Think About Money

Even when you have tried to increase your income and make your money go further, you may still find that you don`t have enough to make ends meet. Now is the time to look at your outgoings and assests.

Look at your expenses on List 2, are there any non-essential items that you could reduce or cut out? Be realistic and don`t cut down on essentials like food and heating. Now look at your assets in List 3. Do you have any items you are willing to sell such as antiques or other valuables? Don`t rush into selling anything without making sure you will get a reasonable price and beware of selling to doorstep callers. Don`t sell essential items such as furniture. If in doubt, get independent advice before you do anything. (See useful contacts menu).

Priority bills

Some bills are priority bills and it is important to pay these first - these include :

• mortgage;

• second mortgage;

• secured loans;

• rent;

• council tax;

• water;

• gas and electricity;

• unpaid fines; and

• hire purchase.

If you rely on the telephone this should also be a priority bill.

Different creditors (the people you owe money to) are allowed to get their money back in different ways by law. Priority bills are ones where the action creditors can take against you for not paying could leave you in serious trouble. For example, if you do not pay your mortgage or secured loan your home could be repossessed, or if you fail to pay your council tax you could go to prison. But don`t panic - provided you act quickly, and either pay off all the debt or arrange with the creditor to pay it off in installments, you should be able to stop these things happening.

The important thing is not to ignore a bill you can`t pay - get in touch with the organisation you owe money to if you are having problems. If you act quickly you should be able to sort things out. These creditors can only take action against you after giving you warning and, in many cases, after long civil court proceedings.

If you aren`t sure about which bills should be top priority, or can`t find enough money to pay priority bills, get advice from one of the agencies listed in the useful contacts menu. Bear in mind that creditors who shout the loudest and bombard you with letters and phone calls may not be the most important ones. So don`t pay them before priority debts. Creditors are not allowed to cause you alarm or distress. If you think you are being harassed by a creditor, contact your local trading standards service, the police or an advice agency.

Negotiate with creditors

If you have enough money coming in to pay your important bills, together with household expenditure such as food and laundry, but do not have enough money to pay the creditors shown on List 4, then it should be possible for you to make arrangements with these creditors to pay reduced amounts. Don`t agree to a repayment plan unless you are sure that you can meet the payments. It is better to come to an arrangement to pay back small amounts which you know you can afford than agree to unrealistic repayments which you won`t be able to keep up. You can put these amounts in the payment offer column of List 4.

Summary of debt advice

If you find you have not got enough money to make ends meet, remember these basic rules :

Don`t borrow more money to pay off your debts. Get advice first from your local Citizens Advice Bureau, the National Debtline, the Consumer Credit Councilling Service or a local advice agency.

Don`t ignore the problem - it won`t go away and the longer you leave it, the worse it will get.

Do make sure you pay your priority bills and make arrangements to bring them up to date.

Do write everything down using the personal budget lists.

Do get advice from one of the agencies listed in the Useful contacts menu if you are worried or not sure what to do.