2007 August | Daily Debt Advice by Abacus Finance

Archive for August, 2007

Stop trying to keep up with the Jones’s

Thursday, August 30th, 2007

The Jones’s may be drowning in more debt than you can imagine.

Trying to keep up appearances is little more than a costly illness. You cannot judge someone by what they have as you don’t know how they got it. Maybe they are financed up to the eyeballs and are in misery worrying about their debts.

Your spending decisions should not compromise either your own or your family’s long term financial security. Do not concern yourself with getting one over on Bob from next door as his television is only 42 inches.

There is no such thing as being materially complete. When you’ve bought everything on your current wish list, you’ll have thought of something else you can’t do without.

Giving into sort term gratification can be the root of long term debt misery.

Maturity is often defined as the ability to delay gratification, so keeping up with the Joneses is very immature.

Posted in Slightly Comical, Spending Less | 1 Comment »

Arrange for you direct debits to get paid just after payday.

Wednesday, August 29th, 2007

This way, your essential bills are paid on time and you can budget for the rest of the month.

Not only does with allow your to make payments on time and to avoid late payment charges and bank charges, you could get benefit from defering payments until your next months wages without any cost to yourself.

If payday lands before the end of the month, and your direct debits etc are paid throughout the month, simply call each company and ask to shift them to the day after you get paid.

Almost all companies work from 1st of the month, and they are still being paid in that month but you are saving a whole months outgoings and you are paying them from your next wage.

Posted in Debt Management | No Comments »

Fixed tariff or water meter? Which is cheapest for you?

Tuesday, August 28th, 2007

You are charged for water based on one of 2 methods:-

A fixed fee based on the size of your property
A part fixed and part usage charge.

If you have a large house, but live on your own, you would be better off on metered water.
If you live in a smaller property, with your family of 9, then you’ll be better off on a fixed charge.
As general rule of thumb is you’re better off on metered water if the number of occupants exceeds then number of bedrooms.
If you are on metered water, then there are many things you can do to reduce your bills with compromising personal hygiene
Some water saving tips:-

Fix dripping taps.
This could waste as much as 90 litres a week.
Turn off the tap when brushing your teeth.
Bushing your teeth with the tap running wastes almost 9 litres a minute. Rinse out from a tumbler instead.
Keep cooled water in the fridge.
You won’t have to run the tap for ages to get a cold drink.
Wash clothes on a full load
The average wash needs about 95 litres. A full load uses less water than 2 half loads.
Shower
A 5 minute shower uses about 1/3 the water of a bath.
Boil just the water you need
The is no need to boil enough water for half the street everytime you make a brew.

Posted in Spending Less | No Comments »

Use internet banking to check your statement everyday.

Friday, August 24th, 2007

Know for sure how much is in your bank account at any given time.

Get into the habit of knowing exactly how much you have in your account and when direct debits and other standing orders are due to be made. This is easy to do by online internet banking.

Not only will this reduce costs to you in less charges from your bank and creditors for missed payments, you will be more focused on how much you are spending and how much you need to keep in your account to budget for essential bills.

Posted in Debt Management, Spending Less | No Comments »

Don’t prioritise debt repayments based on who shouts the loudest.

Thursday, August 23rd, 2007

Those most actively chasing payments do so as often they have least legal right to your money.

If you fall behind with loan or other repayments, pay your highest priority debts first. For example debt that could eventually result in imprisonment (ie court fines) or repossession (ie secured debts) should be addressed before unsecured creditors.

Unsecured creditors know they can’t legally ask more from you than you can realistically afford each week or month. They also know that if are struggling repaying money owed to them, you’re likely to have other debts to other creditors you are also struggling with. Therefore they are clambering to get you to pay them ahead of everyone else.

Either treat all creditors equally, or make lower payments towards debts with the lowest interest rates while targeting higher interest debts.

Posted in Debt Management | 1 Comment »

Are you getting the best mortgage deal?

Wednesday, August 22nd, 2007

Money saving expert Martin Lewis lists this has his No.1 money saving tip.

If you have completed the introductory period of your mortgage, you should investigate which deals are currently available. Your first port of call is to phone your currently lender and say:- “I’m considering switching mortgage, and would like to give you the opportunity to offer me a better deal before I look elsewhere”.

I’ve tested this with my own mortgage lender as my deal expires in 4 months. They were happy to extend the discount for a further 2 years. If I had not asked , they would have raised my repayments by £170 per month. I saved myself £4000 over the next 2 years by simpley making one phone call.

Posted in Mortgages | No Comments »

Understand the true value of loyality cards.

Tuesday, August 21st, 2007

Don’t get suckered into thinking you’re the one benefiting from earning points.

Loyalty cards operated by the major supermarkets and other retailers serve 2 purposes:-

Firstly, they perform great market research. They can see exactly what you are spending your money on and where you are doing it. This is far greater invasion of privacy than any current national ID card proposal. They then use this information to target marketing at you.

Secondly, and more importantly, you end up spending more money with them and earning them more profit. If this were not true then such schemes would not exist.

Many people loose sight of the fact that they get back just a couple of percent of what they spend. Am offer of 3% discount would not turn many heads in a high street window display.

People become emotional attached to building up points as if it were on a par to putting money in a saving account.

Of course, there are excellent offers to be had for people who know how to play the system. If you do your weekly food shop in the same place every week, you may as well take advantage so long as it does not make you spend more than you would.

Cash back credit cards
The above also applies to cash back credit cards. Typically you may get a few percent back on purchases for 3 months, then 1% thereafter on a card with an APR of 15%. So, you only profit from such an offer if you settle your card balance in full each month and are not seduced into spending more by the effective 1% discount.

Posted in Spending Less | No Comments »

Stay well clear of credit repair scams.

Monday, August 20th, 2007

The is no such thing as credit repair – other than by prompt and continious credit repayments.

Credit reports contain only factual information about you, credit you have applied for and payments you have missed. There is no way of removing information that is unfortunately correct - It stays there for 6 years.

It can be true that you have a damaged credit file due to incorrect information; therefore you are advised to obtain a copy of your credit report to make sure this is not the case.

You may also may want to make sure that entries that should be there are not missing, for example notification of satisfactory payment of a debt relating to a CCJ.

See the link for advice on fixing incorrect information on your credit report > Correcting Credit Reports

Posted in Credit Records | No Comments »

Have you got the correct Tax Code?

Friday, August 17th, 2007

If you have the incorrect tax code, you could be paying too much tax.

Your tax code is issued by HM Revenue & Customs (HMRC) based on information it has about your taxable income and allowances: it tells your employer or pension provider how much Income Tax to deduct from your wages or pension.

One company offering a advisory service (www.taxrebateservices.co.uk) claim an average rebate of £900 for every case they accept.

Posted in Tax and Benefits | No Comments »

Be cautious with home equity loans to consolidate debt.

Thursday, August 16th, 2007

If you fail to maintain payment you can’t use a debt management company to help you out.

Remember that a secured loan is secured from the lenders point of view, not yours. They have the security of knowing they can force the sale of your home should you fail to maintain payments.

Turning unsecured dent in secured debt, so to can spread the payment over a longer period may seem to be a solution to unaffordable credit repayments, but the consequences of not being able to maintain payments are worse. A least with unaffordable unsecured debt, you can use the services of an debt management company to get payments reduced, but they can’t help with secured borrowing.

Posted in Debt Consolidation, Debt Management | No Comments »

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