Let’s talk financial wellbeing

Its Lets Talk Money Week. This year’s theme is financial wellbeing. For us, its timely. Earlier this month the Credit Union was selected as one of the finalists in the Affordable Credit Challenge.

We will be working with our software partner to develop Financial Health Indicators (FHIs).

Covering spending, borrowing and saving, FHIs will be shared with the Credit Union’s borrowers. The indicators will be used to let applicants know how to improve their financial wellbeing which will also increase the chances of getting a loan.

What is financial wellbeing?

Financial wellbeing means feeling secure because you have enough money to meet your needs. That’s needs, not wants. Fast cards and Caribbean holidays might have to wait. Financial wellbeing is about being in control of your day-to-day finances. Having the financial freedom to make choices that allow you to enjoy life is important.

Here are four steps to improve financial wellbeing

 1. Write down your budget

Knowing your essential expenditure and disposable income gives confidence in your decisions. The 50/30/20 rule helps. After paying tax you split what you have left into the three different categories: essentials (needs: 50%), flexible spending (wants: 30%) and financial goals (plans: 20%).

Read more about this excellent budgeting method.

2. Don’t use credit for everyday expenses

9 million adults often use a credit card, overdraft or borrow money to buy food or pay bills because they’re short of money.

Avoid using credit cards to pay for essential ‘needs’. It can be difficult when times are tough and money is short. For this reason, we produce regular money tips. Helping members make the most out of their money, the tips are sent to your inbox and published on our website monthly.

Sign up for Money Tips.

3. Start saving

11.5 million UK adults-that’s 22% of us -have less than £100 in savings. Everyone who borrows from the Credit Union has to save as they repay their loan. Despite living in one of the poorest areas in the country our members have amassed nearly £9m in savings.

To encourage our members to save more, we’ve launched a Credit Union Prize Saver Account. It’s the savings account with monthly prizes of up to £5,000.

We’ve long been aware of the contrast where people on limited incomes buy lottery tickets but don’t manage to save for future needs. Despite the chances of winning the lottery being so remote, people keep playing.

Prize linked savings are an alternative to lotteries, with one key feature; a lottery loss means losing money. Not winning on a prize linked savings account doesn’t cost a penny. All money deposited remains untouched.

Read more and open a Prize Saver account

Want a Christmas present idea? Contact us about our Prize Saver gift voucher.

4. Speak to others about money

A problem aired is a problem shared. Everyone has money worries at some time in their life. A cross generations perspective often helps. We’ve published tips on talking to children and young adults about money as well as talking about money if you are a couple.

An introduction to credit scoring

A credit score is a three-digit number that can determine whether a loan application is accepted. Borrowers with lower credit scores are often charged higher rates of interest.

Of course, we don’t do that at Central Liverpool Credit Union. We prefer to see our members as human beings, not numbers. We obtain credit scores, but a low score is not a reason to turn someone down. And we never charge a borrower more because of their score. Past savings and loan repayment histories are more important.

But better scores do help people get better deals on bills, like phones, gas or electricity.

Obtaining your credit report

Credit scores are provided by the three main Credit Reference Agencies, Experian, Equifax and TransUnion (formerly called TransUnion).

Individuals can contact Experian,Equifax, or TransUnion to obtain a copy of their statutory credit report. This, usually free, copy of a credit file is different from the subscription services a borrower can also sign up to. Terms and conditions should be read carefully. Obtaining a more detailed report sometimes comes with monthly fees and marketing from lenders.

The Money Advice Service has produced information about checking your credit report.

There are many factors that determine whether your score is bad, fair, good or excellent. A score can vary from month to month.

We’ve listed five things a borrower can do to improve their score below.

Improving a credit score

Everyone is different. The tips provided below are a general overview of actions an individual can take to improve a credit score. The Money Advice Service also has a guide to improving a credit score.

1.Pay everything on time

Most Credit Reference Agencies report a series of numbers next to a  credit account. An account ‘status’ of ‘0’ shows payments are up to date.  A status of ‘1’ shows that the account is one month in arrears. If you miss several payments in a row, the account might show as a default. Defaults can reduce a credit score significantly.

If credit accounts are paid on time this improves a credit score. Points are deducted for missed payments.

It’s important to note that different kinds of services are considered to be credit accounts, including gas, electricity and mobile phone accounts. Some landlords and water companies might report rent arrears to a Credit Reference Agency. Stopping paying a mobile phone contract can result in a default which significantly harms a credit score.

If lots of payments are missed and a borrower becomes subject to a County Court Judgment, Debt Relief Order, Individual Voluntary Arrangement or bankruptcy the credit score will fall significantly.

2.Have plenty of accounts

Lots of up to date accounts helps. Borrowers managing multiple commitments with payments on different days shows commitment and ability to repay. But beware. Owing too much compared to income might show that a borrower is over-committed. This can then reduce the credit score.

Interestingly if someone has very few accounts, perhaps because they’ve never needed to borrow before, the credit score is unlikely to be very high. This is because there’s no record of them being able to pay a debt back.

3. Only use a small proportion of credit card and overdrafts

A credit score can increase when credit is available but unused. This suggests that a borrower uses credit cards and overdrafts to manage peaks in expenditure, rather than spending on items that they cannot really afford. Borrowers constantly at their limits will see their credit scores fall. For example, a credit card with a limit of £500 and a balance of £50 will help with the score. But a balance of £450 will probably be driving the score down.

4. Re-register on the electoral roll

It is a criminal offence not to register to vote. But rolling registration has made this harder. Voters must register each year. If they don’t, they will drop off the register. The electoral roll is reported to all the Credit Reference Agencies, even if the voter has opted out of the public register. It is used to help prove identity. It shows stability in residency.

You can register to vote online.

5. Stay put; don’t move home, don’t move job

Lenders like stability. Knowing someone is staying where they live make it easier to maintain contact with a debtor. The likelihood of someone running away on their debt reduces. Long residency applies to people renting their home as well as those with mortgages. But people in rented accommodation will rarely have credit scores as good as owner-occupiers.

 

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A guide to alternative funerals

Following our recent guide to alternative weddings, here’s an overview of alternative funerals ideas.

Green and Eco-Friendly Funerals

There are lots of alternatives to choose from, including woodland burials, cardboard, wicker, pandanus, willow, banana leaf or bamboo coffins. Other options include tree pods, burial at sea or in your garden.  However, there are strict rules to be followed.

Non-religious ceremonies 

Registered celebrants can conduct a service in a location that isn’t a church, chapel or crematorium. This might be at home, at a natural burial site or in a hotel. Or even a beach.

 

 

 

 

Unattended or Direct Cremation 

There is no service or ceremony. The deceased is taken directly to the crematorium.

 

 

 

 

 

 

 

Donate your body to Science

Medical students learn about life-saving surgical techniques when bodies are donated. Furthermore researchers looking for new treatments and cures for diseases also benefit.

Contacting your local university for an application pack is the place to start if you want to donate your body to science.

Cryonic Preservation

Yes, it does exist outside of Hollywood!  Around 150 people have been preserved, hoping they can be woken in the future following advances in medical science to bring them back to life.

 

Plastination 

Gunther Von Hagens is famous for his controversial exhibitions using plastination.  This consists of bodily fluids being replaced with a polymer preserving the body.

However, with each body taking 1,500 hours to complete, plastination is not widely available. Typically, its on a donation basis similar to granting your body to science.

 

 

 

 

Valentines day: alternative wedding ceremonies

With so many wedding and reception venues to choose from, many people are avoiding the traditional church service followed by a reception in a  hotel or community hall.

Here are a few suggestions for the best alternative wedding venues in Liverpool:

Civil Ceremonies

A traditional Celtic Handfasting ceremony results in a marriage lasting  a year and a day.

Much more personal and intimate than a traditional wedding, the couple can write their own vows and have their ceremony outdoors at almost any location the celebrant is able to travel to.  Civil ceremonies are  usually non-religious. Handfastings are not usually legally binding so if the couple wish to be officially married, they will still need to attend a Registry Office.

Visit the Ceremony Company for more information.

Twilight Packages

Many venues, usually hotels, offer twilight packages.  These are suitable for smaller, more intimate weddings for up to 150 guests. Although this may vary depending on the venue).

There is usually a set price and a list of what is included in the package. However, don’t be afraid to negotiate some swaps to get the perfect package for you.  Ideal for those with a limited budget and a small guest list.  Search the internet for ‘Twilight Packages in Liverpool’.

Registry Office

Currently in St. George’s Hall, the Registry Office is in a beautiful venue.  Why not get married with only your two witnesses as guests and then blow the rest of the budget on a fantastic night out and honeymoon?

Visit the Liverpool registry office for more information.

Fever Pitch

Both Anfield and Goodison are licensed venues. Therefore you could choose to have both your ceremony and reception on whichever side of the park your loyalties lie.

Check out weddings at Anfield and Goodison

Victorian Splendour

Set in the University Quarter, you can have sole occupancy of the Victoria Gallery and Museum. And enjoy the exhibitions as well as this stunning building. Find out more.

More venue ideas

Have a picnic at the Camp + Furnace

Have a picnic at the Camp + Furnace

Catering for up to 300 guests.

Sharing platters are set out on tables. There’s is a late licence available until 4am for you to picnic and dance the night away.  C+F are also licensed to hold your ceremony if you want to do everything under one roof.

Hire a Mersey ferry

Hire a Mersey ferry

Catering for up to 300 guests, you can have a bowl of Scouse on your journey.  Bands are available. Or you can provide your own entertainment.

Have a round of golf

Have a round of golf

Ghetto Golf in the Baltic Triangle offer cocktails, street food, graffiti art and the option of an 18 hole, mini golf course if dancing isn’t your thing.

Fab four

Fab four

If you’re Beatles mad, you can hire the Cavern Club in The Beatles Story at the Albert Dock.

The Athanaeum

The Athanaeum

Hire the beautiful olde worlde surroundings of The Athanaeum opposite the Bluecoat Chambers in Liverpool One. A hidden gem amid  the bustling main shopping area of the City Centre.

New year, new finances

New Year is a great time to take an honest review of recent spending. Here’s a 7 step plan of action to improve your finances durng 2019.

Step 1: Assess the situation

You’re probably underestimating how much you’ve spent this Christmas. Property website Zoopla reckons four out of ten people do not know how much their monthly outgoings are. One in three admit to having ‘no idea’ how much they owe.

Step 2: Put your credit cards away

It takes 12 months to pay off a £1,000 (36% APR) credit card debt at £100 per month. That leaps to almost seven years if you only pay £30 each month.

It’s easy to overspend on plastic. But remember – credit cards do give some protection when buying goods; read more here.

See how long it will take to repay your cards off using the Money Advice Service credit card calculator:

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Credit card calculator

Step 3: Set a budget

Use the Money Advice Service Budget Calculator to get a realistic picture of your income and outgoings.

Budget Planner
Step 4: Seek advice if you are overspending

If your budget shows that debt repayments are causing real problems, remember to pay the priorities first; rent, mortgage, utilities, council tax etc. And then seek debt advice.

Step 5: Consider consolidating your debts

If you need to spread your debts over a longer period of time, or are paying very high interest rates on credit cards and loans then a consolidation loan might be the answer. Before considering such a course of action you can find some useful tips from the Money Advice Service.

Central Liverpool Credit Union may be able to provide a consolidation loans to help you repay your debt at a more affordable rate over a period that suits your budget.

Step 6: Avoid a debt hangover in 2019 – start saving

Stashing away £10 per week is an easy way to build a £500 budget for Christmas 2019. Giving up just a few bags of crisps or an alcoholic drink each week is probably enough to put aside a tenner.

Step 7: Sign up for more money tips

The Credit Union has a remit to promote financial education amongst our membership. Sign up for regular money tips to find more ways to improve your finances during 2019.

You may also find these tips from the Independent useful. The Money Advice Service provide an online health check too.

Christmas money saving tips

Christmas just around the corner. Central Liverpool Credit Union has produced 5 tips to help you budget this festive season.

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1. Work out your budget. The average household will spend £475 on gifts, £110 on food and drink, £30 going out, £20 for travel and £17 on decorations.

The Money Advice Service has produced a calculator to help you work out how much you will need.  Its important to agree (and stick to) a spending limit.

2. If you will be travelling by train, book tickets in advance now. You’re guaranteeing yourself a seat during the busiest time of year and can save up to 50%.

3. UK shoppers face most expensive Christmas dinner in a decade. Use a supermarket comparison site to find where to get the best deals. Although they are becoming harder to find, independent greengrocers can work out cheaper than big retailers.

4. Shop at outlets. Money Saving Expert has produced a handy list of 50 big name discounters

5. Plan for next Christmas. Your Credit Union provides a Christmas Club account. If you started saving in January just £5 per week would net you £235 by 1st December 2019. Double that to £10 and you’ll have almost £500 to spend.

 

 

 

 

Talking about money: planning for a funeral

Funeral costs are rising. Here’s some information to help protect you and your loved ones.

You probably already know funerals are expensive. The most straight-forward funeral can cost £1,000s. There are unavoidable expenses that are easy to overlook, such as burial fees.

Thousands of people are left unaware that funeral costs continue to spiral. One of the biggest scandals in recent years is how the unregulated funeral industry is driving up prices beyond inflation. 

In the past decade, the cost of funerals has increased more than petrol, electricity, wages and house prices.

The average funeral cost in the UK is now £4,078. The total cost of dying is an alarming £8,802 per person.

Grieving relatives are being ripped off with the hard sell when they’re at their most emotionally vulnerable. Often they are too caught up in the moment to consider the final cost.

Understandably, this staggering cost is beyond the budget of most people. If you’re not protected, your family will be left struggling to pay the bill at a very difficult time. Funeral poverty is a real problem.

Type of funeral Average cost* Includes
Direct cremation £1,600 Collection of the deceased, a simple coffin, and return of ashes
Cremation using a funeral director £3,311 Collection and care of the deceased, a basic coffin, hearse and managing a simple service; but does not include an elaborate ceremony
Burial using a funeral director £4,257 Collection and care of the deceased, a basic coffin, hearse and managing a simple service; but does not include an elaborate ceremony
SunLife Cost of Dying report 2017, and the Royal London National Funeral Cost Index Report 2017.

10 tips to help you plan better

The following tips have been reproduced from the Fair Funerals Campaign, from Quaker Social Action

1. Talk about it now. Discussing your funeral wishes with friends and family can provide clear plans and save unnecessary costs.

2. Slow down, take a breath. Don’t feel rushed into making funeral arrangements when someone dies. When we feel rushed we can make bad financial decisions

3. Shop around. Costs vary hugely between funeral directors. Get three itemised quotes – you could save a lot of money.

4. Ask about a ‘simple funeral’. Ask for the funeral director’s most affordable funeral package. Often this will be called a ‘simple funeral’

5. Are you eligible for financial help? Call the DWP Bereavement Service line on 0345 606 0265, or the Citizens Advice Bureau, to check if you’re eligible for financial support.

6. It’s your choice. There is no legal requirement to hire a funeral director, hold a ceremony, or pay for flowers or special vehicles.

7. Cremation or burial? It is a personal choice, but it’s worth noting a burial is often more expensive than a cremation.

8. What makes ‘a good send off?’ At a funeral, people remember thought and goodwill rather than lavish expense.

9. If no one can pay? Ask about a simple, dignified funeral paid for by the hospital or council.

10. Need help now? For free help and advice on arranging a meaningful affordable funeral call Down to Earth on 020 8983 5055.

For more details help and support, Down to Earth have a guide called Planning an affordable and meaningful funeral. (.pdf, 196k)

Prepaid funeral plans

With the cost of funerals increasing beyond inflation, you might consider a prepaid  funeral plan?

These plans allow you to freeze funeral costs at today’s prices. Contributing towards the cost they help protect your family, emotionally and financially, when they are at their most vulnerable time.

A funeral plan means your family won’t be hit unexpectedly with a considerable bill when the time comes.

Getting a funeral plan is an also a way of giving a final parting gift to your loved ones. You are lending them a helping hand when they need it most.

After that, you no longer need to worry about leaving your family with the burden of debts and stress, just happy memories and a legacy that isn’t eaten up by extortionate funeral costs.

Co-operative Funeral Care offer a Best Price Guarentee. If you find the same funeral plan at a lower price, they promise to beat it.

Talking to older people about money

Funerals are, of course, a hard topic to discuss. Older people may need to consider a wide range of financial topics, including wills, care needs and failing health.

The Money Advice Service have produced a guide to help you Talk to Older People about Money. (.pdf, 738k)

Talking about money for couples

One in three people say that support when talking to their partner about debt and finances would benefit them.

A recent poll found that UK adults are hiding a collective £69.6bn of secret debt from their partners. Accounting for most of the debt, 5.5m people were hiding an average of £2,000 on credit cards.

Nearly 2/3 of married couples said that they would prefer to talk politics than money.

Sharing your attitudes to money

“A conversation about your finances can be awkward and if you’ve got debt even somewhat distressing” says Jane Morgan, from Direct Line, which carried out the research. “But it’s important to ensure your partner is aware of your financial position. Having these discussions as early as possible to make sure you are prepared.”

Using these questions can help you understand you and your partner’s attitudes to money. Talking about your goals, it’s important to think about what you both want:

  • Do you prefer to live for today?
  • Are you confident in managing money?
  • Do you think it’s important to keep track of income and expenditure?
  • Do you like to shop around to make money go further or to buy on impulse?
  • Are you open to discussing money?
  • Do you feel it’s important to adjust non-essentials when life changes?
  • Do you ask for help with your money?

 

There’s more useful information to help you talk to your parner about money from the Money Advice Service.

Get budgeting

Drawing up a budget is a great way to be open about your money and debts.

A great place to start is with this calculator from the Money Advice Service:

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Budget Planner

If you found this article helpful, you can sign up for money tips here:

 

Young adults: talking about money

A poll of 1,000 18-25-year-olds found money worries were widespread. Young adults are spending a large chunk of their time  feeling anxious or under pressure.

Young adults wanted to budget. They need more information about savings accounts.

Here’s a video of 16 to 25 year olds sharing their thoughts about money:

Budgeting tips

In October we published budgeting tips using the 50/30/20 rule.

Recapping, 50% of your budget should pay for your needs – the kind of things you can’t do without. Like rent, bills, food and transport. 30% of your money should go towards ‘wants’. This is non-essential shopping like sweets, holidays and outings. The remaining 20% is for plans, especially saving.

We’ve produced an infographic to help you budget better. It can also be downloaded here

Before you start, the Money Advice Service has information about rent, running a bank account and how you are taxed when your start a job.

Your budget should allow you some spare money to start saving. The Money Advice Service has produced a useful guide to savings accounts, including opening one with your credit union.

Why not kick off now? Here’s a budget planner to get you started:

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Budget Planner

If you found this article helpful, you can sign up for money tips here:

Talking to children about money

Teaching young children about money makes them better-off in the long-run.

A research project running since the 1970s found kids who were taught about saving were more likely to have a decent pension in later life. Budgeting skills meant less debt. Awareness of real-life costs makes people shop around.

For the under 5s

You can improve the financial knowledge of a child by involving them with financial decisions as soon as possible.

In the supermarket and need to buy ketchup? Ask a child to help choose, based on your budget and the price of the different brands. You could also allow them a set amount of money to pick something from the shop. Be clear that ‘when it’s gone it’s gone’. Talk about the choice they made and what they might do differently next time.

Here’s a video with some real-life examples:

Children in this age group can also learn to recognise different coins. Notes are worth more than pennies. Money should be kept safe.

For the under 10s

With some maths under their belts, kids can now learn the correct value of coins and notes.

You can show children that some things cost more than others. Toys. Buses. Chocolate. They vary in cost. They all have different benefits. What’s the advantage of spending on certain things over others? If you spend all your money on toys and have nothing left for the bus, what are the consequences? A long walk home in the rain?

This is probably the age when your children might think about a bigger purchase. As a result, they may develop savings goals. A toy or football kit might be out of reach today. But saving small bits of pocket and birthday money can help them reach their goal. How long will it take to have enough money? What are the consequences of temptation and an early spend on something else?

If the youngster doesn’t have a savings account, why not open a Junior savings account with the Credit Union?

Teenagers

If older children have started earning pocket money, can they keep track of their hard-earned cash? A recent survey found only half of 15-17-year olds who receive money keep track of their income and spending.

Teenage years are a great opportunity to teach the difference between wants and needs. Our earlier post about the 50/30/20 rule will help. To recap. 50% of your budget should pay for your needs – the kind of things you can’t do without. Like rent, bills, food and transport. 30% of your money should go towards ‘wants’. This is non-essential shopping  like sweets, holidays and outings. The remaining 20% is for plans, especially saving.

It is a good time to build on what they know about real life costs. If they dream of owning a car, explain the cost of MOTs, insurance and general maintenance. Could they budget for a week’s worth of food without overspending?

Part of teaching your teenagers how to manage their finances comes down to being strict with the money you give them. Not bailing them out if they overspend.

Here’s a video produced by teenagers kicking off a conversation about money with their peers:

But what about the parents or guardians?

Martin Lewis has produced 55 tips to save money if you’ve got kids.

We hope you found this information useful. You can sign up for more money tips here: