Hello Dear Reader,
First of all, thanks and apologies. Thanks to everyone who sent emails to Tracy about budgeting and money management. Apologies, we were not able to read them all out today but will do when I’m on the Tracy’s radio programme again on Sunday 12th January when we will be discussing personal debt and how to get out of debt.
If you want to listen to Tracy and I, along with Jen, the local vet who gives advice on pet care then click HERE and move the cursor to the last hour.
Below, I’ve added my radio script of some tips and ideas and contact details to help anyone get out of debt.
The UK is in the grip of a debt epidemic
- People who can least afford it have the most debt
- 8M households have no savings
- Consumer debt has trebled since 1993
- Outstanding debt on British credit cards - 55.6Billion
Facts from The Guardian Newspaper’s financial section
The poorest are paying a ‘poverty premium’ - mainstream banks won’t lend - payday lenders, doorstep loans and ‘rent to buy’ stores who sell at twice the price of mainstream stores and then charge very high rates of interest to customers who can’t get credit anywhere else.
The best thing any British family can do is get themselves out of debt!
1. Work out what you owe and who you owe it to - if you have no means of paying this back, for example if you lost your job since borrowing the money contact
Step Change - 0800 138 1111 - debt management advice
Christians Against Poverty - 0800 328 0006
These offer free debt advice and will help you get out of debt - beware of debt management companies who make money out of debt.
2. Set a budget
- food
- clothing for children - for adults - make do with what you have other than essentials
- travel to work
- car costs
- B/day C/mas for children only
- The rest goes into debt repayment -a debt is a bill! Pay it monthly when you get paid! Always aim to pay more than the minimum - Pay off one debt at a time and then take that amount and add it to another debt - it’s referred to as ‘snowballing’.
3. Be disciplined - if you fall off the wagon - get right back on it! You will pay off debts but you must stick with your debt repayment plan.
4. Cash only/debit card only spending! No more store cards or credit cards - burn them, shred them but you can’t afford the debt you have - you certainly can’t afford any more!
5. Organise your bills
- pay everything by DD on pay day
- even insurance - more expensive but if this is the best way to discipline yourself then go ahead.
- put money into a savings account, again by DD for car costs - or annual bills
6. Switch and save - energy suppliers, internet providers, phone providers
7. Get rid of everything you can live without - it’s not forever
- Contact TV - give notice to satellite
- Contact any subscriptions - give notice
- Contact mobile phone - give notice - go PAYG
8.Sell everything you don’t need -
- online auctions - old toys, clothes, CDS - any money, no matter how small can go towards debt repayment
- two cars? go down to one
- 1 car? can you live without it?
9. Change the way you eat
- put a basic menu together for a week at a time
- check the cupboards, freezer - use up what you have
- shop with a list
- don’t waste food - get portion sizes right - use up everything
10. Learn to control you impulsive shopping behaviour.
- never shop when hungry
- have no spend days, build them up into no spend weeks
- keep a spending diary - look at what causes you to shop.
Over to you Dear Reader. Join the pledge and work towards debt freedom. What initial steps are you going to take to become debt free?
Until tomorrow,
Love Froogs xxxxxx
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Was sad to hear about the people who took out “payday” loans to pay for Christmas, because they haven't learned it is not about “stuff”….not sure if some will ever learn, but it is important to keep spreading the word!
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The menu planning really helps us and we don't go round the supermarket finding things we don't ned or want. I can stick to my food budget if I meal plan. Thanks for your help and advice this year. “Sticking to it” here in Bucks.
Love to you and the three fur babies in Cornwall. X
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We are lucky in that we don't have any debt other than our mortgage. However, over the past year we have found that costs have spiralled so that we no longer live within our means each month and have been having to dip into our savings far too often. In 2014 this had got to change: I am going to start budget and menu planning which I haven't done until now. We don't live extravagently and I use charity shops for my own and some of the children's clothing - if we can't afford it, then we don't have it. Sadly, even this mantra isn't enough any more. My other aim for the year is for me to get back into work - I haven't had paid employment for 15 years due to a combination of health and childcare issues and we have relied on my husband's salary. I have been volunteering to get something worthwhile onto my rather out-of-date CV and have done a qualification with the Open University (sadly this has become rather expensive and so I discontinued my studies earlier this year as I was unlikely to be able to get back from a future job what I was going to be investing financially).
2014 will definitely be a frugal but hopefully a positive year!
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I am joining the pledge to become debt free. Overdraft and small amount on no interest credit card. Very determined and will keep reading your blog for motivation when I flag. Thanks Froogs for all the encouragement. Happy New Year to you and yours.
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Batch cooking and meal planning are a great way to save money. Also eating seasonally will save money. I'm lucky to be debt free with no mortgage, but this is because I've always been frugal and lived within my means.
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I cant join the pledge to be debt free this year as it is just not possible in one year but i will continue to be as frugal as i possibly can having more and more no spend days 2 this week at the moment and tomorrow will make 3 , i was lucky enough to buy a load of meat the other day with yellow stickers with menu planning i am going to make it last with what i already have 2 months using menu planning that learnt from you , at the moment i need a hair cut and colour , it was august when i had the last one , i will colour it myself but am on a mission to try and get a cheap haircut., by constantly doing all this i will work through my debt as, my pledge will be not to have any more debt ever xxx
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Once again, some fabulous advice. It never hurts to revisit it over and over. The more we hear these reminders, the more natural it becomes for us. Thank you so much for all you do.
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Great advice. We don't have any debt but are in the “how much can we save for retirement?” phase of life. I am watching our spending on food, buying discounted gift cards for gasoline, the drugstore and one grocery store, using a gym that works with our health insurance discount, scouting out free entertainment and taking full advantage of art museum memberships, took online safe driving courses to reduce our auto insurance, and generally working from a budget. The goal is to see how much we can put away by seeing how little we can live on while still going to see family in other parts of the US.
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I plan to be debt free this year (apart from mortgage) so pledge to work hard to make this happen. Since following your blog (May 2013) we have shaved off thousands of pounds of credit card debt - yippee - and plan to continue. I have bulk cooked for many years as I work full time and always cook from scratch. This winter our central heating comes on for 1 hour in the mornings. The woodburner provides heat for the rest of the time. Thank you do much for sharing your journey with us - as a novice quilter, your quilting tutorials have been a great help & I have made several quilts as gifts. I now view large mens shirts in charity shops as fantastic quilting supplies - your blog keeps me on track - many thanks!
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I'm told that you can contact local colleges that do hairdressing/beauty so that students can practice cutting hair. You only pay a few pounds. Same for cheap meals at colleges that do catering. Personally, my friend cuts my hair (and my husband's) and I do her mending and alterations in exchange
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Fortunately I am debt free but my dirty secret is that it is almost impossible for me to live on my pension. On this I buy groceries for 5, everything else for my two daughters and me, and many odd things for mum and dad. However I am not always paid back and on Friday alone the amount was just shy of $40 and Sunday was $50. Somehow I have to manage to plug this overwhelming leak without offending either of them as I am their carer. The joys of dementia. I also have an ex who owes me so much but in reality he has perjured himself and the judge let it slide so I can kiss that goodbye too.
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We won't become debt-free this year, but my goal is to reduce our expenses as much as possible, build up our savings, and pay off our two credit cards in 2014.
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I have no debt but I am really happy I have saved money from my power bills,I work from home and have people here all day so I need heating on all the time but I changed my old door. and other little things and the bill was down My water bill is haif that of most people here ,there are two of us and I do laundry for three.I saved a fixed amount every week this year for christmas and paid for all the presents except one.I had enough points in the local supermarket to have a third off my bill too .I always cook from scratch as I am home. I sew and knit too.So a big thank you and a very Happy New year to you and your family. Liz
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We're working on it. I would like to add a note of empathy - it's not a negative, I'm not saying it's impossible, but just so much harder! - for those who, like us, don't HAVE a monthly pay day. The self employed, those who like us have lost jobs and now work via agencies, meaning weekly pay of random amounts, seasonal workers …. we had an all to brief spell this year of full employment, with a predictable monthly amount on a predictable day and let me tell you, it is frugal HEAVEN! So for all those out there without that major blessing, lets pray this will be the year you get a payday to rely on!
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I agree Jackie, I have sporadic income and can earn anywhere from £300 a month to £2000 a month, unfortunately the last 12 months it has been the lower end of these quotes and my income has been supplemented by benefits. Due to my ill health I have not been able to work on agency or bank etc, but hope new year will bring me more work.
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Hey Froogs, are you saying that if you don't pay annually for insurance, the companies charge a premium for going monthly? Here in Oz, we have monthly premiums, and it is exactly 1/12th of the annual charge and it is a direct debit.
I worked out what my electricity and gas are and pay weekly to the providers to ensure minimum bills through the winter months. We usually get ahead in summer. It doesn't hurt. If you get paid weekly, set the payment weekly; fortnightly - fortnightly. It makes a huge difference. Also, many of our electrical and gas providers give discounts for paying on time. Pre-payment puts one in that category. Savings can be quite substantial.
Empty all coins into a money box at the end of the week. Those gold coins really add up. You can either cash it in for the groceries, or bank it into the savings account.
If you aren't a public transport user for your daily commute, take your cuppa with you in a travel mug. Saves a fortune on not buying cuppas at convenience stores on the way. Do the same for the return trip.
Home cooked is cheaper than takeaway. It really is.
Handmade gives you a hobby as well as an avenue for creating clothing and gifts for yourself, family and loved ones.
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Same thing here in the USA. All you have to do is turn on the TV and see screaming mobs of people knocking each over to get into Walmart on Thanksgiving night to know that something is seriously wrong.The people I work with talk incessantly about their “stuff” off and on all day and what they are going to buy next. Then they let slip that they are 2 months behind in their mortgage payments.They work overtime to pay for more stuff and rarely see their children.
Right now everyone is talking about how glad they are that Christmas is over and all the additional Christmas debt they have accumulated. When I mention that we don't exchange gifts people look at me like my head is sewed on backwards. They ask me what we do for Christmas and I tell them we go to all the Christmas concerts and plays instead of spending time at the mall. We keep it simple,,remember the reason for the season and stay out of debt.
As always Froogs you are spot-on with your advice!
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I pay all insurance premiums annually but i think its best for people who are not great with money to pay all bills monthly.
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I had a real struggle with family -and lost the battle. Announcing no gifts other than to grandchildren caused such a furore, I backed down. I cant seem to get through to my in laws that we only have our pension to live on. We budget through the year and manage very well. But this Scrooge feels no Christmas cheer when I have to scrat round to buy something for people who have everything and more. Solved in one way they all got one of my paintingss or partners photographs. Probably hanging in one of their loos .
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I'll take that pledge. We cut way back on Christmas and everyone in the family considered it a positive experience. I've already written my budget for the next 3 months and see that 2 small debts will be gone by the end of that time, then I start to snowball another debt and save more.
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Fortunately we learned our lesson a few years back and now our only debt is our mortgage. I do use a credit card for online purchases but I pay it off in full every single month. I pay most insurances and bills monthly by direct debit, but put money by in a seperate account for the car tax, insurance and breakdown cover and also for home insurance which cost more for monthly payments. We are hoping to have our mortgage paid off within 5 years and hopefully less than that. I overpay as much as I can each month while still keeping something in savings. I am looking at alternative ways to earn a few extra £s from home since at 56, after 30 years as a stay at home mum, and despite having OU qualifications and gaining experience by volunteering, I am finding it impossible to get part time work. I am already selling some of my hand sewn bags and hoping to start a small business selling PDF files of some of my vintage knitting patterns, and also buying and selling vintage craft items on Ebay or Folksy. We need to boost our savings as neither of us will have an adequate pension. I saved £270 in my sealed tin this year after only 9 months and hope to do better in 2014, and I intend to live for as long as possible on my stockpile of Approved Foods goods and what's in my freezer. Your tips for food budgeting, menu planning etc. are always helpful and reading your blog gives me a boost when my resolve is flagging. Thank you.
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I pledge that this coming year I will finally be debt free ( other than mortgage ). Have just done interest free balance transfer, set up direct debit for regular monthly amount ( not minimum payment as per normal). Cupboard and freezer stock-take done, meal planning tomorrow, New Year cook up and vowing to have a no spend January ( wish me luck ). I have devoured your menus, re-read your advice and I am ready to hit it hard. Froogs, you are a blessing to us all, your experience, advice and encouragement truly are a gift from God. Thank you.
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I'm in Oz too, and have found it easier to negotiate a discount on insurances when I can pay annually in advance. It's a bit of a scary way to do it, but I love knowing that it's out of the way for the year.
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Froogs, about 10-11 months ago, you mentioned reducing heating costs by 5%. I am not sure why it took so long, but the light finally came on! Instead of fiddling with the temperature, as I always had before, I simply changed the times that the automatic thermostat turned the furnace on and off. Wow!
This year, at the beginning of the heating season, I played with the thermostat again. I reduced the daytime temperature by one degree and again changed the times that the heat comes on and goes off.
Yesterday, I got my natural gas bill. I use natural gas to cook my food, heat my water and heat my home. I also have a large home of about 3,600 square feet and heat it all day, since we are retired. That said, my bill this month was $189.26. I don't do level pay-that's how much I used. The average temperature last year was 35 degrees, and I used an average of 5 therms a day. This year, I used 6 therms, but the average temp was only 26. 26/6 = 4.33; 35/5 = 7, so I am ahead of the game. I think.
I had always expected we would downsize when we retired. Now, I am more determined than ever to sell this house and buy a smaller place.
I would like to repeat Tasmanian Minimalist's comment, because it is so important: Once again, some fabulous advice. It never hurts to revisit it over and over. The more we hear these reminders, the more natural it becomes for us. Thank you so much for all you do.
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Froogs, about 10-11 months ago, you mentioned reducing heating costs by 5%. I am not sure why it took so long, but the light finally came on! Instead of fiddling with the temperature, as I always had before, I simply changed the times that the automatic thermostat turned the furnace on and off. Wow!
This year, at the beginning of the heating season, I played with the thermostat again. I reduced the daytime temperature by one degree and again changed the times that the heat comes on and goes off.
Yesterday, I got my natural gas bill. I use natural gas to cook my food, heat my water and heat my home. I also have a large home of about 3,600 square feet and heat it all day, since we are retired. That said, my bill this month was $189.26. I don't do level pay-that's how much I used. The average temperature last year was 35 degrees, and I used an average of 5 therms a day. This year, I used 6 therms, but the average temp was only 26. 26/6 = 4.33; 35/5 = 7, so I am ahead of the game. I think.
I had always expected we would downsize when we retired. Now, I am more determined than ever to sell this house and buy a smaller place.
I would like to repeat Tasmanian Minimalist's comment, because it is so important: Once again, some fabulous advice. It never hurts to revisit it over and over. The more we hear these reminders, the more natural it becomes for us. Thank you so much for all you do.
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Great blog. We have just started our journey towards being debt free. I am 48 now and I took out my first loan when I was 14. I can't remember what it was like to not have debt hanging over me. The other thing that is smothering us in the modern world is the amount of stuff we own. I am drowning in a sea of stuff which we are now systematically selling through ebay, car boots etc. We live in a caravan. We did not move into a caravan for financial reasons, we moved into a caravan to have the freedom to just hitch up and drive away into the sunset. It is impossible to be free when you have debt and stuff. By selling stuff you can kill two vultures with the same stone. Here's to FREEDOM!
aman
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