Hello Dear Reader,
I’ll start this by saying that I spent just under a year on benefits and whilst I did, I spent the entire time trying to get off benefits as it wasn’t what I wanted. I’ll add to this that I was grateful that the benefit system existed and that I had a safety net that paid my rent, gave me enough money to feed my small family and meant I could just about survive until I went back to work. I paid tax before and I paid tax afterwards and haven’t been unemployed since. The benefits system changes from today onwards as ‘Universal Credit’ is rolled out with the intention that work should pay. The previous system of benefits made a mockery of going out to work when some folk were better off claiming from the government. There will be mistakes and no system is going to be perfect but people are going to have to change and they will have to learn to budget. The new system of benefits means people will have all their benefit in one payment and they will have to pay their bills, their rent and make sure they make what they have last for the month.
This is therefore a bit of a controversial post as I think it’s good to treat people like adults and give them responsibility. (I’ve taken all of my information from the BBC website and I hope what I have found out is accurate.) Housing benefit has always been paid straight to the claimant but could be paid directly to the Landlord, council or housing association if the tenant so desired. This will change and the one payment will be made to the household and paid straight into their account and they will have to be adults and make sure they pay their rent. I can’t see a problem with this, if they don’t pay, they will lose their home but adults know that!
Currently, some folk on low wages and let’s remember the biggest amount of claimants actually work but earn very little, will get their wages one week, their tax credits another week and their child benefit on an entirely different week. Effectively they get a dribble of money throughout the month. In the future, they will get everything they are paid on one day per month just like the rest of us who go out to work. Again, I think it is good to give adults with responsibility and expect them to use it wisely. Here’s the problem…….some of these folk have never had to budget and have no idea how to.
Here’s my quid’s worth of how I did this whilst I was on benefits and how I still run my house on a tight budget now. It was the dark ages and no one was paid direct into bank accounts and everything was run on cash but this is what I did.
1. Signed on weekly! On time!
2. Got paid fortnightly, in cash with a book in the post office.
3. Got a housing benefits cheque that I also had to take to my bank and pay in.
4. I would immediately write a post dated cheque and walk it the three and a half miles to my landlord and I would knock on his door and pay him immediately.
5. Not touch bank account until my cheque had cleared and I knew he was paid. To do this, I would have to walk back to the bank, with push chair and check the bill had been paid.
6. When I received my handout once a fortnight, I would buy credit on my electricity key meter, get change for the 50p pieces that went into my gas meter and I would go any buy a bag of coal. Put coal in pushchair and carry child home.
7.Go home, fill up my gas meter and put the key into the meter and then the lights would come back on and I could cook again! It wasn’t fun!
8. Put child back into push chair and walk into village and then wait for a bus that took us five miles to the nearest supermarket.
9. Buy my allotted amount of food, get back on bus, ask some one on the bus to watch the child whilst I unloaded shopping and pile it on the pavement. Grab child and push chair and just get off the bus before the bus left with us on it! Recline push chair, pile shopping bags on to it and balance child on top. Walk back from village, up hill with tired child being carried and encouraged to walk until we got back to the rented cottage.
10. Meal plan with a pencil and notepad for the next few weeks. Judiciously! that was all we had and it had to last. Meat and veg was tinned, milk was UHT and there were only eggs for the first week.
11. Have heating and lights on a strict time allocation so it would last until the next time we got some money.
12. Visit jumble sales and charity shops for clothing and household items.
13. Make all our fun from nothing, all books and toys from the library and early bed times so the gas and light would last.
It was hard and I was never so glad when I got a job in a care home. It was night work so my son could spend the night with a friend (I would be up poop creek with the current rules on childcare!) and I reciprocated by looking after the child of the single parent whilst she worked in the day. It worked for us. When our shifts swapped, then we would talk our boss into allowing us to work opposing shifts. She would meet me at eight in the morning and I would take the children home with me to look after them. I worked three nights a week and she would work three days. It’s amazing to think that for a few years that I survived on only four nights sleep a week. We can manage it when we are teens!
Monthly budgeting is what we all have to do. We get paid on the last day of the month and most of us are looking at an almost empty bank account on the day before pay day. Now I’m a worker, this is what I do.
1. Get one payment into my bank account each month.
2. Decide in advance by the means of simple arithmetic where that money has to go.
3. Pay my mortgage, pension, savings on the day I get paid.
4. Pay all of my utility bills on the day I get paid.
5. Move all savings into different accounts on the day I get paid.
6. Leave myself enough money to pay for food and fuel in my account and nothing else.
7. Pay all direct debits on the day I get paid.
8. Save up for everything I need, go without the things I can’t afford and budget for things I want but can afford.
The new benefits system is going to be controversial and I hope it works. No one should be better off on benefits than working and those of us who go out to work should be better off than those who don’t work. I’m also a liberal and believe that people should have freedom and make their own choices and their own lives and they won’t do that if they are shackled to the state. If you are out of work, then my heart goes out to you as I’ve been there and it’s dreadful. If you have ideas to share about budgeting then please share them here. If the BBC has misinformed me, then I apologise. If you have a blog of your own, then could I ask you to devoting some typing time to writing about budgeting as there will be folk who need help and want some advice.
Over to you dear reader, what do you think?
Until tomorrow,
Love Froogs xxxx
A great piece. It reads like common sense, yet often when it comes to money, our common sense goes out the window! I tend to do the same as you, but leave myself £30 a week as a safety blanket. Food shopping is our household vice though and I try and do a separate budget for food.
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I'm with you on this one, Froogs. It's mainly about education - there are frugal skills that (in my case) my mother knows about, and my grandmother taught her. These budgetting and frugalling skills have been lost or misplaced, and times have never been as tough as they are now. I spent time this weekend (volunteered for 4 hours) to collect tinned food or money for our Rossendale Foodbank. I will soon become involved in the rolling out of recipes to teach people what to do with the food we provide in our food parcels - which, incidentally, feed those between benefits or in need for 7 days (not 3 as the Trussell Trust do). The foodbank is known as RAFT - throwing a lifeline to those who need it. Some people (and a leading ex Tory politician being one of them) said that we shouldn't do this - but what do you do? Could you walk away from your family, neighbours or friends who were struggling?
There is no perfect benefit system but if you need help, then you should get help - so long as you then work as soon as you can find something!
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Great post ,I just wanted to thank you ,your blog is so full of great tips I've started to follow them and my life has done a complete turn around in the last year .
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Great, sensible advice. x
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The universal credit system is not as black and white as is suggested, especially for those self employed as I am. I am on a low wage, I dont just work the minimum 16 hours per week to survive I actually work 50 hours plus per week on less than minimum wage sometimes. the new universal credit for self emplyed individuals, automatically assumes that I make minimum wage at least,and has set a minimum income floor of 11.5k, which as you know with self employment is not always possible, as it depends on which Job you do, and also if the work is there. As a childminder I would not make this a year after expenses. Not in the area I live, as I make less than £2.50 - 2.75 per hour per child after expenses. And the amount of children I can have is capped. It will therefore force me out of this job that I love. I work damn hard and am dedicated to my profession and to the level of care I give the children I look after, I am not work shy and I do not work to fiddle the benefit system, I already budget, and am financially responsible. There is no way i could fit in another job ontop of childminding, as a single parent I would not be there for my children, so my only other option as I see it at the moment is to stop childminding all together and get a Job ( if there ar any available, they are very thin on the ground in my area) to get by.
There is this big government initative to get unemplyed women 9 se that it does not include me - very sexist) to train as childminders (no mention that it is an option) when they have brought out these new rules re self emplyment, which will mean that these poor people will be qualified but then still wrapped up in the benefit system yet again, as alot will not be able to earn the minimum income floor, who will then be sanctioned under the new rules, asked to attend weekly meetings etc etc, it is all very worrying for a lot of people at the moment, me included.
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Excellent post. I'm still learning and am constantly “jigging” my budget and my approach around to frugality around to make it work for me. I have a detailed spread sheet that keeps me on track with what's in my account and what needs to be paid out and when. Every penny spent goes into my spending diary as does every extra penny earned.
These transactions get transferred to my excel spreadsheet daily and I also check bank balances and online statements to make sure I haven't missed anything obvious.
I now meal plan on a monthly basis and have a shopping list prepared to show me what I need to get each week to make that menu - also all stored on my handy spread sheet.
I suffer from temptation (could easily have succumbed to lunch out on Sunday and then a Costa coffee later when we were shopping), and feel every victory is great - we managed to avoid both of those pitfalls and celebrated my success in frugality on the weekend.
I know my risky times for spending - weekends on the children or Fridays (my day off) - so try to avoid putting myself into the situations as much as possible. We're working to pay off our CC debt and struggle to keep to our food budget due to my son's multiple food allergies, but I'm the adult and need to not only do this, but teach my kids how to be money-savvy too.
I've no problem with benefits - but let's make them fair and hand them out with some useful financial planning advice alongside.
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Good post..unfortunately, a once a month lump sum is license to spend freely…til its gone. Drinks, betting, take away food,etc.
I hope some people figure it out, as it is the children who suffer, and with no good role models, it starts all over again….
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Sounds good, but some people just can't budget a month at a time.
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I have concerns about the universal credit system, not for myself, it doesn't effect us yet and hopefully by the time it rolls out fully our situation will have changed, and besides I'm quite capeable of putting my rent first and keeping a roof over our heads, but I know there are many people out there like my ex-husband who regularly spent the rent cheque, and made us homeless as a consequence on more than one occaision. It's all very well to say people SHOULD be responsible, and they should, of course they should, but when they aren't it is the children who suffer most. The old benefit system was a mess, but I'm not sure the new one is any better. Only time will tell I suppose.
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Gosh you had it very tough Froogs. I struggle to understand what is right and fair when it comes to social security payments as the reasons why people have to rely on them can be very complex and not just a simple matter of them not wanting to work. I have no doubt that the system adopted in England will flow into our country as we seem to follow you in just about every sphere of social service provision. People who are dependent on social welfare long term are on the margins of society and I think we have to ask ourselves why can't they change. We assume that people have normal capacities - intellectual, physical, health, emotional and can, if they choose to do so, work their way out of poverty. The thing is that people stuck in poverty are there for a reason. Lack of education, trade or skill to match job marker, too few jobs full time to absorb everyone who wants work, health problems, physical disability, mental health issues, intellectual and learning disabilities and I am sure a dozen more. I fear that too many people under your new system just will not have the capacity to plan and organise a budget or have the initiative to do what you did to survive.
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I agree with you on many points but the problem is a lot of people in receipt of benefits aren't as intelligent or organised as you and I can see many people getting into difficulty. I used to work in a hostel for homeless and disadvantaged people, providing a hot meal and a friendly face in evenings. The majority of the people were either older ex-addicts or mentally ill - people with no idea of how to budget, pay bills, cook meals, or look after themselves. For example, they'd use their benefit money to buy a new tv, but their electricity would be cut off as they didn't pay their bills! And I don't know what the answer is for people like that. They won't see that their priority should be paying their rent and bills then budgeting for food. There is a difference between won't work and can't work, it's not as black and white as the Government would want us to think. Like many of this Government's policies, they sound good in principle but may not work in reality. Time will tell I guess.
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wow, sounds like you could have done with a double buggy..one side for child and the other side for bag of coal/food bags! Bet child was filthy by the time you got back!
On a serious note, that must have been tough times.
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In the US, they give you your benefits on a debit card as some folks don't even have access to banking! Luckily, that is not a problem for me so I've had my benefit directly deposited. That means it's available to pay bills and if there is anything left, it goes to savings.
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The only thing that concerns me about this is those people who have learning difficulties, while it's nice to think that they will all have support with budgeting I fear that many will not. In addition there have been several cases recently of people being “befriended” and these “friends” accompanying them to the cash machine on the day their DLA etc arrives in their account. If their housing benefit now does too, then some with learning difficulties may be at real risk on ending up homeless because of their trusting natures.
Otherwise I completely agree with you, people should be treated like adults and have to budget over a month.
I've just posted a piece on my blog about how to reduce and keep your utility bills low and I will do as you've asked for tomorrow and post about how I budget as a single mum with 2 small children.
Thanks for the inspiration Froogs.
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I prefer things to be phased through and not a whopping change overnight. I wouldn't want people to loose their homes or not have food on the table as many of these people would probably have children.
I think financial education is really important but unfortunately schools don't talk about money, saving, budgeting much and many of us take on our parents money beliefs and habits. There are many non indigenous families that are generational welfare recipients. The knowledge and acceptability of it gets passed down from parents to children. And the cycle continues. Also once you get a job and earn over a certain amount people have to move out of their government housing - this creates a big fear for many as in my area a small 1 bedroom flat cost about $250 to $300 a week.
Here in Australia I think payments come fortnightly and include the lot - not drips and drabs. I could be wrong as I haven't been on social security often and each time I was in was just for a couple of weeks and then I got a job. But I'm lucky to be able to find jobs easily - I communicate fine, I scrub up okay, I know how to present myself, I completed high school and a bit more, I'm a great reader.
I am no expert and don't speak for Aboriginal People but this is my understanding of my region: Many adult indigenous people in my state unfortunately don't read or write, English is often their 3rd or 4th language and their communities have no long term employment that allows for customary practices such as leaving to attend funerals and ceremony that goes for days. “Sit Down Money” as benefits are often called are a demoralising necessity and can be confusing as “personal” ownership is not a strong world view as an older sibling or community member can ask for your money and depending on their link to you or their standing in community you must hand it over.
Here school attendance is also linked to benefits - if a student misses school the parent might get a cut in the money coming in. Less food on the table, a child in trouble and more family stresses. I don't think I'm for it on this one - coming from a community development model I think there are better ways on working on the school attendance issues.
I think generally benefits might need to be re-looked at in my country carefully with new creative ways. I know for many single mums getting a job is not worth it as childcare is so expensive that most of the pay would go into childcare leaving little for rent, food and other needs. It's a big topic and a very interesting one that gets people hot under the collar.
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Hi Froogs
Throughout our working life, my hubby and I have always been salaried, so we knew exactly what was coming in, whether it was weekly, fortnightly or monthly. So, we had a system for all the things that we knew about : insurances,phone, electricity, gas, mortgage and water. Council rates are paid quarterly. We pay our utilities by paying in advance a regular payment. If our usage is higher, then there will be a little due, and this is usually in winter for the gas in particular. It is never an amount that causes concern. During summer we actually end up ahead.
The mortgage of course is paid before its due date. We had fixed interest for a few years, which started off good but ended up not so good as variable rates dropped like stones.
We spend roughly the same each time we go to the supermarket. Our vehicle registration changes annually because of some form of indexation, but the invoice for that always turns up around six weeks before it is due.
So far, this has worked for us for the best part of 30 years.
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Great post froogs.
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This post is very thought provoking. Like you Froogs I spent one year on benefits. I was left a single parent with 5 children aged 4-11. It was hard. I didn't pay rent, but never managed to get any housing benefit. Looking back now I know this was a mistake but I was young and naive then. Mortgage rates went through the roof and most of my money went to keep a roof over our heads. I allocated for food and emergencies. It was a grim time. I had to account for every penny. I really hope people on benefits are ready for this change. The responsibility has shifted to them. As a teacher I think budgeting and money should be part of our school curriculum. Children need to grow up knowing it's up to them how they live and survive on what money they have. I hope the government will help the low paid self employed eg childminders. Good quality affordable childcare is essential to get Mums back to work.
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Hi Froogs :)
It's a shame that budgeting isn't a skill that's taught any more - whether at home or in schools. Though, realistically it IS just common sense.
I worked part-time when I left home, living in Plymouth and working in Liskeard, relying on trains, so was forced to teach myself to budget. And since being made redundant a year and a half ago - shortly after having my daughter - I am so grateful that I learned that skill, it is so helpful even with the constant dribble of money. Now that things are changing (thanks for the heads-up, by the way - I had no idea, normally they write to us when things are changing) it will be more necessary than ever.
Have a great week xx
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Wow. Thought provoking post Froogs. Not sure what the real underlying intention of this change is - made without any substantial changes to financial education or endeavouring to increase the availability of more jobs. Does it just hit the right soundbite? (Cynical thought!) Scratch the surface & it seems more is required to help everyone manage their own finances prudently - which is surely an admirable idea. It seems in this age of I want /I deserve many, many intelligent, educated, employed people have got their own finances in a mess, courtesy of credit cards, spending someone else's money and then struggling to pay back massive APR as well as the original sum, and only then realising that budgeting was the way forward. Hats off to those who have always budgeted.
I do wonder if fewer landlords will risk taking benefit - dependent tennants when they see more risk attached to getting their rent, and how willl this help the homeless situation? Who will bail out the feckless or generally incapable who get into a financial mess? Will it be the taxpayer? If so, is it the cost effective measure it's purported to be, presented as it is, without any support to help people budget? Or will it just encourage “secondary poverty” where there is enough money coming into a household, but it isn't spent on the necessities of life? This was the reason that child benfit went originally to mothers.
Don't know the answers, but can see some large pitfalls.
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A brilliant post Froogs.
I had it very similar to you, although I was lucky enough to have a coal man that delivered!! Our benefit system at the time was fortnightly so not quite the same long term planning that you had to do, but even so there were more days than money on many occasion.
I'm all in favour of the new system if it rolls out fairly and squarely BUT I do think there should be night classes or some such, to enable some folk to actually learn how to budget if they need them AND it should be taught in schools so that everyone has the basic knowledge to keep themselves and their dependents alive and homed.
I can see a lot of folk losing their homes and children suffering because all the months money has been eaten and drunk away in the first week or two.
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Our money comes in in dribs and drabs, state pension weekly, CSP two different dates in the month and the same with our two private pensions, when we moved the date for paying the rent changed from the end of the month to the 8th, everything is paid by direct debit, most coming out on the 1st. I check my bank account every day and use microsoft money to track expenditure so I know exactly where we stand each month.The cash flow forecast also enables me to see where we will be at various times in the year.
I shop mostly at Aldi, although there are a few things I do get at Tesco because Aldi do not stock them. Menu planning is done each month. Cupboard space precludes me doing a huge monthly shop. so I have to manage as best as I can.
I put money away for house and car insurance road tax, mechanical warrenty and road tax (£20) and for a holiday. I have used the CC the last couple of months but pay it all off each month.
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I know you read Shirley Goode Froogs;some of your readers may like this post on budgeting as it operates on a rule of 4. The post is self explanatory and makes a lot of sense to me. http://shirleygoode.blogspot.co.uk/2013/04/room-inating.html
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I feel that it is far too easy for politicians and others to label those on benefits as being lazy or incompetent. As a former Social Security officer I met many many unemployed people who were neither, and who would loved to have worked and earned a living wage. They did the best they could with the limited resources available to them, but real work, as opposed to low paid and/or part time work, is often just not available. Individual circumstances are complex and I am seriously concerned that many families will suffer as a result of these changes.
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Reading this made me think of a friend, who for fifteen years worked the nightshift, finished at 7am, then got here eldest kids to school. Then she looked after her pre school girl, for four years, and got to sleep only when the eldest were home from school for a few hours. She did this to support her family and ill husband, rather than claim benefits. My hat is off to hard working woman like her and yourself.
Unfortunately, many do not have such a good work ethic.
Julie Q
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“If your outgo exceeds your income, then your upkeep will be your downfall.” Bill Earle
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Perhaps that is why Jesus said, “the poor you will always have with you.” No government program can change human behavior, at least not for the good.
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Wouldn't it be wise, if government really wanted to be wise, to require welfare recipients to pass courses such as How to Live Within A Budget. They could employ teachers such as Frugal Queen to teach the courses. But of course I am cynical about government wishing to do anything for the sake of wisdome, but rather for the intent of buying votes with Other Peoples Money.
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An American chiming in here. I just want to add that in my country, food stamps for my family of 10 would be 3 times the amount I have budgeted for food yet we eat very, very well. I just can't understand all the fuss here in the U.S. about a food stamp starvation budget. What a load of crap.
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National Debt Line
Call 0808 808 4000
http://www.nationaldebtline.co.uk
Money Advice Service financial health check,
information on financial products and services.
Call 0300 500 5000
http://www.moneyadviceservice.org.uk
Turn2 us a charity (Elizabeth Finn Care) for
access to benefits and grants
http://www.turn2us.org.uk
Illegal Money Lending Team
Call 0300 555 2222
http://www.gov.uk/report-loan-shark
Consumer Credit Counselling Service, 0800 138 1111
http://www.thisismoney.co.uk/money/bills/article-1633404/Household-budget-calculator.html
Always open your post - ignoring bills or putting them under a rug doesn't mean that they go away.
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Doesn't get better than that. Just bookmarked it.
online loans fast
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Great post, very thought provoking. Reading the comments the situation seems very complex.
Vote Froogs into Whitehall,sort it all out. lols ;-)
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I agree, budgeting and house economics of something like that needs to be an exam that you have to take at 16 like a GCSE. No opting out.
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Hiya Froogs a large shake up due to hit many, it was suppose to be trialed in my area too but pulled when realising majority of people in area too poor or own a pc (online applications) or serious lack of skills to be able to use one. I have as you suggested placed a blog re budgeting on my blog.
Hope your having a lovely evening
Dawn
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I fully agree with you on this one Froogs. I understand that there is a lot of apprehension about this but most people will learn because the alternative will be too painful. I have already seen few of my friends who never really worked in their lives (in their forties now) for all sorts of seemingly good reasons well, magic they are working now! I believe that adults should always be treated as such and that we all have to take the consequences of our decisions, no excuses. In our local church we offer budgeting classes and we also have a food bank. I see it as doing my part in supporting the changes.
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Great post thanks! When I was in between jobs and doing agency work a few years back it was a big learning curve and taught me to live within my means more. I think the attitude to overdrafts,loans,credit cards a few years ago pre recession when the banks where throwing credit at people did such a lot of harm and people have never got over that. As for the the benefits system changes it is probably bad in a way as the money will just be spent straight away on nonsense instead of rent,council tax etc. I do not think it will be a better system somehow!
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My job is to help people through this mine field of benefits. Payments of Housing Benefit to private tenants has been paid to tenants for the last few years under Local Housing Allowance. There is scope in the regulations to have it paid to the landlord if there are financial pressures on the family - there will be similar regulations in Universal Credit.
People who are not capable of managaing their money will be given extra support and it is likely that credit unions will run 'jam jar' accounts for people so that their rent is always paid first before they can spend the money.
Those of us who work in this field are gearing our clients up to Universal Credit so they have advance warning. Supposedly the rest of the country will get UC in October but I very much doubt it as the computer system is not set up yet!!
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