Dear Miss Lolly

I have been in debt for the last five years. I can’t stop worrying about it. The thing is, I don’t earn enough to pay it off, so I keep going into overdraft, and my debts are getting bigger. What can I do?

Terrified, Surrey

 

Dear Terrified

There’s nothing worse than lying awake at night worrying about money. But it doesn’t have to be this way if you follow my advice. Firstly you need to look at all of your outgoings to make sure you are cutting your cloth accordingly. Use the Miss Lolly budget planner to write down a detailed list of everything you spend in a month. Don’t leave anything out e.g. coffees, nights out etc. Make a copy of this document and rename is “New Budget Planner”. Now start cutting back and working out where you can save money/make more money. Keep going until the income is the same as the outgoings. Next you need to look at your debt. Make a spreadsheet that details what you owe, to which institution/person and the interest rate you are paying. Make sure you pay off the minimums off every debt and focus on getting the most expensive one paid off first by over paying. Speak to a professional to see if there is anything you can do to make your debts cheaper. Don’t forget to sign up to my newsletter to make sure you get all the latest money tips. You might also find these websites useful too –

http://www.adviceguide.org.uk/england/debt_e/debt_help_with_debt_e.htm

http://www.moneysavingexpert.com/loans/debt-help-plan

 


Dear Miss Lolly,

I’m in a bit of a weird position and I don’t know who to ask for advice – an accountant, a financial advisor, someone I don’t know?! Hopefully you can help me? Thanks am a successful woman, I earn around £71,000 and salary sacrifice my pension; childcare vouchers, but I have a car and private health benefits My husband is self employed and earns around £8,000 as he primarily does the childcare We have 2 kids under 5 I want to know what my tipping points are as I want to be at home more but can’t work out the finances I need to bring home at least 2000 per month to cover direct debits, this doesn’t cover food or travel or anything nice! so how do I find out what salary/take home pay I need and are there benefits I’m entitled to and to what point would I not be entitled to anything. What would I actually get money wise- when you hit the 40% tax bracket what does this look like in take home pay? Are there any opportunities to use my husband’s allowances – I read somewhere it was changing next year So essentially I want to know where I can get this info from so I can make an informed decision about my future with my kids. Does this make sense?

Any help, advice, or direction pointing I would be forever grateful for. Love your website too BTW! Alyson X

 

Dear Alyson.

As promised here is response to your query as promised:

1)I think that the first thing that you need to do is to do a comprehensive budget planner. Don’t forget to include ad hoc spending, holidays, Christmas, birthdays etc. You can download a template from the www.misslolly.com

2)Once you have worked out your absolute minimum that you need to live the life you want, you can then gross this up by playing around with the http://www.thesalarycalculator.co.uk/ to work out what this would be gross.

3)Here is a link that will talk you through benefits and help you to calculate what you may be entitled to at different income rates http://www.turn2us.org.uk/benefits_search.asp The one that springs to mind is that you currently don’t qualify for child benefit but if you earn less than £50,000 you are able to claim full child benefit. Between £50K & £60K you are entitled to child benefit but on a sliding scale https://www.gov.uk/child-benefit

 


Dear Miss Lolly,

I think you are going to find me to be the strangest person who has ever contacted you! I am obsessed with saving and can’t relax unless I am working out ways to cut my expenditure. I have diaries of my spending that go back decades! My (very patient) friend has told me I need to get a grip and has convinced me that perhaps if I work out how to make my money work harder for me then perhaps I can relax more and commit to finally going on the holiday my friend and I promised ourselves when we were 18 (I am not 51!!). A stressed out lady from Devon.

 

Dear Stressed Out Lady,

You are right that this is the opposite of what most people say to me. However there might be two things to overcome. The emotional side of things I am not able to help with – perhaps you should speak to your doctor? The financial side of things I can help you with. If you have been frugal for over 30 years it is likely that you are in a better situation that most. Things you can do by yourself:

  • Make sure you are using your ISA allowance each year
  • That you are shopping around for the best rates
  • If you have a pension, make sure you are in a good performing fund that suits you

Perhaps you are best to arrange a free consultation with an independent financial adviser who will be able to get things in to perspective for you. Here are some tips to help you decide who to choose:

– look at https://www.unbiased.co.uk/find-an-adviser

– don’t just see one. Meet a few, you are hopefully going to have to meet this person at least annually so you need to make sure they get you and you like them

– make sure they are independent

– understand their charges

– find out about their qualifications and experience https://www.unbiased.co.uk/ifa-qualifications