Wealth Check: 'I want to take back control of my finances'
Saturday 27 May 2006
Rebecca Weymouth, 27, has a good job in media sales working for a magazine publisher in London. But sales is a cut-throat industry that doesn't pay large salaries and Rebecca is finding it difficult to cope with the cost of living in the capital.
She has repeatedly embarked on budgeting drives but despite a frugal lifestyle, one-off demands on her purse have often blown her off course and her debt keeps increasing. She did have savings of £3,000 but this has dwindled to just £150 and she is making no contributions to a pension.
Rebecca wants advice on how to put her finances in order without taking on a second job, which seems the only option. We asked three independent financial advisers to help: Susan Hannums of Chase de Vere, Philippa Gee of Torquil Clark and Andrew Swallow of Swallow Financial Management.
Rebecca Weymouth, 27, media sales London
Salary: A little over £20,000 depending on commission. After tax, this works at out at around £1,250 a month.
Monthly spending: £700 on rent, bills and travel, £500 on other costs such as debt repayments. A total of £1,200 a month not including one-off costs such as holidays, birthdays or emergencies.
Savings: £150 in a cash individual savings account.
Debts: Personal loan of £8,000, credit card debt of £5,000, overdraft of £1,500, plus student loans of £7,000.
Pension: An occupational scheme is available at work but for now Rebecca does not feel she can spare the money to contribute to it. No other retirement savings.
Susan Hannums urges Rebecca not to panic - simply by facing up to her financial problems, she is heading in the right direction. Hannums thinks Rebecca needs to go back to the drawing board. On a spreadsheet, she needs to write down every conceivable expense over the course of a year, and subtract it from her net income before dividing it by 12 to give monthly disposable income.
Philippa Gee also has budgeting advice. She suggests Rebecca trawls through her bank statements to identify any spending on which she could cut back - gym membership fees, for example. She also wants Rebecca to note down the details of every bit of spending over the next fortnight, so she can get a good picture of where her money is actually going.
Both Gee and Hannums think there will be scope for Rebecca to reduce her outgoings - by switching to a cheaper mobile phone deal, for example, or by taking packed lunches to work. Gee recommends www.moneysavingexpert.com as an excellent source of good deals and money-saving tips.
Andrew Swallow says that while he understands Rebecca's desire to save more, there's no point until she has reduced her debts. The cost of interest on money owed outweighs the interest earned on savings.
Gee says the arrangements Rebecca has made with her debts suggest she is capable of being financially savvy. Her credit card debt is on a 0 per cent deal, so interest charges are not mounting up, and her loan, at 6.9 per cent a year, is pretty competitive too. Student loans are also more affordable, because the rate of interest is pegged to inflation.
Hannums says the one opportunity for improvement is Rebecca's bank account, though people often don't realise they can change bank even when they're overdrawn. She recommends Alliance & Leicester, which offers an interest-free overdraft for 12 months.
THE RADICAL OPTION
If better budgeting and debt management don't help Rebecca get back in control - and they will take some time to work - our advisers suggest some life-changing alternatives.
Swallow says that Rebecca needs to have a serious think about her job - whether she is happy doing it and whether its earnings potential is sufficiently attractive. He suggests her qualifications might enable her to get better-paid work.
Gee thinks Rebecca should consider moving out of London, even back to the parental home, in order to give her finances a rest.
All the advisers think Rebecca should concentrate on debt repayments to the exclusion of savings for now. But the exception to this rule is a pension. Hannums says Rebecca could spare £20 a month - if this isn't enough for her employer's scheme, she could open a low-cost stakeholder pension with a life insurer. Any contributions she can make will attract tax relief.
For a free financial check-up, write to Wealth Check, 'The Independent', 191 Marsh Wall, London E14 9RS, or e-mail firstname.lastname@example.org
Money roundup video: It's getting harder to sort out a mortgage
Women born in 1950s facing severe financial hardship over pensions could have fates changed by Ros Altmann - should she choose to help
Five Questions On: GB Energy's new tariff
Simon Read: You're guilty until proven innocent when HMRC sends in the tax credit detectives
How to start your own internet business
- 2 California man brutally beat 82-year-old Sikh grandfather he mistook for 'one of those people'
- 3 School kitchen manager 'fired from Colorado school for giving hungry students free lunches'
- 4 Amy Schumer: 'I'm 160lbs and can catch a d**k any time I want'
- 5 Isis executes three gay men by dangling them from top of 100ft building and letting go
Thousands of teenage girls enduring debilitating illnesses after routine school cancer vaccination
Migrants in Kos: Photos show real tragedy after Brits abroad complain of 'awkward' holidays
British tourists complain that impoverished boat migrants are making holidays 'awkward' in Kos
Michael Gove determined to scrap the Human Rights Act – even if Scotland retains it
Threat to scrap Human Rights Act could see UK follow Nazi example, warns UN official
Church of England 'one generation away from extinction' after dramatic loss of followers
iJobs Money & Business
£30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...
£70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...
£23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...
£13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...
Day In a Page
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.
In a row of eight detached Georgian residences, this five-bedroom home offers views of The Sound, Mount Edgcumbe and Cornwall from its impressive veranda and full-length balcony.
If you love cooking for friends this two-bedroom flat - complete with views of the iconic Battersea Power Station and an open-plan kitchen/dining area - will go down a treat.
Located above Grasmere village, this five-bedroom home is arranged over three floors and offers countryside views across Grasmere Lake towards Silver Howe.
Surrounded by the Western fells, this five-bedroom Georgian home retains many original features including panel-plastered ceilings, sash windows and fireplaces.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B, subject to change of use permissions.
A former period coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, office, kennels and an outbuilding that's currently used as a gym.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This four-bedroom detached home comes with a double carport, useful workshop, garden and two walkways that offer views of the adjacent countryside.
With space for an equestrian business, a greenhouse for growing your own veg, a wine store and a gym; this five-bedroom home has all the ingredients for a country retreat.
The decked roof terrace of this two-bedroom flat is perfect for summer drinks while large windows and ample storage space make for a light and spacious interior.
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
Surrounded by approximately 15 acres of grounds, this six-bedroom grade II-listed home has been extensively refurbished yet retains many period features.
This four-bedroom home comes with a two-bedroom cottage and commercial office, with planning to extend, in a stunning courtyard setting.
In a pretty Norfolk village, this four-bedroom family home is surrounded by landscaped gardens, with even a self-contained annex for guests.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
This five-bedroom home is arranged over three floors of a converted Victorian hospital, offering spectacular views of the Pentland Hills - only three miles from the city centre.
This four-bedroom detached home comes with grounds that span to approximately 2.5 acres, as well as two large patio areas and a double garage.
This four-bedroom cottage is a Grade II-listed town house, well-located for the thriving market town of Nailsworth.
A four-bedroom apartment on the ground floor of a stunning period property in North Yorkshire, with two kitchens and a large south-west facing garden.
This high-spec two-bedroom home is part of a smart collection of new flats at Beaufort Park and has a large decked balcony that's perfect for summer drinks.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Overlooking a golf course, this six-bedroom Edwardian detached home spans four storeys and retains many period features including the original, operational servants' bells...
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
In a Grade II-listed manor just outside of Bath, this three-bedroom home is arranged on two floors with a skylight in a vaulted roof line.
Open the living room's bi-fold wooden doors to reveal a retro-style kitchen, and a conservatory leading to a paved garden at this three-bedroom home.
A Grade II-listed, four-bedroom home, in a charming Somerset village, with a two-storey studio that could be converted into a holiday cottage
A modern four-bedroom Victorian home, within walking distance to the high street
A luxury apartment in the Gothic mansion of Wyfold Court in Kingwood, offers six bedrooms spread over three floors and a turret
This school conversion, near Stockwell Tube, oozes New York loft style. The one-bedroom flat features double height ceilings and exposed brick work
This six-bedroom Georgian home is on three floors with open fireplaces, a two-oven Aga, an annexe, and cottage gardens with outbuildings and a car barn
High Crest House covers an impressive 9384sq ft, with almost three acres of grounds including a tennis court and summer house enclosed by electric gates
A six-bedroom farmhouse with separate accommodation in converted stables. Situated in the village of Church Aston, within walking distance to the market town
A two-bedroom flat with under-heated walnut floors and bespoke built-in storage. The Tube and Clapham Common are a short stroll away