After the expense of Christmas and in many cases early payment of wages in December, the months of January and February can feel difficult with finances squeezed and hard decisions to make. In January 2017, 60% of enquiries to the Licensed Trade Charity website and helpline were from people seeking advice on money problems or financial support. The charity, which supports those who work in pubs, bars and breweries, is offering the following advice to beat New Year money blues on the most common money issues that people have at this time of year…
1 Don’t Prioritise Credit Card Payments
Of all the money worries that surface in January, problems with meeting credit card payments from Christmas spending is the most common. Whilst this can be scary, you should remember several things:
– Credit cards are not a priority debt such as rent, council tax and utility bills, which means companies are restricted in what action they can take so don’t panic. If you pay credit card debts off at the expense of rent, for example, you could still lose your home so make sure you know what needs paying first.
– Do not avoid paying credit card bills completely. It will be viewed more favourably if you make minimum payments rather than no payments at all.
– Call your credit card company. Providers are now much more geared towards recognising people are in trouble and helping them. In some cases, people are able to pay off as little as £1 per month to avoid missing payments.
2 Talk To Your Landlord Or Mortgage Provider
Rent or mortgage payments are a priority debt, and failure to pay can result in more serious action. Don’t fall into the trap of putting them off at the expense of credit card payments just because those companies are more proactive or aggressive in chasing what they are owed. Be honest with your mortgage provider or landlord, whether they are local authority or private, and ask what they can do to help. Local authorities are generally sympathetic when people are in trouble and may be able to put you on a payment plan for the arrears. It is also worth asking your local authority if you are entitled to housing benefit, which can help with your rent.
3 Avoid Council Tax Issues
If you are in arrears after missing a payment, call your local authority to talk about your situation otherwise they will actively chase the arrears. Options include spreading payments over 12 months instead of 10, or you may be able to agree to pay off a smaller amount each month. If you are on a low income, you could also qualify for a reduction on your council tax bill. Whilst local authorities can send bailiffs to your home, be reassured that this is a last resort and they need to have applied for a liability order against you before they can take action to recover any arrears.
4 Check Your Utility Bill Tariffs And Payments
Unlike credit cards, utility bills are also a priority debt so do need to be tackled, and there are two things that you should do to help ease worries in this area. Firstly, ring your supplier to renegotiate payments as payment plans do exist which could help you manage what you owe. Secondly, speak to your supplier about changing tariffs. Millions of people are on more expensive tariffs than preferable ones available to them, as they have never asked to switch to the most appropriate rate.
5 Shop around to reduce other costs
Utility bills are not the only area that you may be overpaying on, and it is worth shopping around to see if any of your other monthly or annual costs can be reduced. One pub worker who contacted the Licensed Trade Charity with money problems was encouraged to look at alternatives to her home contents insurance policy and reduced it from £600 to £200 a year. Uswitch can help you save money on everything from utility bills to insurance, broadband and mobile phone contracts.
More practical help and information on managing personal and business debt can be found in the money section on this website. If you would like to talk to someone about the issues above or any other money problems, call the charity’s helpline. The helpline is operated by trained advisors who can give an initial assessment of any problems and direct you to a free debt advice organisation or the Licensed Trade Charity Services team for financial support. It is free and open 24 hours a day 7 days a week on 0808 801 0550.