Pearl’s Blog
One Month On From This…
Hi guys,
I said in my first blog post about my debts "hopefully this time next month (let alone next year) I will be a little less unhappy with the situation and, well, after sharing with you guys I definitely feel less ashamed…"
I was really touched by the immediate responses I had from people who read that post and I'm so thankful for the help and support that followed.
I really can't believe the difference a month has made, I've learnt so much and feel that I've made a massive dent already. On the downside I've learnt some more, courtesy of Money Saving Expert (MSE) and my own experiences about how messed up our financial situation is as a society (as well as my own personal financial situation!)
I've also learned that miracles do happen when you set your heart and mind to dealing with a problem, from the small everyday miracles to mighty ones. Magic is out there!
I've learned that you should never ever walk into a bank without a firm goal. If you go in for "financial advice", "a review of your accounts" or anything vague you may well end up saying yes to whatever they offer or walking out without cancelling that direct debit or changing your account (and getting rid of fees). It's so hard to break up with your bank that I feel there should be some kind of counselling offered to help you get through it.
Quick Tip – Call your credit card companies and ask them to lower your rate. I saved £250 for the year!
Quick Tip – You can get free tea or coffee (one a day) with a My Waitrose card.
Quick Tip – When you switch your Tesco Clubcard points to Virgin Atlantic airmiles you get 1,000 bonus miles.
I believe that a financial diet needs to be sustainable just as a food diet, so I took some time to really consider what I spend and who I want to support with my spending – local businesses, charities and great massage places!
Altogether with credit card switches to 0% I have saved (or will when the cheque for my whiplash injury clears!!) a total of £169… a month! Yes a total of nearly £2,030 in interest a year!
Unfortunately I also got turned down for a new 0% credit card, but used the eligibility calculator on MSE which said I had a 70% chance – not infallible! I'm now setting my sights on a cashback card with a low APR.
Quick Tip – Keep checking your existing cards for offers. You can also ask when you call your credit card companies – sometimes they will increase your limit and offer you a 0% transfer deal but it's easier to check online.
I also decided to use a technique from the "4 Hour Work Week" book – dreamlining to use my dreams as targets for saving money. Saving £1800 is one thing, saving enough money to go to Vegas with the boyfriend is another!
Quick Tip – go crazy listing your fantasies and budgeting for them. Many of mine are quite cheap and some of them are even profitable – teaching Aqua for example. Getting my eyelashes tinted was another thing that I just hadn't made time to do this year – just ticking off a goal off my list motivates me to keep going. I also put down 1-2 massages a month to keep my body stress free, and visited the Destinations Show to remind myself of my travel dreams that I've put on hold. (This is the body equivalent of checking out the clothes you've lusted after but thought, "I could never wear that.")
I discovered that I have become hopeless outdated with regards to finance.
I was against tarting around energy companies but saved £216 a year by switching provider.
I hated the idea of haggling for my broadband but…
…was very excited to save £196.80 by threatening to switch over to Virgin from BT. Then I also learned…
Quick Tip – don't trust a word BT say. Called back today to find that nobody knew what I was talking about, no order was put through and I'm still paying the same massive bill. There's going to be one more call to BT and then I'm off to Virgin! I save more money in the first year there (the last 6 months of an 18 month contract are more expensive but still cheaper and better service than BT). Alternatively I could always go sit in Starbucks and use their WiFi.
Sadly the need to adopt an aggressive attitude to haggling for energy, telephone service and even insurance mean that the most vulnerable people – elderly and disabled users are unlikely to get the best rates and deals – which to me is just downright wrong.
Another very important thing I learned this month was that I need to "man up" and make sure my prices rise in line with my costs and other factors, so some of my prices are going up from the Chinese New Year! So far so good.
Quick Tip - I also put my empty car parking space on JustPark – made £10 so far.
It's worth checking out the MSE list of how to earn more (asking for a pay rise is right up there at the top of the list) but as with saving money you do need to prioritise. I could be earning money right now by taking surveys on iPoll, but at 65p for a 20 minute survey I think my time is better spent developing new songs for class and advertising. I checked out several late flights I've had but they were not quite delayed enough for compensation (man it felt like they were but that's because of the chaos of arriving at 11:45pm instead of 9pm into Heathrow!)
Plus I saved half the cost of my buildings insurance, to do which I had to email my freeholder and check I was allowed to switch away from my broker – another £155 saved this year!
I also learned how to check my credit reports for free – it’s actually very simple and if you want to give it a go I'd recommend the free for life service (see MSE). It's not vastly different from Equifax and Experian, (which you have to order then cancel within the free month) but I have to sit down at some point and call them both to cancel, which I am not looking forward to. The big difference with Experian is that it tells you the relevance of the information i.e. as I'd been shopping around for insurance on comparison sites these showed up on my credit report, but they don't affect your rating – neither do searches from Vodafone etc. The big news from Experian is that in order to improve my credit score so that I can get better rates and 0% offers I need to pay off a lot of my debt. Wow, what genius thought up this system? Unfortunately like a lot of things it is a Catch 22.
Quick Tip - check your credit report quickly and for free - it’s nothing to be scared of!
I also remembered that money doesn’t buy you happiness. When things go wrong in your life having a great body or great finances aren’t going to be the thing that gets you through - what gets me through is great friends, great family and great classes! But it’s nice not to have to worry too much about your own health or money when other stuff is going on.
As I went through all these different steps I realised that I had tried a lot of them before; tried to speak to my bank and been intimidated when they suggested they might get rid of my overdraft if I requested to extend it, been told to get lost by a debt helpline because part of my debt is business related, I've made small in roads into my debt and then put it back on again, but this time I feel empowered, more in control, less willing to take no for an answer and determined and motivated to keep on keeping on.
As we say with Zumba, everything works when it comes to fitness, but it's making the class fun as well as effective that makes it work. Saving £20 a month is not going to get me out of the hole I'm in, but £20 + £20 + £20…. Means I'll be able to get back into my financial bikini, maybe even THIS summer!!!
Much love, Pearl x
Thursday, 19 February 2015
