life is just so unfair – why not go to the shops and buy something to make you feel better? Yes this can work wonders (until you get the credit card bill), but there are other ways to feel good. Feeling emotional, lonely, upset or heartbroken is not good for shopping. A bit like walking into a supermarket when you are very hungry – you will suddenly find you have a trolley full of snacks but no substance. The clothing lurking in the back of your wardrobe, unworn and unloved, was probably bought on a day when you weren’t yourself – how else do you explain those purple flares? Much better and cheaper to stay at home, watch a good film and eat a ton of chocolate.

Getting the Buzz

There is nothing like the buzz or adrenaline rush spending can give you. Whether it is a new car, designer outfit or holiday – it is a great feeling. However, it can be very short lived. Find the buzz a different way. I love the feeling of finding a bargain – knowing I have something I want for a great price is fantastic.

My home is Victorian and filled with period-style furniture and an eclectic mix of objects – all junk shop or boot sale finds. We are always getting compliments on our furniture or the way we have put things together. Yet we have probably not spent more than £30 on any one item.

If I need a new appliance, I can spend hours searching the internet for the best product for my needs and the best price. If you only have a small budget for clothes, why not investigate second-hand clothing retailers or buy discounted designer finds online? For the same price as a new high street item, you could have a designer or vintage piece that will turn heads. It is all about savvy thinking. Why pay more when you don’t have to? The buzz is from knowing you have saved money yet still got what you were looking for.

Kids' Pressure

Children are exposed to buying pressure every day. Watch children’s TV and the adverts will put huge pressure on the child to have the latest toy or gadget. Once at school, the need to be accepted by their peers extends to having the right clothing, toys and gadgets. It can be increasingly hard for parents to stand up to this demand.

Every Christmas families get deeper into debt, often just to give their children the best Christmas they possibly can. We all know Christmas is on the same day every year, so why don’t you budget for it? Same with birthdays: budget, budget, budget. It is also vital to teach your children from a young age the value of money. There is no shame in living within your means. Show them the fun things in life. Do you recall the presents and toys you had as a child, or do you remember the fun days out, the friendships, the great outdoors? Spend time with your children. See Chapter 8 on ‘Raising the Family’ for more ideas.

Whatever your reason to spend, identify it for what it really is. Only then can you start to change your spending habits.

Financial Contacts

The Citizens Advice Bureau

For information and help on a wide range of issues including debt, contact your local Citizens Advice Bureau or visit www.citizensadvice.org.uk

National Debt Helpline

For free independent advice on debt, call the national debt helpline on 0808 808 400 or visit www.nationaldebtline.co.uk

Debt Divas

I like this site – real women helping others with financial problems. Go to www.debtdivas.co.uk

Are you claiming the right benefits?

Need to know what benefits or help you may be entitled to? Families can claim family working tax credits, child benefits and may be eligible for help with council tax and their rent. Pensioners may not be receiving their full benefits. To check if you are able to get help, visit a great website called www.entitledto.co.uk You can then contact your local Social Security office or visit www.direct.gov.uk for more information.