Managing Money

LOANS

Loans are available from a variety of different places e.g. banks, building societies, credit unions, finance companies or pawnbrokers.

The extra money that you have to pay back on top of the amount you borrow (interest) will vary enormously, depending on where you borrow from and for how long.

The company has to satisfy itself that you can pay back the money, and most will run a credit check to see if you are a good or bad risk.

if you are under 18 you will need an adult to act as guarantor and agree to pay for you if you fail to pay.

if you are considering a loan, make sure that you check out the amount that you will have to pay back, and compare it with others. Get some advice if you are unsure.

BANKS AND BUILDING SOCIETIES

Banking

Shop around and see what sort of accounts there are, do you get paid interest on your money and if so, how much?

Is there and overdraft facility, if so how much and what does it cost? Can you deal with things over the telephone and on the internet?

Try not to be too tempted by gifts that are offered to entice you, make sure you find out the facts first, then gof ro the best deals.

Post Office

The Post Office is a convenient place for some poeple to open an account. there are different ways to save. You can pick up leaflets from your local Post office or check out the website for more information!

Banks

Pick up leaflets from different banks and compare them carefully. There are many different sorts of bank accounts available, with new versions appearing all the time, but the two major types are current and savings accounts.

Building Socities

If you have a savings account ot a mortgage with a building society, you are a member of it, you have rights to vote on issues and receive information.

Many building societies have now become banks, and most offer the same sort of service that a bank would.

Credit Unions

These are non-profit organisations, owned and controlled by members who all have something in common.

You can save with a credit union, get a low cost loan or other financial services. Jersey's only credit union is the Community Savings Ltd.

You can contact them on:

Tel: (01534) 737555 or email: community.banking@tiscali.co.uk

You can find out more information from their website or download their leaflet.

 

CHARGES

Bank Charges

Different banks make different charges.

You will need to find out what you will be charged for, how much and when.

Sometimes you are charged if you are overdrawn (spend more money thatn you have without prior agreement with the bank) and sometimes you are charged extra if the bank writes to you to inform you of this.

Beware! these charges can add up if you don't bank wisely; ask the bank for a list of charges.

CREDIT CARDS

You normally have to be 18 before you can get a credit card.

Credit cards are another way of borrowing money, and the amount of money (interest) that you will pay back on top of the amount you borrow varies quite a lot.

If you are considering applying for a credit card, check out the different rates offered first.

Before you are offered a credit card, lenders try to assess whether or not you are likely to pay the money back, and then make a decision whther or not to lend.

To do this, they may contact a credit reference agency, which holds lots of information on computer about most adults in the country.

They hold information about things like previous credit history, or any problems related to that.

If you are turned down for credit, the lender may not tell you exactly why.

If you want to know, ask for details of the credit reference agency that they consulted.

You can then write and find out what information they hold on you for £2 (approx). You must tell them your first name(s) & surname, address and any other addresses that you have lived at in the past 6 years.

For more details about this you could ring for a 'No Credit' Leaflet on 0870 600 8100 or contact the Citizens Advice Bureau ~ Freefone: 0800 735 0249

INTEREST

This is money being added to your account by the bank (in return for you lending them the money that you put into the bank).

The amount you get varies, and some accounts don't gain interest at all.

OPENING A BANK ACCOUNT

 If you want to open a bank or building society account, you will need to take some form of identification along with your money.

The bank or building society will have a list of documents that are acceptable for proving your ID to them.

if what you take isn't on this list, they will probably ask you to bring something else...don't take it personally.

Usually two items are needed, one of which has your name and address on it, and another which has a photo and your name and address on it. Do you have a passport, driving licence, medical card, work or college ID card?

You may have to take along a gas, electricity or phone bill, even if it's in the name of a parent, or a letter from a solicitor verifying who you are.

Debit/Switch Card

This card can be used for buying or paying for things, and most can be used to withdraw available cash from your own account.

Cheque Book

You might be issued with a cheque book.

You fill in the name of the person or company that you are paying the money to, along with the amount in words & numbers, sign and date it.

This is an instruction to the bank to pay the money. You may not be able to have a cheque book until you are 18, but you can check this with the bank.

Cheque Guarantee Card

You must make sure you have enough money in the bank to cover the cheque (unless you have an agreement with the bank) otherwise you will probably end up paying bank charges and owing more money.

These cards are usually given to over 18's with a regular income.

Current Accounts

These are accounts that you can have your wages, salary or any other money paid into, and you have a cheque book, bank card etc.

Sometimes you also have a debit card, which you can use to buy things with (providing you have enough cash in the bank to pay for it).

You can also set up direct debits and standing orders (where payments are made on your behalf) to be paid from a current account.

To help you keep track of your money, you get regular bank statements, which list all incomings and outgoings.

Savings Accounts

Savings accounts don't usually have the same facilities as current accounts, but you are paid interest on the money that you have in them.

The amount of interest varies quite a lot depending on the type of account, whether you save a fixed amount regularly and whether you have to give notice to get your money out or not.

You can get accounts where you can pay in as little or as much as you want and draw out as and when you need to, but interest in not usually very high on these.

Overdrafts

An overdraft facility is agreed between you and your bank.

If you have an overdraft, you will have access to more money that you have in the bank, up to an agreed limit.

If you spend over the agreed amount, you will be charged quite heavily.

Some banks charge for overdraft facilities and all banks charge if you spend more than is agreed.

PERSONAL BUDGET PLANS

Budgeting

Budgeting is a skill that sometimes takes a bit of practice!

Making your money last, paying your way (any board or bills etc.) and saving is a bit tricky.

One of the best ways is to plan carefully, listing all your incoming money and your outgoing, take the outgoings from the incoming money and there you go!

See what's left over and decide what to do with it. Simple? You may find a budgeting plan useful, particularly if you are living independently.

If you would like help putting a plan togethere contact us at YES and we will be happy to help you with this.

Bills & Payments

There are many different ways to pay bills, depending on the type.

If you make a firm arrangement, some bills can be spread out so that you don't have to pay all at once, such as utility bills (gas, electric, water etc.), but others need to be paid as soon as possible.

Some can be paid directly, some through the bank, internet or telephone.

Never send cash through the post! You can send postal orders (buy them at the post office) or cheques.

Look on the back of the bill, there may be a list of ways to pay. These might include:

- Direct Debit: Easy to set up providing you have a bank account allowing this. The amount taken via direct debit can vary depending on the payment requested.

- Standing Order: This needs a bank account but can be useful if you are paying the same amount every month.

- Magnetic payment cards: Some companies provide these and will tell you where you can make payments on them. Take your money along with the card to make a payment. Post offices provide this facility.

- Stamps: You can buy stamps to save up for bills and payments such as TV licences, water bills etc.

If you are struggling to pay a bill on time, don't just sit on it! Contact the company involved (by phone or letter) and ask for advice. They would mucg rather know if you're having difficulty at an early stage, and might be able to suggest a different arrangement to pay.

If you do make contact with the company, ask for the name of the person you have spoken to and keep a note of all the phonecalls for reference. Keep all bills and letters together, a box or file specifically for this would be useful.