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Posted on August 31st, 2010 in Debt.
A ‘spendaholic’ or ‘shopaholic’ is often defined as someone who likes to shop and spend a lot. Normally, spendaholics buy things in excessive amounts – some of which they really have no use for – and spend beyond their limits. Over spending can result in excessive credit card repayment each month and, like those twenty pairs of shoes you could buy everyone week, credit limits you don’t actually need.
The signs of a spendaholic can be hard to spot in yourself but obvious in others. The biggest sign is the need to spend and shop constantly. Looking forward to your weekly spree in the town centre may seem like a healthy way to spend a weekend but it isn’t financially healthy week after week. If you only feel happy when you’re pushing your credit limit every month then you may in fact be a spendaholic.
Secondly is the need to buy things we won’t use. If you already have twenty pairs of shoes in your wardrobe that you don’t really go out in but you’re tempted to buy a new red pair then you really must ask yourself why. Constantly buying what we don’t need is a sign of excessive spending and, of course, a waste of money.
By spending too much you may find it difficult to stick to shopping lists when out and about. If you struggle to pay off monthly outgoings and find yourself raising your credit limits time after time whilst you’re still out looking for the biggest bargains and hording new shirts and shoes, you’re probably spending too much.
Spendaholics frequently spend their own necessities and means. A dangerous sign of a spending addiction is spending money set aside for your food, rent and bills, which will leave you short of your monthly essentials.
If you find that you’re spending habits are priority above everything else you could be heading straight for debt and financial difficulty. It’s a perfectly reasonable idea to spend the extra money in your bank account, as long as it really is extra and everything is paid beforehand. If you’re first desire when you get your wages is to blow it all in an Outlet store then take a step back and consider your situation – do you really need another new outfit, or should you buy your weekly food shop first?
Always keep an eye on your shopping and purchases. If you cut out all the credit cards and work out your monthly outgoings – including your shopping – with your monthly salary and your outgoings are more than what’s coming in then you’re spending beyond your means. It may be worth putting the wallet away for a few nights a week and eating in!
Posted on August 28th, 2010 in Money.
I quid a day for a quick snack doesn’t seem like a lot. Every little expense, however, can turn out to be a big shock to the system when added up over the weeks and months. Take a look at these five examples.
Cigarettes: 1.1billion people smoke in the world. If you smoke, on average, ten cigs per day you’re probably spending £3.50 or more a day. That’s £24.50 a week, nearly £100 a month and £1,200 a year. And that’s only if you smoke ten cheap cigarettes. Not everyone likes the idea of smoking but it really should be considered as the biggest money saver – if you really can’t give up, smoking ‘roll-ups’ could last three days longer. That’s £6-£8 per week, £32 per month and £384 per year on average, a total saving of £861 a year.
Morning Coffee: A Tall (small to me and you) coffee costs £3 in your average coffee shop. This is the same price of buying cigarettes – you can, of course, buy cheaper coffee but the price still mounts up. You yearly take-out coffee could pay a month of credit card bills and household bills – would getting up ten minutes early to make your own coffee really be too much effort to save nearly £1000 a year?
Take-Away: Can’t be bothered cooking? Buying a takeaway? If you buy at least two takeaways for a family per week it could cost as much as £50-£60, depending on your takeaway. Those quick McDonalds Burgers or chips actually cost an average of £550 per year – and that’s only the minimum one burger one chips order. Take the extra effort to make your own food and, even you really want to save, visit the local market where you can get a chicken twice the size of a supermarket bird for £2 and spend an average of £35 per week even for a family.
Travel Expenses: The bus stop I used to get on and off at for work would cost £1.80 per journey (£3.60 per day, £1,210 a year). For some odd reason, the bus stop not even two minutes before mine would cost £1.20 per journey (£2.40 per day, £806 per year). By walking more, even if you own a car or use a train, you could save yourself a surprising amount (and save your health). Be smart about travel – take the bus, not the taxi. Walk to the shop ten minutes away, don’t drive. It all adds up!
Brand Name or Value?: I would personally vote value if money is tight. ‘Value’ products are considerably cheaper than brand names if you shop at supermarkets – some branded toilet paper can cost £2.10 for two rolls, but the value can cost 59p for four rolls. The quality may be better, but you might even find you’re mostly paying for the brand name and packaging, not the product. Take a closer look when shopping for essentials.
Posted on August 27th, 2010 in Debt.
Are you paying attention to your finances? Have you considered how much you could have been affected by the economic downturn? It’s harder to tell than ever whether or not we’re among the most ‘at risk’ in the country wide financial crisis. What should you think about when assessing whether or not you’re facing a financial disaster?
Do you know how much you owe?
Do you have a tight rope on how much you owe out each month or do you hide your face in your hands each time a bill is posted? Losing track of your spending is the quickest way to get into debt and the hardest way to get out of it – you don’t know where you’re spending big and what to cut out. This is a sure sign of financial trouble and an indications you have no control over your money worries.
Are you borrowing to pay off outstanding debts?
This is perhaps the biggest sign of financial trouble. By borrowing more to pay off existing debts you’re basically admitting you don’t have the money to pay off your other debts. Adding additional credit and payments will not help in the long run.
Can you afford savings?
If you can’t put any funds away for savings at the end of the month then this isn’t a good sign. You’re monthly outgoings could be swallowing up your salary and preventing you from making the emergency fund to get you out of future debt and, quite obviously, indicate that the majority of your outgoings are debts. If something arises other than a credit card payment, like an emergency breakdown, the stress with double in the form of charges when you sub your debt payments for something important.
Are you avoiding the situation?
Are you still spending even though money isn’t going anywhere and expenses are becoming extraordinary? If you’re avoiding talking about your huge credit card payment or phone bill, or quietly taking out another loan whilst still telling your partner you can afford to treat them to a three-course meal, you may be facing denial of your financial situation. Hiding from your troubles and hiding them from others only escalates a dangerous situation – don’t be afraid to admit to your tumbles and turns, ask for help.
Constantly worrying about your finances?
You may simply consider yourself a worry-wart, but be aware that this is the biggest shout-out when you’re in trouble. You should always tackle your main concerns before they grow – with your debt – and avoid denial or little secrets from friends and families. 61% of people don’t sleep because of stress when they’re in financial trouble – if you find yourself restless at the thought of next month’s repayments take it as the ultimate wake-up call and act immediately.
If you think you could be in financial trouble and are struggling to manage growing debts, get in tuoch with MoneySolve today for free, confidential, non-judgemental advice.
Posted on August 26th, 2010 in Money.
Despite using money in our everyday lives, complaining about how much things cost and working out our monthly salary vs outgoings, there might actually be a few surprising facts you haven’t heard about money and finance. We’ve listed a few of the most interesting facts around – from a brief history to the banking system, a few shocking debt statistics and our spending/debt habits.
•The UK is one of the very few countries in the European Union that doesn’t have the Euro as the currency and still retains the age-old British Pound Sterling.
* Countries around the world spend on average £1.1trillion on education, but £1.3trillion on the military each year. It seems not a lot of people’s priorities have changed with the (financial) times.
* In 1973 New Yorkers spent $100 million buying flowers. Looks like 100million lucky ladies in 1973.
* During the Middle Ages it was a custom for wealthy families to keep their valuables in the cellars of a goldsmiths’ shop. The goldsmith would give a written receipt for these items – the items (which included gold, coins and jewels) could be redeemed at any time with the receipt. Eventually, those who didn’t fancy running back and forth to the shop every time they needed money began using these receipts for purchases. Businesses throughout Europe began accepting these receipts and the practice spread – paper receipts and paper money became legal tender, which contributed to the banking system in use today.
* The first income-tax was collected in 1914 in America. Americans paid an average per capita tax of forty-one cents, and only 1 percent of the population had to pay Taxes.
* The inflation rate has risen by 2,066.87% since 1914. By using this, something that would cost £1 in 1914 would cost around £21.66p today. But remember – your salary and earnings also rise with inflation over such a long period!
* According to statistics, the cost of housing in the United Kingdom has risen and will continue to increase, with the latest at 1.7% in the previous year. Ask your grandparents how much they bought their house for compared to your own – you might be surprised!
* The Government’s National Debt (PSDN) increasing by £353,500,00 per day.
* The Great British pound sterling is the world’s oldest currency still in use and, as we mentioned before, Britain is one of the few countries whose currency has remained the same despite being in the European Union.
* UK personal debt stood at £1,457billion at the end of June 2010 and the 12-month grow stayed at 0.8%. That means individuals all over Britain owe more money than the country produces per year.
Posted on August 25th, 2010 in Debt.
Those who think that only normal people with normal earnings get into debt would be surprised at these 5 celebs. With fame come the big bucks – and the big spends. It’s not just us mere mortals who may struggle with our money… the list of celebrities in debt is a long one.
Donald Trump makes it to the top for irony. The most famous real-estate developer in the country has struggled with huge debts since the ‘90s, forcing him to corporate bankruptcy and near personal bankrupt. An economic recession and huge bank loans cost the Taj Mahal Hotel (the flagship of his empire) $1million in debt. Donald was forced into bankruptcy and, in 1992, the Trump Plaza was also forced into bankruptcy. Although he did manage to pay off a staggering $900 million in personal debt by 1994 and recovered somewhat, his empire (Trump Hotels and Casinos) were forced into bankruptcy for the third time.
The King of the Ring Mike Tyson may have been a world class fighting machine but he couldn’t easily fight his way out of debt. The boxer earned an astonishing $300million in his career, which he spent on cars, homes, clothing, food and his two pet tigers. He racked up $27 million in debt and owed $13 million in taxes to the US Government at the height of his 400k a month lifestyle.
But not even Iron Mike could compete with the most well-known celebrity spender of all time. The late Michael Jackson, who was reportedly $500million in debt. He was rumoured to have spent $6million in a few short hours and spent $20-£30million a year more than he earned. Famously, Jackson was said to have willy-nillying said “I’ll have that, that, that and… have I got that already? I’ll have it anyway,” – and not just on a shop in Asda!
MC Hammer’s accountant should have probably pointed at his money and said ‘can’t touch this’. The star’s spending spree was well documented and talked about even after he was clear. He had a $12million estate, gold-plated ‘Hammertime’ gates, nearly 20 expensive cars, 2 swimming, a number of ranches and an impulsive spending lifestyle. He admitted that he had gone through nearly $20million on lavish items and even more through generosity to his friends and family. He filed for bankruptcy in 1996 and was drilled relentlessly by interviewers and TV shows for years to come about his financial state.
Even royalty is not unscathed by debt. The Duchess of York (or apparently the Duchess of Debt) has been told the only realistic way to pay off her £5million (and counting) debt crisis is the file bankruptcy. No senior royal has ever been declared bankrupt, and it’s not the first time for the Duchess after facing £4million previously.
