Beat Your Money Worry

A major survey shows money is the leading cause of anxiety for us
Brits*. We asked investor and mentor Bindar Dosanjh to solve four common
cash concerns

1. You’re struggling with your credit card repayments
Consider switching your credit card balance to another card via a zero
per cent transfer deal. Go on-line to compare the best offers on the
market. Remember if you only make the minimum payment on your card each
month, it could damage your credit score as it suggests to future
lenders that you’re struggling, making it less likely they’ll offer you
a competitive interest rate.
If you’re paying a high APR, consider taking out a personal loan at a
lower rate, which will give you a fixed monthly repayment and a set
period to clear the debt, providing you with some certainty.
If you really can’t afford the repayments, seek free, independent advice
from your local Citizens Advice Bureau, rather than using a fee-charging
debt management company.

2. You’re living beyond your means
Start paying for as much as possible in cash, as sometimes credit and
debit cards don’t feel like real money, if you’re a natural spendaholic!
If you revert to cash, it might make you think twice before splashing
out.
Go on a ‘spending detox’ and for the next three months, don’t spend on
anything apart from the absolute basics – rent, bills and food. Start
taking lunch into work, entertain friends at home instead of going out
to dinner and do your weekly shop on-line, so you’re less tempted to
over-fill your trolley.
Remember using an unauthorised overdraft will trigger a host of extra
charges, so act fast. If you think you’re about to exceed your overdraft
limit, contact your bank asap as they may be willing to increase your
authorised overdraft.

3. You’re about to buy a house together and your partner doesn’t know
you’re in debt
Hiding a debt from a loved one is surprisingly common, but of course
never a good idea. The longer you keep your ‘financial infidelity’ a
secret, the harder it’ll be to come clean. When you apply for a mortgage
your broker will go through both your finances with a fine toothcomb,
asking you for details of all outstanding loans, credit card debts and
bank statements. It’s much better to have that difficult conversation
with your partner beforehand, rather than in the office of a mortgage
broker.
Your partner may even be able to offer some solutions or brainstorm ways
you can cut back, so you can pay off your debts before you invest in a
house together.
Print off and file all your outstanding bills etc, before you have the
‘big chat’ so at least you’ll appear to be taking steps to tackle the
debt issue.

4. You have no savings for the future
Ideally we should all have been saving 10 per cent of our income every
month since the age of 25, but in reality few of us do. The earlier you
start saving for retirement, the less you’ll need to put aside monthly
to achieve your goals.
By October 2018, it’ll be compulsory for your employer to automatically
enrol you into a pension scheme – and the UK’s largest employers have
already started phasing this in. If you wish to opt out, you need to
tell them. But if at all possible, try to stay in – if you decline a
pension scheme your work contributes to, effectively you’re turning down
free money!

You should also aim to have at least six months of living expenses set
aside, in case of losing your job, but of course paying off debts is the
first priority. See section 2 above for ways to start saving. When
you’re back in the black, make your pension your next priority.

*2015 survey by Optimum Research.

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Bindar Dosanjh is an award-winning landlady, property investor, mentor and lawyer. She started out as a secretary and now has a multimillion-pound portfolio. See www.smartcorewealth.com