Y o u r M o n e y


Your Money


What goes around comes around S


everal generations ago borrowing money carried a heavy social stigma – to borrow was to admit to living beyond one’s means, and living on the


‘never never’ was viewed as the route to personal and financial ruin… Al Voice, Managing Director of Forces Financial reports.


Increased homeownership, the availability of credit and easy access to loans not to mention student loans, has resulted in Britons now owing more than £1,450 billion in personal debt. Unsurprisingly, the current recession has seen a reversal in popular opinion, as once again debt is public enemy number one.


Not since the early 1990s, when the last economic recession claimed its final victims, has so much debt pain been felt by so many people. Debt charities and credit industry bodies are seeing an unprecedented increase in the number of people unable to pay their bills. But this time around youngsters and homeowners are also finding themselves in trouble, as they have borrowed far more than their predecessors, without assets to fall back on should they get into difficulty. So how do you keep borrowing and expenditure under control and avoid the debt trap and the anxiety it invariably brings?


Those in the RAF face exactly the same issues as everyone else; wearing a uniform does not act as some kind of barrier against debt. Indeed there is only one protection known to man and that is WILLPOWER. So here follows some advice built on an anagram of that very word.


When borrowing money always ensure you can afford the repayments. Start saving the equivalent amount for at least three months before taking out a loan.


Increases in pay. Have the discipline to automatically save 10% of every increase.


Learn to budget, and stick to the amounts you have allocated to each area of expenditure. Debt counsellors constantly highlight that


www.raf-ff.org.uk


people often did not see the problems mounting.


Leave the decision until tomorrow. Never buy on impulse; it can seriously damage your health.


Plan your finances effectively. Holiday money can be accumulated before you go, rather than finding yourself in debt when you get back.


Overheating. Borrowing out of control? Warning signs include a credit card balance permanently stuck at 25% of annual income, and total unsecured loans of more than 75% of income.


When making any substantial purchases shop around and negotiate. The web has certainly made this easier and the current recession has increased traders’ willingness to bargain.


Evil according to the Bible is gambling. If you can’t resist at least stick to a pre- determined amount.


Repay loans and debts before you start saving, and make the most of interest free periods on credit cards, usually 56 days, to manage regular spending but remember to pay off the card in full each month. Cards with special features are worth considering for the savings they can make in certain areas.


And remember, only choose friends and partners you can afford. If you only earn beer money a champagne partner will cause you problems. So don’t be seduced, have plenty of willpower and take cold showers!


Before you give yourself a pat on the back for your ability to stay out of trouble, check that the world shares the same opinion of you by looking up your credit report. Your credit report is not only a record of your personal financial history, but is the key to your financial future, so check it regularly. Here some sound reasons to keep your credit report in check:


Applying for a credit Lenders use the information in your credit report, alongside the data on your application form.


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You’ve been refused credit The credit history of someone you share an account with can also affect your chances, as can whether you are registered to vote or not as lenders use this information as a precaution against fraud to check that you are who you say your are, and live at the address you have given.


You’re concerned about identity theft By checking your credit report regularly you’ll see if there is anything wrong, such as a loan you don’t know about or an application for credit that you haven’t made, and can stop the fraudster before they get any further.


Make sure the information held on your report is accurate If you disagree with anything on your credit report, or think it needs explaining, you can set the record straight. For example, if illness caused you to miss a loan payment but this has never happened before or since, you can add a note explaining the circumstances.


So there we are, hopefully most of you are used to applying WILLPOWER, and remember however bleak the outlook world economies, and with them your own financial situation, will recover given prudence and time. But in the meantime it might just be wise to remain an employee of the Crown whilst it remains an option!


For further information on Forces Financial go to: www.forcesfinancial.com 


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