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January 2008 Archives

Martin Lewis' 4-step plan to put you back in the black

Posted by Samantha Castle on January 30, 2008 3:57 PM

As promised here are Money Saving Expert - Martin Lewis' top four tips, which I have solemnly sworn to stick to, to put your credit card debts back in the black.
1 Clinically assess you finances: Collate old bank statements and calculate what you actually spend and earn. If you're still overspending, fixing your current debt isn't enough. Look at the whole year- to allow for Christmas, holidays and big one-off bills. If you just look at one month the budget won't work. A free automated budget planner will do it for you at www.money-savingexpert.com/budgeting. Then see where you're overspending and stop it.
2 Slash the interest costs: Then more of your repayments will go towards clearing the actual debt, rather than feeding the bank's profits. The easiest way is to do a credit card balance transfer.
3 Danger! Minimum repayments: Nastily these credit card minimums are designed to keep you perpetually in debt. A typical minimum repayment is 2% of the reducing balance each month, so if you had a £3,000 debt at 17.9% it would take 41 YEARS to repay and cost £6,300 in interest.
To fight back, with that £3,000 debt, simply FIX the monthly repayment at the first month's minium to £60 (2%) and you'll clear it all just seven years at a cost of only £2,000.
4 Repay the most expensive debts first: The more expensive the debt, the quicker it grows. So list them and push every penny at them and just cover the miniums on everything else. Even if these steps don't work, Martin says he has never seen a debt problem that is unsolvable. The most important thing is to get help from one of the non-profit debt counselling agencies like the Citizens Advice Bureaux, National Debtline or the Consumer Credit Counselling Service.
Martin's best selling book - The Money Diet is available from all good bookshops.

Up the creek without a paddle...

Posted by Samantha Castle on January 26, 2008 5:54 PM

I’ve been feeling very depressed these last few days, I think it’s because I’ve had to adopt a different routine than normal, i.e. No shopping!
I’m denying myself all the things that used to make me feel better, but put me in debt. I’m probably feeling this way because I’m denying myself the pleasures and not feeling any benefits. I have a bit of an impatient personality sometimes and like instant results, that’s why I don’t diet and don’t buy exercise videos.
I realise this is only my first month of Penny Pinching but it’s only a week after pay day and I’ve got no spending money- just enough for bills and everyday living and I can’t fall back on a credit card to supplement anymore.
This month I’ve found myself altering my spending habits, like by-passing my usual treats of hair products and make-up and using the few pounds in my purse to buy Mr Muscle sink unblocker! What’s happening to me?
Anyway by way of treat the *loml surprised me with a night at the cinema on Friday, the film wasn’t that great but I got to eat popcorn and was reunited with my old friend, the MacDonald Quarter Pounder with cheese and large fries. I felt a bit better about my situation after that except if my expense claim doesn’t come through next week I’m really up the creek without a paddle.

Money Saving Experts

Posted by Samantha Castle on January 23, 2008 1:34 PM

This week I have been seeking professional advise regarding my spiralling debts and how I can try to make amends for this Christmases frivolous spending.
Millions of people, I am sure, will be in the same position as me this week as January's credit card statements come flooding in through the letter box.
After transferring my balances to 0% interest free cards my minimum payments are now lower than I was paying before, however due to my financial position a couple of the credit card suppliers insisted I take out payment insurance in order to secure the low rate. But this kind of defeats the object of saving money, however I recently found out from Money Saving Expert, Martin Lewis that I can cancel this insurance and thus lower my monthly payments once again by just contacting the credit cards. Result, thanks Martin!
Martin Lewis is a bit of an expert when it comes to saving money, as well as a popular web site the self confessed 'money saving expert' has regular newspaper columns and television slots giving people like me helpful money saving tips and advice on how to beat the system and save money.
He says the biggest danger with credit card debt is that you don't actually know what your debts are from, they are just "willy-nilly overspends" rather than planned, budgeted borrowing for something specific. How true his observations are, I certainly don't have anything to show for my spending over the years- my tan from three holidays a year have faded long ago, my car is paid for (thanks for the help mum!) and on its last legs and my wardrobe is bursting with out-of-fashion designer gear two sizes too small to wear.
I've already worked out that I spend more than I earn, I just wish I discovered this blatant fact years ago, anyway enough of the self-deprecating attitude, according to Martin I have borrowed to fill the gap, as most of my income goes on paying debts I have borrowed more to maintain my lifestyle.
"End result: Nothing left," he says. You said it Martin!
Martin gives his four top tips to sort out this kind of debt, which I aim to follow to the book and will include on my Blog in a few days time....so watch this space!

So where am I Penny Pinching…

Posted by Samantha Castle on January 16, 2008 12:35 PM

As of last week I’ve completely cut out the fast-food visits and coffee fixes, by making pack-lunches and salads and bringing my cafeteria into work, for that fresh made coffee taste, and although I now have to set my morning alarm a little earlier than normal I've probably saved about £10 a week. Still, I can't help feeling like I’ve lost a best friend not smelling, tasting and having that greasy, bloated, satisfied feeling that I used to get from fast-food. But it was getting embarrassing when the drive-thou teller recognised me and asked if I was having my usual!
Definitely time to cut back, save my penny’s and probably get healthier in the long run too.
I have also begrudgingly knocked all the unnecessary fashion and girlie gossip magazines on the head like Heat, OK! New, First, Star and Closer, to name a few. I have just kept the one weekly - Grazia, to keep me going. Plus I also find that I get a good read from the Sunday papers and supplements which form part of the weekly food budget. So without all the weekly and monthly trash-mags I am saving about £7 a week.
I also finally got rid of my old gym membership which I never used and although the place was amazing its still cost £35 a month. So me and *loml enrolled with the Councils FFit Card scheme and paid £7 each for a years membership with access to all Conwy County leisure centres. All we have to do is pay an extra fee (with 30% discount) each time we want to play squash or badminton or use their facilities. That's a saving of over £400 a year!
Although I've given saving totals it’s difficult to add up exactly how much I’m Penny Pinching, but I know it's got to be a few hundred quid each month as that’s how much my credit cards increased when I relied on them to supplement my income. Although after this budgeting exercise I now feel totally depressed at the realisation I’m poor, very poor, but I do also feel a tiny bit motivated by the fact that I’m on my way to managing my debt and pinching those penny's.

So exactly where does all my money go?

Posted by Samantha Castle on January 13, 2008 9:05 PM

Well the large majority of it, in fact £686.84 a month goes on three loan repayments, approximately £80 on credit card repayments and about £15 on store cards. That’s an eye-watering total of £781.84 a month in debt repayments!

I can’t believe I’m being so honest about all this, but I’ve been doing my research on money saving tips and debt free advice and all this honesty is allegedly going to help me in the long run. According to the money experts when you are honest to yourself about your spending habits it’s the first step in the right direction to freeing up your debts.

My loans can be reduced by cancelling the insurance on them, but more about that at a later date. I have already balance transferred my two credit card balances to other cards that are giving either interest free or lower interest rate deals- I just need to make sure I don’t spend on them again and to then reduce my monthly repayment to the minimum.
I have to admit I’ve not cut the old ones up, as is so often advised, as they may in the future offer one of these deals so I can continue transferring my balances until they are paid off, you get the picture.
What I can’t change is the rent and food bills, so they will stay the same, coming in about £300.

When calculating a budget plan of my finances like this its clear from the totals that I’m spending more than I earn and I’ve not even started to take into consideration living costs each month like petrol, gym membership, mobile phone, clothes and make-up, not to mention my daily lunch-time trips to Tesco for my magazine fix, Asda for my bargain cashmere and DVD’s and finger-licking KFC, MacDonald’s and Costa coffee! But at least now I can see where I need to start my penny pinching.

Welcome to my Blog

Posted by Samantha Castle on January 7, 2008 4:42 PM

We all overdo it during the Christmas period because we tell ourselves we'll kick our bad habits in the New Year. But setting unachievable targets is demotivating- I always used to keep a diary which read like Bridget Jones' - Weight: too heavy to mention, Alcohol intake: Constantly drunk, Swearing: Too many times to count.... and every year I would vow to change my ways, lose weight, eat healthy, take my make-up off before bed, cut down on the red wine and every year, without fail, by February I would be feeling guilty and comfort eating (and drinking) after my will power had yet again given way.

I am pretty sure this time of year exists only to make us feel terrible about ourselves, and the likes of Paul McKenna and Rosemary Conley feel really good as they line their pockets with our money.

It's becoming increasingly fashionable to mock New Years resolutions because they often end up as seven-day wonders or even less. We're so used to multi-tasking at the risk of focusing on nothing, so when we focus on two or three things that matter most can it often be met with such pessimism.

But still every year we look ahead to the next 12 months, and we make New Year's resolutions, although I sometimes wonder if they worked in the first place, we wouldn't have to keep making them every year.

I used to live at home with my generous parents where I never paid towards any rent or house-hold bills, and used to lead a very active social life, drive a nice car and enjoy at least two holidays aboard a year throughout my twenty's and although I had a student loan, two bank loans, three credit cards and several store cards I never felt out of control and always had spending money. I now realise this was mostly because I paid off one loan with another bigger one.

But its only now that I'm cohabiting with the love-of-my-life (*loml) in lovely North Wales that I'm really having to watch my spending. Now I have to contribute towards the rent and bills and buy all our food (and cleaning products!?) to keep our snug one bedroomed basement flat and I watched as my outgoings grow considerably more than my income. Now every bit of plastic in my purse is maxed out, I already owe three times my salary and don't have anything to show for it!

Something has seriously got to give if I am to remain blissfully happy with the *loml. Its time to make a new years resolution to tighten my purse strings and stick to it and become a Penny Pincher.

Log on each week to my Penny Pinching Blog and monitor my progress- see if and how I manage my money....next week I'll be looking into just what I waste all my hard earned cash on and where I can start cutting back.

This page contains an archive of all entries posted to Penny Pincher in the January 2008. They are listed from oldest to newest.

February 2008 is the next archive.

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