the meaning of money meaning of...money does not just signify spending power. in contemporary...

a Lemos&Crane report and workbook

Lemos&Crane

Letterhead1:Lemos&Crane 9/1/08 13:27

The Meaning of Money:why homeless and vulnerable peoplesee money as a route to security,respect and freedom

2

First published in Great Britain in 2010 by

Lemos&Crane

64 Highgate High Street, London N6 5HX

Tel 020 8348 8263

www.lemosandcrane.co.uk

© Lemos&Crane, 2010

Funded by the Esmée Fairbairn Foundation

Design by Tom Keates-Miles, Mick Keates Design

Acknowledgements

Thanks to the Esmée Fairbairn Foundation for financially

supporting this work, and in particular thanks to

Nicola Pollock, a long time supporter of our work at

Lemos&Crane. At Lemos&Crane we have a longstanding

partnership with Thames Reach and my particular

thanks to Audrey Mitchell who has been an involved

and insightful supporter of the project. James Birkett

did a first class job in bringing everyone together and

managing the whole process. We owe him an enormous

debt of gratitude. We would like to thank all the support

workers who participated in our meetings and conducted

the interviews which are quoted in this report: Romoke

Afolabi, Janice Barrie, Mesorina Beqiri, Ayshen Cagliyan,

Helen Donoghue, Matthew Findlay, Karl Hind, Jennifer

Nelson, Eliza Newell, Phil Peacock, Lorraine Roberts. At

Lemos&Crane much of the research and all the analysis

was done by Naomi Fathers and Francis Bacon; thanks,

as always, to them. Our biggest vote of thanks is owed

to the service users who gave so generously of their time

and insight in the interviews. The respondents are quoted

anonymously. The opinions and conclusions are, of

course, my own – as is responsibility for any errors.

Gerard Lemos

Lemos&Crane

January 2010

Contents

3

5. Using money to meet aspirations 42

Modest, everyday wishes for

security and permanence 42

Less money might make

people look for a job 43

Managing money for personal achievements 44

Desire for gadgets 45

More money to improve family relationships 45

Aspiring to property ownership 46

Long-term financial goals 46

6. Conclusions 48

Recommendations for support workers 49

Workbook 52

1. Attitude to money 53

2. Budgeting and spending 56

3. Banking and saving 60

4. Borrowing and debt 63

5. Looking to the future 66

Acknowledgements 2

Executive summary 4

Introduction 7

1. Attitudes, experiences and behaviour towards money 12

Acceptance of not having much money 12

Hostility to money 13

‘Just getting by’ 15

Coping well for now 19

Overcoming problems in the past 20

Shopping around and getting a good deal 21

Impulsive expenditure 22

Mixed blessings of family and friends 22

Some are reluctant to ask for

the return of their loans. 25

2. Factors leading to financial problems now and in the past 26

Problems with benefits administration 26

Family conflict 26

Mental health 27

Alcohol and drugs 28

Exploitation of vulnerable people 29

3. The importance of savings 31

Saving for a ‘rainy day’ 33

A desire to save 34

‘Living for today’ 35

4. Experience of borrowing and debts 36

Debt 37

4

Support workers for homeless and vulnerable people help with sorting out benefits

and budgeting. The government has emphasized the need to also improve financial

inclusion and financial capability. This is particularly important for people on low and

no incomes with little experience of financial products. Using financial products is

more difficult for people with few financial skills and is made more difficult for those

uncomfortable with automated, internet and telephone banking. Money does not just

signify spending power. In contemporary society it also signifies security, status and

respect. Wealth is now more important than tradition or family in defining social status.

Money is not the ‘root of all evil’. It is the way to change how other people see you -

and how you see yourself.

Little research has been conducted on the attitudes towards money of homeless or

vulnerable people, nor about their behaviour in handling money and this research seeks

to begin to fill that gap. The stereotype of ex-homeless people as people with feckless

and unstable attitudes and lifestyles, spendthrift ways and prone to bad behavior in bad

company is grossly inaccurate.

Research method

The questionnaire used as a research instrument was drawn up in consultation with

a group of 14 support workers. Interviews were conducted with 63 service users who

were a range of ages, both men and women and with a range of personal histories,

including homelessness, mental health problems, drugs and alcohol problems,

relationship breakdowns and family conflict.

Attitudes, experiences and behaviour towards money

Some respondents were fatalistic and accepted not having much money. This had

been their situation for a long time and seemed likely to remain so. A few respondents

were hostile to money and very negative about banks. A substantial proportion of

respondents described themselves as ‘just getting by’ and displayed responsible

attitudes to money. Some respondents said they were coping well and some of those

were overcoming financial problems in the past. Others actively sort out good deals on

the internet and in shops to make their resources go further. A few could not restrain

themselves from impulsive expenditure. For many family and friends were mixed

blessings. They were a source of financial support when needed, but also a source of

demands for help, sometimes unreasonable demands. Most respondents felt a strong

obligation to help out family and friends, so that they could earn their respect as well as

being able to rely on their support in the future.

Executive summary

5

Factors leading to financial problems now and in the past

The factors that had tended to lead to financial problems in the past and a legacy of

debts in the present were problems with benefits administration, family conflict, mental

health problems, drugs and alcohol. Some vulnerable people had apparently been

financially exploited.

The importance of savings

Most respondents recognized the importance of saving for a ‘rainy day’. Many had

saved some money, even though they were on benefits. In general for those who had

savings they were between £100 and £1000. Some had even saved money while

sleeping rough. Almost everyone expressed a desire to save. Some people said they

were ‘living for today’: they were just not the type to save money.

Borrowing and debts

Some respondents had had problems with debts. Some still had them. These were

connected to drug use and conflict in relationships and families. Most of those in debt

had debts of less than £1000. Problems with debts in the past or currently had made

people reluctant to borrow responsibly through bank lending products.

Using money to meet aspirations

Many respondents were keen to save money to meet short terms goals of comfort or

homeliness: new clothes, furniture or electronic gadgets. A substantial proportion of

residents wanted to earn more and save more to meet life ambitions and aspirations,

many of which involved establishing more frequent, lasting and intimate contact with

family members. Their lack of money made it difficult for them to hold their own as

equals in family relationships and they wanted to be able to help others. Some people

said that if their benefits were reduced they would more actively seek work. Some

aspired to home ownership. A few had long term plans to open businesses or establish

funds for a pension.

Executive summary Executive summary

6

Conclusions

The stereotype of ex-homeless people as people with feckless and unstable attitudes

and lifestyles, spendthrift ways and prone to bad behaviour in bad company is grossly

inaccurate. By no means everyone had financial problems now or in the past. Most

people were coping reasonably well on low incomes and trying hard not just to make

ends meet but also to save for a rainy day, to offer some help to family and friends

and to save money to improve their own quality and life and to meet their long-term

aspirations. Money was not seen as a problem but instead as an opportunity which

signified the hope of greater security, more respect for yourself and from others, better

relationships, the possibility of achieving cherished aspirations and, above all, a sense

of freedom. How then can support workers engage with service users in a discussion

about money where it is seen not so much as a problem but as an opportunity?

Workbook

The workbook provides a set of structured sections on money management themes,

derived from the research methods and findings in the report, which can be used in

five or more keyworking sessions with service users.

Executive summary

7

Introduction

Background

Assistance given by staff in supported housing on money and financial matters is

traditionally, and perhaps still generally, confined to sorting out access to, and problems

with, welfare and housing benefits and identifying problems with debt. Longstanding

or intractable debt difficulties that cannot be dealt with by the person themselves or

their support worker is referred to a specialist agency for more in-depth debt advice. In

recent times, however, the government has promoted a wider discussion of financial

inclusion and financial capability. Financial inclusion can be defined as having the ability

to manage money, plan for the future and deal with financial distress. This implies both

having the knowledge and skills to deal with money - often referred to as ‘financial

capability’ - and having access to financial products.

The Financial Services Authority (FSA) states that financial capability

consists of four domains:

• managingmoney:abilityto‘makeendsmeet’andkeeptrackoffinances

• planningahead:abilitytodealwithsizeablefinancial

commitmentsinthefuture

• choosingproducts:abilitytoselectandpurchase

appropriatefinancialproducts

• stayinginformed:abilitytokeepabreastofchangestoproducts

andtheeconomy.

Only a minority of all people, not just vulnerable people, according to research

commissioned by the FSA, could reasonably be considered ‘capable’ in all four

domains. Since homeless and vulnerable people are likely to be on low or no incomes

and therefore positive experiences of financial services are likely to be limited, financial

inclusion and capability are even more important for this group of people than for

the population at large. This recent emphasis on financial inclusion and capability

suggests that staff supporting vulnerable people need to go beyond the basics of

sorting out benefits and debt advice and, in addition to these minimal requirements,

build the confidence of service users about their understanding of financial products

and managing money for the longer term. Building confidence about the use of

financial products is made more demanding nowadays because so much of the way

banking is now conducted is automated and relies on a facility with technology and an

ability to manage your own affairs without face-to-face personal support. Call centres

are a challenge to us all but especially so for those who have not yet acquired the

attributes of patience and determination while waiting to be answered on the one hand

and achieving sudden, quick resolutions of your query when you finally get to talk

to a human being on the other hand. This is counter-intuitive behaviour to which the

Executive summary

8

Introduction

evolution of the human brain has yet to adapt and so one has no alternative but to learn

a little and cope as best one can. These particular life management skills of handing

internet and telephone banking are not on the traditional template for independent living

skills to be inculcated in vulnerable people, but they certainly are independent living

skills now. The widespread adoption of automated banking has raised the threshold of

financial exclusion beyond understanding and using financial products and the effect

has been to leave out people who may or may not understand money and financial

products, but nevertheless struggle with technology. The very old are the worst affected

and therefore most frequently represented among the unbanked. The worry is that the

financially excluded who are very old are never included; they just die of old age.

Even beyond the importance of understanding banking in a technological age there

are yet further reasons why money is more important now than it was in the past

for socially excluded people. In the UK since the 1980s traditional social structures

of class and birth have been undermined by a more meritocratic social order but

greater meritocracy has not been accompanied by greater equality, rather in fact the

opposite. So the old codes for social position (accent, schooling, parents and so on)

no longer have the same social resonance, though they are by no means extinct. Over

and above the old order a new order of merit has been installed. Merit is now seen to

derive from talent and effort (particularly in education) not from birth or privilege and

the visible, tangible manifestation of people with merit is that they are seen to have

money. So for those people without a home or a job or a place in the world, they have

not only lost the benefits of a life free from worry, they have also become decoupled

from an entitlement to the acknowledgement and respect that is shown to those who

have ‘made it’. That wider depredation of loss of status and respect could be more

psychologically damaging for some people than the more practical issues of having

neither a home nor a job.

In contemporary society having money is seen as having a wider meaning beyond

simply spending power. Firstly, a reliable income is the passport to security – a life

free from worry. Secondly, having even more money is a signifier of status: of your

place in the social pecking order. And, thirdly, most important of all, money is seen as

a signifier of freedom: because you have money you can make choices about what

you want to do; how you want to live; almost, in a way, who you want to be. As far as

vulnerable service users are concerned security, status and freedom are precisely

the things that, for one reason and another, life has denied them. Being unemployed

and homeless may be the manifestations but the underlying situation is, as noted, the

absence of security, status and freedom. This contemporary social context in which

9

Introduction

money plays such a large part and has such a special meaning suggests that, even

beyond knowledge and use of financial products, support workers need to have a

wider discussion with service users linking their ambitions and aspirations, their search

for a place in the world, with finance and money, not just flats, benefits and jobs. To

encourage people to cleave to the belief that money is the root of all evil, a view widely

espoused but not in reality much believed, is, in effect, to collude in their acceptance of

their place at the bottom of the pile.

Little research has been conducted on the attitudes towards money of homeless or

vulnerable people, nor about their behaviour in handling money and this research

seeks to begin to fill that gap. The assumption seems to be that vulnerable people

don’t have much money and are unlikely to get much more so there is no need to help

them manage money better or to make financial plans for their future. The findings from

this research challenge these assumptions. Despite an absence of reliable research

unreliable assumptions and stereotypes abound; they are virtually all negative.

Purpose of this research

The research objectives were to:

• gainfirsthandinsightfromhomelessandvulnerablepeopleabouttheir

experiencesofmanagingmoneyandfinancialplanning

• developaframeworktobetterunderstandhowvulnerablepeoplethink

aboutmoney,whattheirconcernsareandhowbesttheycanbeaddressed.

• considerwhethersupportbeingofferedcurrentlyonfinancial

matterscouldbeimproved.

• deviseactivitiesthatpractitionerscanuseaspartoftheirworktohelp

homelessandvulnerablepeopleinactionplanningtomanagemoneybetter,

preventfinancialcrises,createstabilityandbuildupthefinancialresources

toachievepersonalplansandaspirationsandtorecoverconfidenceand

self-respect.

• homelessandvulnerablepeopleinactionplanningtomanagemoneybetter,

preventfinancialcrises,createstabilityandbuildupthefinancialresources

toachievepersonalplansandaspirationsandtorecoverconfidenceand

self-respect.

10

Introduction

Research methods

Support workers from Thames Reach were invited to attend a series of three meetings

over five months. At the first meeting support workers discussed their own views about

money and its uses and abuses. In discussion these views proved extremely varied

and gave rise to the suspicion that approaches to supporting service users depended

mostly on the diverse attitudes and values of individual support workers who were

operating in the absence of any explicit organisational expectations or standards.

Following these discussions about their own values and recognising how diverse those

attitudes were, the support workers participating in the research went on to discuss the

content and structure of a questionnaire that could be used with service users about

their views on and experiences with money. In research meetings it was possible to

explore the varied attitudes of diverse group of staff working in very different settings

with a range of clients. These discussions influenced recommendations on policies,

procedures and staff training, particularly the need for a consistent approach to working

with clients on financial matters including day-to-day financial management, spending,

saving, borrowing and planning for the future.

Fourteen support workers participated in facilitated open and informal discussion.

Impromptu conversations in research meetings enabled the group to explore in more

depth points that may otherwise have been overlooked. These discussions were

invaluable in devising relevant, in-depth research instrument expressed in accessible

language. Familiar and trusted support workers assisted service users to complete

questionnaires with the intention that fuller and more open responses would be given

by comparison to those that would be elicited by unknown researchers. Researchers

at Lemos&Crane then developed the themes from that discussion into a research

instrument: a questionnaire for service users. This has been subsequently developed

into the Workbook, which follows the report. Fourteen support workers then approached

about eight clients each. In total 63 service users completed questionnaires.

11

Introduction

Since some of the questions on the survey required reflection and some personal

disclosures service users were also free, if they wished, to complete the questionnaires

in their own time and in private. Some participants were also involved in peer research.

They explained the purpose of the questionnaires to other service users and provided

help where that was needed.

These are not a representative sample of service users and not meant to be reflective

or typical of service users’ attitudes more generally. Nevertheless the respondents

included people from a range of ethnic backgrounds, both men and women and

people from 19 years old to people over 60. Many different histories and experiences of

homelessness and vulnerability are also represented among the respondents including

being a refugee, mental health problems, being a young single parent, alcohol and

drugs, relationship breakdown and long-term street homelessness. The respondents

are quoted anonymously. When available the respondent’s gender and age are given.

If they are not mentioned, this information was not stated by the respondent.

The responses to these questionnaires were then analysed thematically by researchers

at Lemos&Crane. The main findings are set out in the chapters below. These findings

were discussed at the second research meeting. At the final research meeting, the

approach to this report and conclusions arising from it were discussed. Conclusions

are set out in chapter 6.

12

1. Attitudes, experiences and behaviour towards money

Problems with money and debt are closely interwoven with experiences of

homelessness, unemployment and other aspects of vulnerability. Working lives have

been disrupted by housing and other problems and many homeless people have been

living on housing and welfare benefits for many years. Some have never really had a

stable job. Problems with drugs, alcohol, gambling or mental health can exacerbate

financial difficulties. Relationship breakdown may also have contributed to financial

difficulties. All the respondents are, of course, on low or no incomes. They nevertheless

expressed a wide divergence of views, a range of attitudes and had had many different

experiences. Set out in this section are the range of different responses organised

thematically.

Acceptance of not having much money

Many of the respondents had complex personal histories and all had experienced

homelessness. Few had ever been well off and unsurprisingly some did not therefore

attach a great deal of importance to money. The comments that follow exemplify this

attitude of fatalistic acceptance towards not having much money.

‘I have found that over the years most of my happiest experiences have

been when I have had very little money’ (male, 45)

“I sometimes prefer to be skint.”

(male, 35)

The importance of other aspects of life and the relatively lower significance

of money was also stressed by some respondents, for example:

‘Money is important, but there’s more to life than money.’

(male, 45)

Money came second or third, in some people’s view, after more

important things like health.

‘Money is a good thing but health and strength

is also very important.’

“““

13


Feeling secure from day-to-day is a benefit of having money, but having achieved that

security, wanting much more money than that might for some be unrealistic: they might

hope for more money but not really expect it.

‘My attitude is if you’ve got it, you’ve got it, if you haven’t, you haven’t.

The important thing is food on the table and the roof over my head.’

(male, 48)

Few people, surprisingly, said they were short of money (or broke or feeling the pinch)

even though they were living on low incomes. This respondent, however, noted that not

having enough money was an obstruction to achieving their goals.

‘I would love to have more money. I know it wouldn’t solve all my problems,

but it would make things better. I wouldn’t be stuck here in this flat in

this situation. I’d have more choice about where I lived. I’d have more

choice in life.’

Hostility to money

Some respondents expressed outright hostility to money, seeing it as a negative force.

‘The love of money is the root of all evil.’

(male)

As well as hostile attitudes to money, the comment below expresses hostile

views about banks.

‘Banks are robbers and they deserve to be broke. Money is not the

be all and end all in life, but it has become this in the modern world.’

(male, 47)

These views however were not necessarily typical. Although they may not have high

ambitions many homeless and vulnerable people are not indifferent to money, nor are

they content to live a menial life on minimal funds as show in the responses analysed in

the table below.

““

““

14

Figure 1 shows respondents’ attitudes to statements about managing money. It

shows that the largest single group of respondents were ones who wanted to have

a little money saved. Unconcerned or relaxed attitudes to money, by contrast, were

less common.

Fig 1: Level of agreement to attitudinal statements about money


I get

mor

e m

oney

than

I ne

edor

kno

w w

hat t

o do

with

I am

alw

ays

in d

ebt,

but I

don

’t ca

re

I’d li

ke to

be

able

to b

orro

w s

ome

mon

eyto

buy

thin

gs I

wan

t bec

ause

I kn

owI c

ould

pay

the

mon

ey b

ack

I don

’t re

ally

kno

w w

hat’s

goin

g on

with

my

finan

ces

I’ve

got a

s m

uch

mon

ey a

s I n

eed

I am

in d

ebt a

nd I’

mre

ally

wor

ried

abou

t it

I’m in

deb

t, bu

t the

sit

uatio

n is

unde

r con

trol

I’d li

ke to

hav

e m

ore

mon

ey s

o I c

ould

give

som

e of

it to

my

fam

ily a

nd fr

iend

s

Savi

ng m

oney

mak

es m

efe

el m

ore

inde

pend

ent

I wou

ld li

ke to

hav

e m

ore

mon

ey a

nd I’

vego

t lot

s of

idea

s of

wha

t I w

ould

do

with

it

I’d li

ke to

hav

e a

bit o

f mon

eyto

put

aw

ay fo

r a ra

iny

day

Disagree

Neither agreeor disagree

Agree

15

‘Just getting by’

Many respondents are living on benefits and the phrase ‘just getting by’ was often

used. As the quotes below illustrate the phrase ‘just getting by’ tends to show that

people are not in financial trouble but they are also not feeling secure in the short

term, or very positive about their longer term financial future. Being on benefits –

and the likelihood of remaining on benefits - does not give them much room for

manoeuvre. Financial limitations mean there are few opportunities to do anything more

than the basics.

‘Being that I’m on benefit and have been for a number of years I try to be

organised, but no way can you save. Basically you just get by….I do the

best I can mainly by juggling bills with shopping.’

Not having much money is one problem. Not feeling very confident about how to

manage it is another, particularly following on from bad financial experiences in the

past.

‘I’m just getting by, I’m not good with money and find I can’t save. Money

slips through my fingers. [I’ve managed money most successfully] when

I’ve been at work and paying little or no rent. I’ve worked in the past and

saved my money, but then I’ve been out of work and on benefits and

my finances go out of control….I wouldn’t be able to survive at all if the

government stopped my benefits.’

(male, 47)

This respondent finds it difficult to cope alone with responsibilities that were previously

shared when he was married.

‘I am a person who just gets by. Through my adult life I have not been good

with money. It was most in control when I was married, got on with a good

routine, mainly because my wife was good with money. I have not been able

to save when buying things. When I first started living on my [I] found it very

difficult to cope. Now I am faced with the possibility of bankruptcy as I’ve

got a lot of debt.’

(male, 45)



““

“

16

Facing new responsibilities and new pressures meant that for this

young woman things were a struggle.

‘I’m just getting by, however I would like to save. I have moved to my

flat recently and this is an experience, as I never had to save before.

The responsibility of living on my own and being responsible for money is a

new experience. I am not in control of finances.’

(female, 19)

This respondent could do no more than just get by because drug and

alcohol dependency were still a problem.

‘I just get by living in the day. I can’t save money. It burns a hole in my

pocket. I spend my money on debts, bills and the rest goes on drugs and

alcohol. I have not much control over this.’

For some people the phrase ‘just getting by’ describes an improvement; a recovery

from personal problems or trauma in the past.

‘I’m just getting by. [I managed money most successfully] when I

was a teenager to mid-twenties and when I was in a relationship

with my son’s mother … this was prior to heavy depression…due to

relationship difficulties.’

(male, 45)

Getting by can be particularly hard for young people. The same young

woman quoted above went on to say:

‘I am not in control of finances. I am in debt currently. This is the worst

point re finance as I live on £46 a week, paying bills with that amount is

impossible. That’s why I’m in debt, mobile phone debt, water bill and credit

card bill. I [am] living off the credit card, that is what I am doing now as my

situation re finance is dire.’ (female, 19)


““““

17

People who are getting by well enough most of the time can temporarily lose their self-

control. The consequences can be a painful financial hangover.

‘I am careful with money on the one hand, a penny pincher. But sometimes

I throw caution to the wind and spend liberally. At the moment I am getting

by. A decision I have had to make and hated is to take out a crisis loan from

social security. My standard of living dropping is unimaginable. It would

adversely affect me. I cannot say how I would react but I would be bitter.’

(male, 42)

Those who might feel they are coping well and behaving responsibly may in reality be to

some extent deluding themselves. This respondent describes himself as ‘responsible’

but his behaviour does not seem to justify that self-perception and may provoke

scepticism in others.

‘I’d say I’m responsible. I’m a big spender and I’m just getting by. I spend a

lot of money on alcohol and tobacco. I don’t have much left over for other

things. During the 1980s I had a job. I was more responsible with money

then. I kept saving and didn’t spend much.’ (male, 47)

When asked what they would do if they had less money some people express

remarkable equanimity about that prospect. They know they can be resilient because

they have had to be resilient before, as in the case of this respondent.

‘I am pretty organised and save for what I need. I don’t like being in debt

at all. I’ve had less money than I have now and coped reasonably well. I

made sure I could eat. I got washed in British Rail bathrooms so I could

keep myself clean – also used a police station to wash when I was street

homeless.’


“

“

“

18

Figure 2 shows that the largest single group of respondents were keen to live within

their means but found it difficult to think too far into the future about their finances.

Living on benefits or low incomes meant that people had financially to live on short time

horizons.

Fig 2: Attitudes to spending


I pre

fer t

o bu

y th

ings

on

cred

itra

ther

than

wai

t and

sav

e up

I alw

ays

mak

e su

re I

have

mon

ey s

aved

for a

rain

y da

y

I ten

d to

live

for t

oday

and

let t

omor

row

take

car

e of

itse

lf

I fin

d it

mor

e sa

tisfy

ing

to s

pend

mon

ey th

an to

sav

e it

for t

he lo

ng te

rm

I am

ver

y or

gani

sed

whe

n it

com

esto

man

agin

g m

oney

day

to d

ay

If I h

ad to

cho

ose,

I w

ould

rath

er h

ave

a go

odsta

ndar

d of

livi

ng th

an s

ave

for r

etire

men

t

I wou

ld ra

ther

cut

bac

k th

an p

ut e

very

day

spen

ding

on

a cr

edit

card

I co

uldn

’t re

pay

in fu

ll ea

ch m

onth

Disagree

Neither agreeor disagree

Agree

19

Coping well for now

Contrary to negative and pejorative stereotypes (such as drug dependent, gambling,

drinking, unemployed and indebted) some homeless or vulnerable people manage their

money independently and effectively. Some even saved money from their low incomes,

though they did not always use the most beneficial financial products to maximise the

return on their savings.

‘I am quite good at managing my money. Bills are paid first then I spend

what’s left. About ten years ago I was able to pay my way and save money.

When I was in a hostel, I had very little money and a drink problem.’

(male, 40)

‘When I was on the streets I saved some money even then. I didn’t spend

it all. I bought my friends drinks. I always had drink and fags and never ran

out…Now I’ve got so much saved I don’t know what to do with it. [If I had

less money] I’d make it last. It wouldn’t be a problem.’ (female, 38)

‘I’m not a big spender. I don’t buy a lot of things. I try not to save but I do

have a lot of money. I keep a certain amount of money back…. I always

pay my service charge each week. I keep the money needed to pay the

service charge on my flat separate so I don’t spend it. I don’t like paying

the service charge and would prefer to live somewhere that didn’t have a

service charge. I think it’s too much. I pay it because I don’t want to lose

my accommodation. I’ve always had some money left over. I’ve always

been able to buy the thing I need without running out. There’s never been a

time when I managed money better or worse. I’ve never had debts or owed

money to anyone. Everyone has times when money’s a problem.’ (male, 49)


“

20

Overcoming problems in the past

Some people who now felt themselves to be in control of their finances

had suffered financial problems in the past.

‘I think I’m well-organised with my money. I calculate how much I need to

spend and see if I can save the rest. Generally I might have a bit to save but

not much - and sometimes not at all. I just about get by with my benefits.

I know I’ve never had enough money, but I don’t worry about it. I’ve never

had enough money to be able to save in advance. I always have to wait until

I identify that I need something and will then start saving for it. For example

if something breaks I don’t have money ready saved up, I have to start

saving once it’s broken. Quite a few years ago now I had to sell some of

my gold to the pawn shop in order to get money I needed. This was before

I was on my disability benefits, so I had a lot less money. I then bought my

gold back once

I had the money to.’

‘I’m organised. My granddad said if you always look like you’ve got money

or make-believe you have it, then you’ll always have money. When I worked

I spent a lot of money, mainly in the pub. I was never really a saver. I think

about money a lot more now and budget well. I have a little pot to put some

away. I can save while buying all the things I need. I’ve been a saver ever

since I’ve been with Thames Reach. I owed money to Kays catalogue when I

was living in a hostel. Paying it back left me broke.’ (male, 57)

Debts had been so serious in some cases that they had led to a threat of bankruptcy.

‘I am organised with my money – although I do like to spend. I have been

able to save while buying all that I need to. If I have wanted to travel, I have

saved for it and lived my life also. [I have difficulty managing money] when

a friend or the family is in need more than myself. I have faced bankruptcy

whenI was in debt about 5 years ago but I’ve cleared everything. I don’t

believe in loans. I have tried to invest money over 10 years ago, but lost

trust in the business. [If I had more money] I would travel to Jamaica and

other places where my good friends are abroad.’ (male, 41)


“

“

21

The manner in which some people coped well with money was unconventional but

involved crime. One respondent had learnt money management when dealing drugs.

In response to the question ‘when would you say you’ve managed money most

successfully?’ this respondent said,

‘I was a professional criminal …dealing drugs and had large sums of money

available. I had to make sure capital was retained and only profits spent.

My business and livelihood depended on good financial management.

Personal and business money was basically the same thing at that time.’

Shopping around and getting a good deal

As well as coping well, some people actively managed their finances by comparing

prices before buying. Perhaps getting a good deal was more important because they

did not have much money to play around with or waste, so many respondents were

careful to shop around for the best deal.

‘It’s very important [to get the best deal]. I want products that are tailored to

my needs and offer value for money. I reflect on what the services offer me.’

(male, 25)

‘It is very important for me to find the best deal when it comes to anything

that I have to buy, but sometimes it is very difficult to decide if you have

difficulty understanding the conditions.’ (female, 34)

‘I’m always careful and look around for the best bargains and

value for money.’


“

““

22

Websites were used by some to ensure they get value for money and the

best deal available.

‘I shop a lot on eBay for the best deals.’ (male, 48)

‘I shopped around for at least 3 weeks for my TV – via internet

and the high street.’ (male, 25)

Impulsive expenditure

Others were too impulsive and impatient to shop around and regretted that.

‘I’m impulsive and tend to take up offers from junk mail because I have an

idea and want to do it as quickly as possible. I’m really trying to change

this now.’

‘Shopping around is important to me but sometimes I am impatient and buy

on impulse but mainly I shop around.’ (male,42)

Long periods of homelessness certainly did not make it easier to become a good

manager of money, as this person comments.

‘I’m money-wise now but I had to learn after 30 years on the street.’

(male, 60)

Mixed blessings of family and friends

When faced with financial difficulties – or any serious difficulties – almost everyone

turns first to family and, failing that, friends. The problem for some homeless and

vulnerable people is that their turbulent, chaotic lives mean they are no longer in touch

with family and old friends. Instead they rely on newer friends who may seem intimates

for the moment but intimacy takes time to grow, not intense short experiences or

sudden surprising disclosures.

So, in the absence of these more longstanding, secure and intimate relationships, when

in need of help, homeless or vulnerable people can find themselves relying on people

who are less trustworthy than they think they are. Conversely having funds available to


“

“

“

23

support family and friends is an important motivation to manage your own money well

and to make sure to have some money put aside, not just for yourself but in case any

of your nearest and dearest need it too. Everyone feels the obligation to help those that

might be called upon to help them.

Family and friends, however, can also exert unwanted emotional pressure by

unreasonably demanding assistance obliging those without much means to give more

help than they can truly afford, at some cost to themselves. At the extreme this can turn

into exploitation. Family ties and helping family members are important incentives to

manage money properly. Demands from family members and friends may, however,

also create unwanted pressure for those who have even a little money.

‘When I was working I feel like I managed [money] better because I was

more involved – filled out paperwork myself etc….When I was working I

decided to help my mum and sister to go on holiday to Cornwall and to buy

their council house, by giving them money, though unfortunately mother’s

death prevented this happening. [If I had more money] I wouldn’t spend

it on myself. I’d make gifts to the RSPB and other wildlife trusts. If I had

enough money after making donations I’d travel to places I loved when I

was younger.’

As with the general public, family and friends are the first port of call for borrowing

money to tide over difficulties or to deal with crises.

‘I borrow from parents but insist on paying back.’(male, 42)

‘I borrow money off friends and this helps me to get by. I always pay the

money back but it can leave me short when I get paid.’ (male, 39)

‘I feel alright about it and often borrow from people I know.’ (male, 47)

The trust in the relationship makes the borrowing feel safer and also creates a moral

obligation to pay back, rather than a contractual requirement.

‘I feel guilty when I borrow money from my mother because I can’t pay it

back. I don’t mind lending money to friends even though I don’t get it back.’

‘I borrowed from my brother. I have the money now but I am not able to find

my brother to pay him back.’ (male, 42)


“

“

“

24

‘I borrow money from my mum and I pay back the same week. I will lend

money depending on whom.’ (male, 35)

‘ I’ve no problem with [borrowing from friends and family] I only borrow

from people I have a long term relationship with. They know if repayment is

delayed, it’s still coming. We trust each other.’

‘I’d only ask a true friend if I really had no choice. I don’t like doing [it] but

have on a few occasions. There’s no problem with any attitude from me or

the person lending me the money, as it gets paid back straight away. No one

asks to borrow from me as I have nothing.’

Borrowing from friends or family is seen by many respondents as preferable to

borrowing from banks or financial institutions.

[Borrowing from family and friends] ‘is easier than borrowing from institutions though it

must be from someone I’ve known for years. I always agree a day for repayment when

I know I’ll have the money.’

‘I do not like borrowing from banks. When I was gambling I sometimes used

to borrow money from friends but I felt uncomfortable.’ (male, 51)

Borrowing from friends or family generally does not involve paying interest and that is

obviously an advantage.

‘I would rather borrow money from friends than banks because I don’t

need to meet the deadline and I don’t need to pay interest.’ (female, 34)

Several respondents said that they lent money to friends and family,

‘I’m happy to loan to anyone if I can spare it. I used to happily give

money to people when I had loads.’

Getting the money paid back had caused difficulties in some instances.

‘Some people take longer to pay back than others. I have borrowed in the

past and [this] has caused friction. I’m still in touch with those people now

though. I do lend to people still but I’m more cautious now because in the

past people haven’t repaid me.’

““““


25

‘I lent a large amount of money to someone a few years ago. He never paid

me back and never will. I think that taught me not to lend large amounts.

I don’t borrow money from other people. I don’t know if I’d lend someone

a small amount of money.’ (male, 49)

Some are reluctant to ask for the return of their loans.

‘I’ll lend money to friends but depends on who it is. I don’t like asking them

for it back because they never do.’ (male, 45)

Others simply never had any money to lend or refused to lend

‘People rarely ask me if I can lend money. I’m always

the one with no money.’

‘If people want to borrow money off me I say No.’

‘When I’m asked for money I tell people I don’t have it.

My family comes first.’ (male)

People who have been homeless have mostly also been unemployed and have had to

learn to live on limited means, restricted often to welfare benefits. Within these general

and widely applicable constraints attitudes and behaviour vary greatly. Some attitudes

to money are borne of having limited means; others are echoes of problems in the past:

relationship breakdown; problems with drugs and alcohol. The present manifestation

of these past problems is an overhang of debt. Managing that debt and seeking to

pay it off out of welfare benefits adds to the feeling of choices being constrained and

hopes being curtailed. Nevertheless whatever past traumas have been experienced and

present problems are being coped with, vulnerable people have no alternative but to be

resourceful and resilient in handling their money. They live within their restricted means

– ‘just getting by’ as so many said – and manage to find good buys to improve their

quality of life as well as setting a little aside to help others and a little for their own future.

Whatever the constraints of past experiences and limited financial resources, there are

strong socially accepted norms to see money as more than a means to everyday ends,

like food, clothes, household items and accommodation. Money is seen as and (as

sociologists would say) coded for setting, and limiting, your own future goals, helping

others in order to create ties and bonds to the rest of society and living a life that is

greater than the sum of the parts: living a life that amounts to more than being free

of worry. Security is not the only goal. Having money and managing it properly is the

cornerstone of the contemporary good life - the life of possibility.

““


26

2. Factors leading to financial problems now and in the past

Although many service users have not had financial difficulties, problems with debt

(either in the past or currently) are disproportionate features of the lives of homeless

and vulnerable people. These problems have generally derived from an individual’s

first relationships that have gone sour; irresponsible behaviour, for example, with drugs

or alcohol; mental health problems; conflicts in relationships with friends and families

and problems with benefits administration (though problems with benefits though

sometimes acute tend to be temporary). Since the financial context for these problems

is life already lived on a low or no income, the constraining effects of the debts caused

by lifestyle and other problems is considerable.

Problems with benefits administration

Dealing with welfare benefits is never straightforward and some people reported real

hardship that had been the result of problems with benefits administration. Some of

those problems had been self-inflicted, perhaps unwittingly.

‘In summer 2008 my benefit stopped. No job, no HB, no gas, no electric, no

food. I got into debt with friends and family. No income for four and a half

months. I sold most of my belongings: camera, phone, dvds etc when my

benefit stopped.’

‘My benefits did stop a long time ago because they [the DWP] needed some

information that I didn’t give them. I found life incredibly difficult and felt

very depressed. [Now] my only debts are rent arrears and a Thames Reach

loan that I was given a while back when I didn’t have any money. I’m paying

these off gradually.’ (male, 47)

Family conflict

Family obligations may lead to financial problems and personal sacrifices.

‘I had to sell my car to deal with an £800 debt to bank 15 years ago, a debt

incurred because of family responsibilities, helping them financially. I never

could afford to get a new car after that and I really miss it. Clearing a debt,

the relief was wonderful. Selling the car I missed the freedom.’

People may be burdened with the negative financial behaviour of their partners.

[I am] ‘very careful and managing to save a bit due to organising my budget

well. When I was married my husband controlled and spent it all. When I got

rid of him I found myself in debt but managed to sort it out.’ (female, 47)

“

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27


Having money makes some people fear they may be prey to exploitation as

experienced by this respondent.

‘It depresses me when I have money as it creates pressure. If you’ve got

money you’re always watched by other people – my son, mum, sister,

girlfriend, for example. If I’ve got money I’ll keep it quiet.’ (male, 36)

Mental health

Longstanding mental health problems may also mean that people find it difficult to get

or keep work, which leaves them relying on benefits. Mental health issues may also be

connected to other problems, such as dependency on drugs and alcohol and, when all

taken together, people feel passive and powerless in their management of their money.

‘I’ve never managed my money but I could a bit better before I was on the

crack. I used to be able to choose not to buy drugs during a 7 year period in

the 1980s -except minimal drinking/dope. I spent my time in the library. I had

a nervous breakdown at 18 and always felt out of control. I’ve never earned

money through working or paying stamps. I don’t feel like I’ve ever made

any important financial decisions [except] drugs, spending more on drugs,

or not. [If I had less money] I’d starve. It’d be lousy. In the past I’ve survived

by begging, to buy wine. There are normally hostels where you can get a

bed and fed. I can get tobacco by collecting dog ends.” (Male, 40)

As is well known, mental health problems commonly referred to as ‘having a

breakdown’ can have untold consequences. One respondent had been a high-earning

watchmaker for 10 years. After the breakdown,

‘It wasn’t the change from high earner to benefits claimer that was most

difficult, because I could manage and adjust. The biggest problem was

I had a girlfriend and I was on benefit – it was difficult to maintain that

relationship, going out, activities together etc. Also we moved in together

and I couldn’t contribute to bills. Whilst I am on benefits I will live on bread

and biscuits for a few days to save up for treats like theatre tickets.’

“

“

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28

Some people’s vulnerabilities caused by mental health problems make it difficult for

them to deal with the complexities of saving and financial management. In the first case

this respondent is concerned about how much (not how little) he is receiving. Judging

by his comments his support worker has tried to offer practical help and has had some

success. But the service user evidently still feels uncertain and somewhat insecure.

‘It’s good to save for the future. I wouldn’t have any money to spend if

I didn’t have savings. I understand the difference between saving and

spending money. I have some savings but I’ve nowhere to put them as my

Post Office account only accepts benefits. My key worker did try to help

me open an account to put my savings in but I didn’t want to do it. She

explained that I can get interest if I don’t spend the money. I didn’t know

about that and found it hard to believe. I’m thinking about whether to open

an account for my savings. I might do it but I’m not sure, I don’t like the idea

of a bank knowing about me and my money. I’m not saving for anything. The

money just happens to be there. My START [mental health worker] applied

for DLA [Disability Living Allowance] for me but I don’t want it. I don’t think

I should be getting it because I’m not disabled. I’m not in a wheelchair. I’m

worried I will be arrested for fraud. I have tried to stop the money but they

[Department of Work and Pensions] won’t do it over the phone.’ (male, 49)

This respondent has a complex attitude to money with which the support worker is

doing their best to help.

‘For many years I have only spent notes – never coins. My coins accumulate

in my pockets, then end up on the floor of my flat. During environmental

health clearances I estimate I’ve lost thousands. With my support worker

I’m trying to learn to spend coins, but it’s difficult. I get frustrated by fiddly

coins.’

Alcohol and drugs

Often people are spending much more than they can afford on drink or drugs and that

leads to problems with debt. In some extreme instances getting money to buy drugs

has been a motivator for theft and other crimes.

‘I’ve had a history of addictions in the past which make managing more

difficult. Between the ages of 25 and 35, all the money I got went on cocaine

and crack. I was working at that time and spend all my salary on drugs. Very

little money went on food. I avoided bills. And then I had to fund the drug

habit through crime.’

“

“

“


29

Being dependent on drugs or alcohol, which is not only often associated with debt but

also with losing your home or moving frequently, comes at a high price.

‘When I was on the street I was using drink and drugs and spent everything

I had, up to £400 a day. Recently I spent a lot on drugs, over £300, but this

was not usual. Recently I’ve had to survive on less to pay off drugs debts

and I paid off £375 in 5 weeks. I felt down but I managed.’ (Female, 38)

‘I have been in debt to many dealers. If I had a prison sentence or a court case

pending I would spend [my money] on purpose. I never faced bankruptcy.’

Buying drugs has left many people with serious debts from which it has taken time and

commitment to extricate themselves.

‘I manage money quite well and am able to budget for food and bills each

week. I’m able to save for things I want from time to time. [Managing money]

has varied depending on the issues occurring. Over the last couple of years

I have been better able to manage money as I no longer use street drugs

and my mental health is better. During the times when I was using street

drugs and had other personal difficulties I found managing much more

difficult. I have on occasion been in debt but always repaid debts over time.

I’ve never taken out loans as couldn’t trust myself to repay them. I’ve never

been in a position to have mortgage or own house. If my benefits were

stopped I would not be able to live and would be back on streets.’ (male, 48)

Extensive and frequent use of drugs leads – among many other harmful consequences

– to problems with debt, but also, as is well known, all too frequently to bad company,

crime and prison.

“

“



30

Exploitation of vulnerable people

A small number of people prey on and exploit the trusting natures and goodwill of

vulnerable people. The story recounted by one respondent below is disturbing.

For many years, following a history of mental health problems and periods in hospital,

he had been handing over all his money except for £10 a week to someone else.

‘I saved money every week. I can make my money last all week. I have

enough money every day to live on. At the moment I am getting the most

money I have ever got and I feel in control of my money. I save a little bit

every week and keep it at my dad’s house. I don’t know why I don’t keep it

in a bank or building society. During periods in my life when I have been in

hospital I had no access to any money. I would have to ask other patients

for cigarettes. I received back payment when I was discharged from

hospital. Up until September last year I was giving away 90% of my weekly

income to a childhood friend who asked me for it to cover his rent. This

had been going on on and off for 3 to 5 years. Up until last September I was

living on £10 a week. I could not buy any extra food. My family gave me one

meal a day. I paid my £7 rent and bought cigarettes with the remainder.

I could not buy any clothes.’ (male, 33)

Financial difficulties arise cumulatively. One set of problems builds on another.

The backdrop to begin with is almost always a low income and limited resources.

Beyond that the triggers can vary. For some family conflict can be the start of a

downward spiral. For others longstanding mental health problems mean both their

capacity to earn money is limited as well as their ability to manage it effectively.

Probably the most pernicious and intractable source of persistent and irremediable

financial difficulties is long-term use of drugs and alcohol. Notwithstanding all these

problems, which are in any event not universal (as the responses quoted in the chapter

1 showed) many do get by and much more besides. The past may yet not be a foreign

country, not least because the debts remain. All the problems may not yet be overcome

but people can and do use limited financial means to start to build better futures.

Problems may remain but lives can be enlarged and managing money better, however

little in amount, can certainly help.


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31

Factors leading to financial problems now and in the past 3. The importance of savings

Everyone knows that it is important to save but everyone also knows, unless you are

really rich, it’s easier said than done. Savings mean you have some resilience when

things go wrong and savings mean that you have resources to do some of the things

you really want to do once your basic needs for security and permanence have been

attained. In the short term you can improve your immediate circumstances with some

new clothes or furniture. In the longer term you can achieve some cherished ambitions.

Savings could also mean that you can help your nearest and dearest if they need help.

This is not just a generous, selfless contribution to their wellbeing. In making a gift, or

even a loan, a further tie has been added to the multi-strand sinews that connect you to

the other person and, through their mutual obligations, to numerous others. Bonds of

affection and obligation are always close cousins; sometimes affection and obligation

are as indistinguishable as identical twins. Acts of generosity are always acts also of

enlightened self-interest. They are investments on which a dividend will

be paid in the future.

Anthropologists call this ‘lagged reciprocity’ and it is the wellspring of friendship, family

and community life. I help you now not just because you need the help now and I can

afford to give it (financially and emotionally) but also because at some point I will need

help and you will be in a position to give it. A small loan or gift given willingly now,

which may seem a trivial act, goes straight to the heart of human relationships. The act

of helping someone else financially or in other ways is also a way of winning respect

for yourself as a citizen; someone who is a giver as well as a receiver; someone with

contributions to make as well as needs to meet. Conversely being unable or unwilling to

give may be perceived as an act of selfishness, but is perhaps more correctly seen as

an act of weakness. I have done so little that I have so little. I have so little I can spare

nothing. So I do not deserve respect.

Saving on benefits can be difficult, however. Nonetheless about half of the respondents

did manage to save something, no doubt by making considerable sacrifices and

perhaps for underlying motives that included: achieving their own goals; strengthen

their relationships with others and earning respect.

32


Figure 3 shows how much respondents had saved.

Fig 3: Amount of money saved by respondents

Num

ber

of s

ervi

ce u

sers

35

30

25

20

15

10

5

0

Non

e

Less

than

£50

Betw

een

£50

– £9

9

Betw

een

£100

– £

999

Ove

r £10

00

Amount of money saved

33


Saving for a ‘rainy day’

The phrase saving for a ‘rainy day’ was frequently used. Perhaps people who have

previously led chaotic or unstable lives particularly value the sense of security that

comes from having some money put aside. They may have experienced crises and

know that recovering from a crisis is often much easier if you’re not broke. The views

about saving for a rainy day contradicts the negative stereotype that homeless people

are always feckless and irresponsible and will often spend all the money they have –

and sometimes more than they have – on drink and drugs.

[Saving] ‘is very important. Crises come often so saving for a rainy day

gives peace of mind.’ (male, 42)

‘I think saving for a rainy day is very important. Although I tend to live for

today and worry less about tomorrow. I am currently saving money for a trip

back to Africa.’ (male, 45)

‘I would rather have a good standard of living today and put some

money away for a rainy day. [I’m saving] to get my gold ring out

of the pawnbrokers.’

(male, 47)

‘I want to have something put away for a rainy day. If I had a lot more money

and my nest egg then I’d like to travel around the world.’

[I’d save for] ‘a rainy day and some new games for my computer

and I like buying clothes.’ (female, 38)

Not having enough money for emergencies can lead to a lot of worrying.

‘It would be nice to have a buffer so that for example I’d be able to replace

an electrical appliance like a washing machine, or even maybe to cover a

larger bill, instead of worrying all the time.’

This respondent recognised the importance of saving but also

recognised how difficult it was.

‘It’s very important I think, it’s good to save. What if something breaks and

it needs replacing. When my TV broke my sister had to lend me the £150 to

repair it and then I paid her back. Though I think it’s good to save, it’s easier

said than done in practice. What does the government think we’re getting?

They know we don’t get much to live one never mind save.’

“

““

34


A desire to save

Many respondents wanted to save but felt that their low incomes made

it very difficult to save, perhaps impossible.

‘If you can afford it, it’s very important because it helps when you

need a little extra.’

‘I know it is [important to save]. I just don’t do it. I make sure I have at least

£50 in change at home and currently have £150 in a credit union.’

‘Philosophically I think it’s a wonderful idea, but practically, sod it. Actually,

I’ve dismissed it because I’m unable to do it – I’ve not enough to save. I tend

to spend benefit cheques quickly, like in the first couple of days and then try

to make it to the next cheque. There’s never anything left.’

This respondent in her thirties was concerned about saving for her retirement.

‘It is the most important thing for me. I always think of saving money for a

rainy day. I am fully aware that one day I will become retired and I will need

help and support.’ (female, 34)

‘It’s really important. I know I have ambitions and if I want to be able

to achieve them I’ll need savings. Savings is a doorway for ambition.

[I’m saving] for a rainy day but also for more ambitious plans. I haven’t

decided what those are yet.’

“

“

35


‘Living for today’

Some gave temperamental reasons for not saving: it was simply not in their nature.

It is important to be saving but I don’t do it. I’d rather live today than

tomorrow. I do save when prompted by others such as my wife in the past

and friends now especially when special occasions are round the corner.’

‘I am not a saver. If I had the money I would spend it. I never have enough.

I never had enough money to be in control. I am not able to save, as I am

not able to budget when buying. I never have enough, so I could say the

importance of saving is not a priority in my life. My priority is to get by.

I have 5 children and we live on benefits. It is hard to make ends meet.’

(female, 41)

Saving on a low income is obviously difficult but nevertheless important. Some feel

they can’t do it but may not have been encouraged even to try nor advised about the

most easy to use and efficient savings products. Many know the importance of savings

and do their best on limited resources. They could be helped to save more and save

smarter by, for example, using tax efficient savings products. Increased returns on

savings increases incentives to save. The circle can become virtuous and more can

become more.

“

36

4. Experience of borrowing and debts

As noted in previous chapters low incomes, relationship problems, mental health

difficulties and bad habits with drugs and alcohol can all create and exacerbate

indebtedness for homeless and vulnerable people. The insecurities of their history and

lifestyles make people reluctant to engage with the perceived risks and complexities

of bank lending products. Many respondents were extremely wary about borrowing,

particularly from banks.

‘I’d never borrow from banks. Never have. My brother’s been in debt through

gambling and I don’t want that.’

‘I hate it. I’ve had a very bad experience with lenders. I was conned by small

print.’ (male, 25)

‘I am terrified to borrow because finding and keeping a job in the UK is not

guaranteed. Like the weather you can’t trust it.’ (female, 34)

On the other hand, some were familiar with using mainstream financial products.

‘I have credit cards but ideally I don’t like the idea of borrowing money from

banks or loan companies. I don’t really like to borrow money from friends

but if I need to I might borrow money from my family.’ (male, 45)

‘I feel OK to borrow from banks as long as I can pay the money back and

still live comfortably. Don’t like borrowing money from people. I pay them

back asap.’ (male, 45)

This respondent felt that borrowing was not the way to buy what you wanted. Saving for

it was a better option.

‘No, I don’t borrow. If I can’t afford what I want, I wait until I can.’

Many respondents had had problems with borrowing in the past.

‘I’m not interested. I’ve paid back a social fund loan before. The financial

trouble I got into was about non-payment of bills, not credit.’

‘I don’t like the idea because I’ve got into trouble before. I had a loan and

struggled to pay it back. That’s put me off doing it again.’ (male, 59)

‘I took out a loan three years ago for £3,000. It was a letter from my bank,

unsolicited, which I took on impulse. I didn’t shop around. I open a new

savings accounts when my bank sends me a letter suggesting I do it. I often

lose track of these savings.’

“

“

““

37

Experience of borrowing and debts

Debt

In some of the quotes above, difficulties with money have been the consequence of

other problems like addiction or homelessness. As well as being a consequence, debt

can also be a cause of homelessness as these two responses illustrate.

‘I don’t save money. I’m disorganised and always in debt. I spend more

than comes in therefore I’m always playing catch up and behind constantly.

I’ve never been in control even when working. Whatever came in was

soon spent. But I’ve never faced bankruptcy though I’m always in difficulty,

always in debt. I’ve never bought a house and never taken out a big loan

or made an important investment. Never had to make important financial

decisions. If my benefits stopped I would have to live on handouts or

starve.’ (male, 60)

‘I’ve been in debt pretty much my whole adult life. I moved to London in

2001 and on JSA [job seekers allowance]. I got into debt straightaway by

spending money frequently, taking credit and being too stressed to deal

effectively with tenancy issues. My current situation has improved since

I went to debt advice services. Other people are helping me. My brother is

paying off a lot, energy debts have been written off, my boyfriend has been

paying too. I haven’t really had to do much apart from cut back. I think

I’ve never made an important financial decision. I’ve tried to live my life.

I haven’t planned a pension but am beginning to think I should now. I’ve

always just tried to get by.’

“

38

Debts have sometimes been built up through a history of gambling.

‘When I had a gambling habit everything went on the gambling, even the rent

and the bill money from everyone in the family home. If I get a job I would

have more money and there could be the risk that would start gambling

again…[When I took] out a credit card..they kept putting the limit up. I

always accepted the increased credit limit. I had six credit cards in the end,

only because I was funding a gambling habit…[If I had less money] I would

throw myself off a bridge. I would not be able to cope on less money. If my

income support is stopped and I have to go on JSA, I will lose £25 per week

income. Then life would be much more difficult and I might be pushed into

a job and that would be very hard….[If I had more money I would] possibly

start gambling again to a greater degree…I can only see this as a negative

option. Having more money is a worry for me: thre are more risks, more

responsibilities, more possibilities to waste it or get into debt again. I used

to gamble £1,000 a week.’ (male, 51)

Some respondents still had substantial amounts of unpaid debt.

‘I took out a loan over £10,000, which I cannot now repay.’

‘I tried to borrow from a bank to pay off personal debts but was turned down.

Getting into debt with a bank to achieve something like a business is OK -

but not just to have extra cash.’

‘I currently have a loan of £250 and I pay £50 every two weeks. This debt is

getting me down and I’m worried about it.’ (male, 47)

‘When I was 25 I borrowed £2000 for a car and had trouble paying it back.

I lost my job for medical reasons. I paid it back in the end by getting a job

for less money. I might still borrow in the future. I’m a bit wiser now.’

Figure 4 shows that the two largest groups among respondents were either people

who had no borrowing or debt or they had debts of between £100 and £1000.

Figure 5 compares the number of respondents who have savings with the number

of respondents with loans.


“

“

39

Fig 4: Amount of money borrowed by respondents

Experience of borrowing and debtsN

umbe

r of

ser

vice

use

rs

25

20

15

10

5

0

Non

e

Less

than

£50

Betw

een

£50

– £9

9

Betw

een

£100

– £

999

Ove

r £10

00 –

£99

99

Ove

r £10

000

Amount of money borrowed

40


Fig 5: Amount of money borrowed compared to amount of money saved

Num

ber

of s

ervi

ce u

sers

35

30

25

20

15

10

5

0


Non

e

Less

than

£50

Amount of money borrowed


Betw

een

£50

– £9

9

Betw

een

£100

– £

999

Betw

een

£100

0 –

£999

9

Mor

e th

an £

10,0

00

41


Debts can arise as a result of irresponsible behaviour combined with ignoring the future

and thinking only of the present. Once incurred debts are a considerable source of

anxiety and powerfully undermine positive feelings of security and wellbeing. Arresting

the rise in people’s debts and helping them to deal with problems from the past must

be at the heart of any approach to financial inclusion. Having said that, it is absurd

to assume that because some vulnerable people have difficulties with debt then

all vulnerable people should be permanently excluded from borrowing. As already

noted in previous chapters of this report many vulnerable people cope well on limited

means; others manage to save and many have ambitions for the future in the short

and long term. Responsible people should be allowed to responsibly borrow and to

have the knowledge and confidence of processes and products with which to do that.

Responsibly borrowing money is now a mainstream aspect of ordinary lives, not a

mortal sin.

42

5. Using money to meet aspirations

Homeless and vulnerable people do mostly try to manage their money effectively

despite their limited resources, their past problems, their lack of knowledge about

banking products and, more generally, a lack of confidence about their ability to

manage themselves, their lifestyles and their relationships with financial institutions.

Indeed the fact that, despite all this, people do ‘get by’ and cope is no small

achievement. But people want more, as this part of the report will show. They want

to build for the future. They want to live a fuller life.

Modest, everyday wishes for security and permanence

It is not surprising perhaps that people who had been living on low incomes or benefits

for a long time felt that even achieving some modest personal goals would require

more funds than they had readily available. Having a comfortable, agreeable home

was an important goal for many people, not just for the obvious reasons of shelter and

avoiding homelessness but also as a place of security and permanence with all the

psychological and emotional benefits that flow from that. When asked what they would

spend money on, people responded with some simple suggestions that would improve

the quality of their lives and their homes, often only recently acquired.

‘A pair of shoes and a jacket. A washing machine/dryer. Attach a

shower to my bath, clothes, food. ‘

‘I‘d put it towards a washing machine. On my home , like decorating

and a carpet.”

‘Furniture, clothes, relatives’ birthdays, paying bills.’ (male, 42)

‘Curtains.’

‘Currently, a carpet. I previously saved for cooker and washing machine.’

[If I had more money] ‘I’d like to make improvements to my flat and have a

nice holiday. Make sure all my bills are paid. Have a nice social life.’

[If I had more money] ‘I suppose I would live a better lifestyle, buy better

quality food and more regularly. I’d buy clothes.’ (male)

[The most important financial decisions I’ve ever made are] ‘buying a TV.

I wanted one for ages and saved up and bought it. I was going to take out a

loan to buy a car when I passed my test. I had doubts so I held off in case

something happened. It did. I lost my job.’ (male, 25)

“

43


‘Classy underwear for my girlfriend. I used to buy this for her when I

had money and it cheered us both up. I can’t do this on benefits. I’d like

a decent washing machine and fridge. I’m currently borrowing a tiny,

inadequate fridge from a friend and don’t have a washing machine.’

The need to save money was recognised by some if they were

going to achieve their ambitions.

[Saving] ‘is very important. I still have a little saved even though I’m on

benefits. I can’t add to savings at the moment and would like to save more.

I want to get myself a car. I haven’t had a car for 15 years. Also I’m looking

to move home and will need money for furnishing.’

‘I understand that if I want things in life I have to save. I haven’t been able

to get a car, nice clothes plus furniture, gold jewellery or afford a holiday.’

‘I would save for a big purchase like holidays and expensive gadgets.

Also I’d save for family birthdays and Christmas presents.’ (male, 28)

[Saving is] ‘very [important] for when I get my son back who was taken

away from me. I want money for college for him.’ (female, 38)

Less money might make people look for a job

According to a number of commentators benefits may act as a disincentive that

discourages people from seeking work and in recent years governments, in the UK

and elsewhere, have attached conditions to benefits to prevent recipients becoming

dependent on them, including reducing benefits for failure to comply with efforts to find

work or childcare. In responding to the question in the survey, ‘what would you do if

you had less money than you have now?’ several people commented that they would

try to find a job which would seem to give some credence to the view that benefits can

breed dependency.

[If I had less money] ‘I would use charity organisations, look in skips,

look for a job more seriously.’ (male, 45)

[If I had less money] ‘I would try to find work and cut down on my spending

like buy less food, watch how I use my electricity.’ (male)

[If I had less money] ‘I’d be more determined to get a job and work for

money. Or I’d have dinner at St Mungo’s day shelter. More of a reason to

quit smoking.’ (male, 36)

“

“

44

How realistic such ambitions would be is, of course, another matter. Are there suitable

jobs available? Do they have the skills? Would they be able to keep the job once they

got it? And so on. Nevertheless the aspiration to work and the belief in the poverty trap

created by benefits cannot be ignored.

Managing money for personal achievements

Others have learnt to manage their money as a way of achieving what they want.

‘I’m careful. I have ambition and money is part of that. I managed not to buy

alcohol. I manage my money better now than 12 months ago. I feel more

responsible to achieve what I want. A year ago I was still learning,

I wanted to buy things but I spent too much. I was homeless 8 years ago

and I wasn’t able to plan and spend my money in the right way. [The most

important financial decision I’ve ever made is] buying my fish and my fish

tank because I had to learn how to save after I had made the decision.

It also helped me to budget and to plan to get what I felt like having.

[If I had more money] I would like to help my Mum in Kenya because is

struggling to pay her rent and she’s living on her own.’ (male, 42)

‘I’d leave the city. I’ve wanted to go for ages because I feel life

in London has been awful.’

‘I’d buy a house in Birmingham where my boyfriend lives and think about

opening a shop in Nigeria, where he’s from originally.’

‘I’d go to Spain with a friend for six months.’

Some professed ambitions to start small businesses if they should come

into a substantial sum of money.

‘I’d open a small shop selling computer equipment.’

“

“


45

Desire for gadgets

More unpredictably, many people who found they had some extra money, said they

would spend it on a different kinds of technological gadgets.

‘I could get my Xbox.’ (male, 25)

‘If I were able to save, I’d buy a WII.’

‘A laptop computer, broadband internet access at home.’

‘A computer, furniture, clothes. I’d give some to church.

Half I would save.’ (male, 42)

‘Updating my computer, days, out, visit my family.’ (female, 47)

More money to improve family relationships

Increasing contact and improving relationships with family members is often seen

as an aspiration that could be achieved with more money.

‘I would visit my son and spend the day together at the seaside maybe, have

a meal or buy my son some clothes. I’d put some of it in my son’s account

and have driving lessons.’ (male, 45)

‘I would help my mum with some and save the rest.’ (male, 42)

‘I’d maybe spend some money on clothing and probably spend the rest on

entertainment and enjoyment, such as drink. I’d have trip to Devon and treat

my kids.’ (male, 45)

[If I had less money] ‘I’d stay in more and I would drink and take drugs less.

I’d probably will be looking for other things to do, more meaningful such

as courses and the gym. I would live differently, looking for work or doing

something worthwhile. [If I had more money] I would make more of an effort

to see my family and would go to Devon where my sons live. I would give

and send money to my children and also treat them more.’ (female, 45)

“

“


46

[If I had more money] ‘I would save money for my son and travel to see

my family more.’ (male, 45)

[If I had more money] ‘I would live as I do now but give the extra money

to my daughter.’ (male)

‘If I had more benefits I could have a holiday and treat my nieces

and granddaughters.’ (male, 48)

[If I had £100,000] ‘I’d pay off my brother’s debts, give my mum

some and keep the rest. I’d save mine.’ (female, 38)

Aspiring to property ownership

People were asked what they would do if they had a substantial windfall or £100,000.

Many could not conceive of such an unlikely turn of events. Many others said they

would buy a flat or a house.

‘Buy a house and perhaps give some to my daughter.’

‘I would put some of it towards a flat and furniture and

save the rest.’ (male, 51)

‘A house, take my children on holiday.’

‘A property in Ireland, a small holding of land.’ (male, 47)

Long-term financial goals

[Saving is] ‘important for the family left behind after I die. I’d rather have a

good standard of living today for more freedom, comfort and enjoyment,

but I would still try to save. I’m unable to save right now, but would like to

do so that I can travel to my family abroad. I’d also like to own my own land

or a boat.’

‘I think that saving for a rainy day or retirement is very important. I usually

save for new clothes or holidays and new fishing gear.’ (male, 51)

“

“


47

The responses in this chapter point in part to the rich inner lives lived by the

respondents. They may have had bad experiences that have left them somewhat

diminished in confidence as well as in resources. Their current circumstances may

not be all they have ever had or all they ever want. Nevertheless their minds are full of

memories of good friends and better time in the past. The future, despite everything,

is painted in modest but vivid colour. They want a livelihood and a life of curiosity and

interest; a life in touch with contemporary technological lifestyles; a life of helping and

being helped; a life of loving and being loved; a life of security as well as possibility.


48

6. Conclusions

All the stereotypes of the attitudes and behaviour of homeless and vulnerable people

to money are negative. It’s assumed that they don’t have any money. If anything they

have a stack of debts because of alcohol and drug abuse. They spend the little they

have on fags and booze. They rely on benefits and can’t manage money. They couldn’t

earn a decent living and wouldn’t know what to do with any substantial sum of money

if they had it. On the basis of the responses in this research, all these stereotypes are

unfair and inaccurate. The truth is more interesting, more varied and more optimistic

than these stereotypes suggest.

Living on benefits means that many of them are just getting by. Some have recovered

from serious financial problems in the past and got their financial affairs into a stable

and sustainable state. Some of those financial difficulties had been caused or affected

by problems, sometimes self-inflicted, with benefits administration. Because they don’t

have much money, many people on benefits shop around responsibly for the best deal

they can get. Many homeless and vulnerable people are coping well with their money.

Vulnerable people are not all isolated, without friends and family contacts, and relying

on drinking mates and short-lived friends from the street with whom they often argue.

Like the rest of the population the respondents in this study relied principally on family

and friends to tide themselves over financial difficulties or to deal with problems that

arose suddenly, which need money to sort them out. Some are also willing to lend to

friends.

Many had had problems with money too. Many had been in debt in the past, and

some had been declared bankrupt. For some, these problems had arisen from other

addictions: drink, drugs or gambling. Mental health problems had made it difficult for

some to cope with money. Family conflicts had also been a contributor to financial

difficulties. Lending to friends had also been a source of conflict. Worst of all, some

people had been preyed upon and exploited by so-called friends and, in effect, had

large sums of money stolen from them.

For the future, many people wanted more money to live a simple but better life. They

wanted new curtains, furniture or a television. Or they wanted to smarten themselves up

and dress better. One or two were keen to acquire consumer gadgets. Some wanted

more money to go on holiday or to travel, sometimes to travel to their original home

and to see family and old friends. Many people also wanted more money to be able to

assist and be generous to their families, particularly children. And most respondents

wanted eventually to have enough money to buy a flat or a house.

49

Conclusions

The story told in this report is not about the importance of having money per se.

This report reflects the meaning of money in the eyes of the service users who have

responded. And that meaning can be summarized in the following themes:

• alifefreefromdebt

• asecurelife

• themeanstoearnrespectfromfriendsandfamily

• meetingshorttermgoalsforhomelinessandcomfort

• settingandmeetpersonalgoalsandaspirations

• thefeelingoffreedom.

Recommendations for support workers

Support workers could help with going beyond sorting out benefits and immediate

financial problems. They could help service users to repay debts and overcome

difficulties from the past. Some support workers do that already. Fewer, however, think

that helping service users open bank accounts and use other financial products, both

savings and credit, and use them responsibly are important ways of helping vulnerable

people to achieve their personal goals. These goals might otherwise seem remote.

Figure 6 shows that most service users only make use of the most basic financial

products, such as current bank accounts and the Post Office Card Account.

50

Fig 6: Use of financial products by respondents

Num

ber

of s

ervi

ce u

sers

with

this

pro

duct

35

30

25

20

15

10

5

0

Cur

rent

acc

ount

with

abl

ank

or b

uild

ing

soci

ety

Post

Offi

ce C

ard

Acc

ount

Savi

ngs

acco

unt w

ith a

blan

k or

bui

ldin

g so

ciet

y

ATM

car

d

Cre

dit C

ard

Loan

from

a b

lank

or a

bui

ldin

g so

ciet

y

Stoc

ks a

nd s

hare

s

Hom

e co

nten

ts in

sura

nce

Indi

vidu

al s

avin

gs a

ccou

nts

(ISA

s)

Oth

er –

ple

ase

spec

ify

Oth

er fo

rms

of in

sura

nce

Life

insu

ranc

e

Conclusions

51

Conclusions

Support workers could offer help under the following headings:

• Day-to-daybudgetingandmoneymanagement,includingbut

notconfinedtowelfarebenefits

• Overcomingfinancialproblems,particularlydebt,fromthepast

withalegacyinthepresent

• Settingshort-termgoals

• Makingshort-termfinancialplans,particularlysaving,tomeetimmediate

personalgoalssuchasclothes,householditemsorgadgets

• Settinghigherlong-termpersonalaspirationssuchasholidays,flatsand

houses,orre-connectingwithfamilyandfriends,aswellasunderstanding

thefinancialimplicationsofthoselongertermaspirations

• Identifyingachievablemilestonestowardslongertermpersonalaspirations

• Helpingserviceuserstomanagedisappointmentandnottolosehearttothe

pointthattheyabandontheirgoalsbecauseofshorttermobstacles

• Improvingknowledgeof,andconfidencewith,financialproductsparticularly

savingsproducts

Support workers need to help service users to get beyond just getting by and help them

not just to save for a rainy day, but also to manage their finances for better weather in

their lives in the future.

The workbook that follows is divided into five sections, each structured around a set of

open questions for working with service users over five or more sessions together with

ideas for practical action planning.

52

The Meaning of MoneyWorkbook

Workbook Introduction

The Meaning of Money Workbook provides a set of five structured keyworking

sessions. The approach and questions are derived from the research methods and

findings in this report.

Each session contains between eight and ten questions to use in discussions about

money with service users. The questions are intended to be the starting point for a

dialogue and support workers are encouraged to go ‘off script’ if doing so would help

the client to explore their financial situation. Each question also contains a couple of

follow-up questions (in brackets) that can be used as further prompts.

Alongside each set of questions is a set of practical ideas for action planning.

If the service user wants to explore the area under discussion further, then these can

be added to their support plan. Some of the actions involve using websites – the web

links are underlined where they are given.

The Workbook sections are:

1. Attitudetomoney

2. Budgetingandspending

3. Bankingandsaving

4. Borrowinganddebt

5. Lookingtothefuture.

53

1. What sort of person would you say you are when it comes to managing money?

Do you carefully save money or are you a big spender? Are you well organised or

‘just getting by’?)

2. What’s the most important financial decision you’ve ever made – for example, taking

a big loan or making an investment? (How did it turn out? What could you have

done differently?)

3. When would you say you have managed money most successfully? (When have you

felt most in control of your finances? Have you ever been able to save while buying

all the things you need to?)

4. When would you say you’ve had the most difficulty in managing your money? (When

have you felt most out of control? Have you ever been in debt or faced bankruptcy?)

Section 1 Attitude to money

54

5. How well do you understand your current financial situation? (Do you know how

much money you have and what your regular income and expenditure is?)

6. Are there people you know now who manage their money particularly well - or

particularly badly? (What do they do which is so effective – or which gets them into

trouble? What could you learn from their experiences and behaviour?)

7. Are there new ideas or insights that have stuck in your mind from this discussion?

(What action do you intend to take as a result? Is there anything you would like to

talk about further?)

Section 1 Attitude to money

55

Section 1 Action Plan ideas for service users

A. Learn more about money management

It isn’t easy to manage money. Spend time learning about financial words and concepts

so that you can understand your options for managing your money. In addition to

information you might get at your local library or from family, friends or your support

worker, you could find out more from the following free websites:

• www.learnaboutmoney.org

• www.moneybasics.co.uk

• www.moneysavingexpert.com

B. Understand your financial situation

If the information about your finances are in a muddle then take time to understand

your circumstances and begin to feel in charge.

Bring together all your account details, bills, statements, letters, notices, court papers

and so on into one folder. Order the documents so that they make sense. If any

information is missing then write to the organisations concerned. Keep the folder up to

date as things change.

C. Set goals for the future

It helps to have clear goals for the future when managing your money.

Write down three reasons why you want to manage your money better. For each one,

write down how much progress you think you can make in 6 months, 1 year and 5

years. Talk to your key worker about your next steps on each of these.

56

1. How do you feel about the last discussion? (Have you had any thoughts since then?

Did you take any action as a result of the conversation?)

2. When you spend your money, what do you mainly spend it on? (Which things do you

absolutely have to have – and which ones are optional ‘luxuries’?)

3. What sort of person would you say you are when it comes to spending money?

(Are you impulsive or cautious? Do you go for the convenient option or always shop

around for the best price?)

4. What do you do in the times when you have a bit more money than usual? (Do

you spend it all at once or save it up? What would you do if you had a big windfall?)

Section 2 Budgeting and spending

57

5. What do you do in the times when you have a bit less money than usual? (Do you

borrow from other people or try and scrape by? What would you do if you had a lot

less than you do now?)

6. How good would you say you are at budgeting and planning your spending? (What

is your system for doing this, if you have one? Do you keep a record of your bills

and past purchases?)

7. How much do you shop around when it comes to buying something? (What sort of

things do you look for before you buy a product? What are your shopping tactics?)


58

8. What’s the best purchase you’ve ever made - and what’s the thing you’ve wasted the

most money on? (Are there lessons you can take for the way you spend money

in the future?)





59


A. Learn how to budget

Budgeting helps you to spend the right amount each month. It helps you decide what

you can afford to spend money on in advance. In addition to information you might get

at your local library or from family, friends or your support worker, you could find out

more from the following free websites:

• tinyurl.com/57urop

• tinyurl.com/ykfymnx

• tinyurl.com/7dtels

B. Reduce spending

It can be hard to get by on a low income but there are ways of reducing

spending and getting good bargains.

For example, when buying for groceries, shop with a list to avoid buying unnecessary

goods. For many items it is also cheaper to shop online. You can find more tips from

these free websites:

• tinyurl.com/ykfloah

• tinyurl.com/l2ugqv

C. Track your income and expenditure

You can track your financial situation by keeping all your receipts. Every month, go

through them to find out where your money is coming from (income) – and where it is

going to (expenditure).

You can do the sums on paper or use one of these free websites to help you:

• www.wesabe.com

• www.buxfer.com

60



2. What do you think about using bank accounts and savings accounts for keeping

your money? (Do you like the benefits of formal banking or prefer to operate just in

cash? What are the advantages and disadvantages of bank accounts for you?)

3. Do you have an account where you can put money safely and access it quickly

for example, a bank or building society? (Why did you choose this account with this

organisation? Is there anything you would like to change about it?)

4. Do you have a savings account where you can put money so that it will earn interest

for the future? (Why did you choose this account with this organisation? Is the rate of

interest good?)

Section 3 Banking and saving

61

Section 3 Banking and saving

5. What are you saving for, or what would you like to save for? (Are you putting money

aside for a particular item – or for your family or friends? What about saving for a

rainy day?)

6. How much do you manage to save each month – or how much could you save if

you are not doing so now? (Are you putting enough away for the things you want in

the future?)

7. Have you thought about saving for your old age? (Have you got a pension or

have you thought about getting one? Do you think you will qualify for the full

state pension?)




62


A. Open a basic bank account

A basic bank account is a type of current account. Customers don’t get a cheque book

or overdraft facility but the account can be set up even if you have a poor credit history

or minimal proof of identification.

Basic bank accounts allow you to deposit wages, pension and benefits and tax

credits directly into the account and cheques can also be paid in for free. You can also

withdraw money at cash machines, at the Post Office, or by setting up standing orders

and direct debits. Some banks issue a debit card with the account as well.

Almost all banks offer basic bank accounts so ask in a local branch for details.

B. Save regularly in a savings account

Saving money is important because it provides a buffer for times of hardship and helps

you to plan for the future.

Try and find a savings account with a competitive rate of interest as this will help your

money grow over time. If you pay tax then make sure your savings account is an

‘Individual Savings Account’ (ISA) as this is tax-free.

You can compare savings accounts at these free websites:

• tinyurl.com/2wsf8y

• tinyurl.com/ygurqbt

C. Invest for the long-term

The Government pays the basic State Pension to people who have made enough

National Insurance contributions. You can invest for your retirement by topping-up

your State Pension or taking out an additional private pension. You may want to get a

forecast of your State Pension or find an old pension. You can do so from these free

websites:

• tinyurl.com/l6xrx8

• tinyurl.com/ykdpfkq

The best way to put money aside for children is to top-up their Child Trust Fund (almost

all children have one). This is a tax-free fund which is operated by the child’s parents

and given to the child when they turn 18.

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Section 4 Borrowing and debt



2. What is your attitude towards borrowing money from banks or other financial

lenders? (Do you ever borrow from banks, personal loan companies or on credit

cards? What is your approach towards the risk of getting into debt?)

3. What is your attitude towards borrowing money from people you know? (Do you ever

borrow money off family or friends? What is your reaction when people ask to borrow

money off you?)

4. What’s the worst loan you’ve ever taken out? (What was the original reason for the

loan? Why was your experience with the debt so bad?)

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5. Are you currently in debt to anyone? (What is the size of the debt and how much do

you have to pay back each month? Is the rate of interest good?)

6. Do you know your credit score and have you got a copy of your credit reference file?

(What is your score? Have you checked that all your details are correct?)

7. How confident do you feel about comparing the benefits of loans offered by different

companies? (Do you fully understand the different APR numbers? Are you able to

calculate the total cost of a loan before you borrow?)




Section 4 Borrowing and debt

65

A. Understand your debt situation

If the information about your debts are in a muddle then you should take time to

understand your situation. Bring together all the relevant pieces of paper into one folder.

For each debt write down the correct name and full address of the creditor, the account

or reference number and the exact amount owed. If any information is missing then

write to the people or organisations concerned, including a postal order or cheque for

£1. They must reply within 12 days.

B. Get a copy of your credit reference file

Your credit reference file is a document about your credit history held by credit

reference agencies. The three main ones are: Experian, CallCredit and Equifax.

The credit reference is used to determine how likely you are to repay a loan.

About one in five credit reference files contain a mistake and this can affect whether

you can obtain credit (and what the rate of interest is). To obtain a copy of your file, write

to each agency including your full name, date of birth and all addresses you have lived

at in the last six years. Include a postal order or cheque for £2. They must reply within

7 working days.

C. Seek debt advice

If you are in a difficult debt situation then you should seek advice. Professional debt

advisers can help you to decide which debts to pay off first and sometimes negotiate

a better repayment plan for you.

Avoid unregulated debt advice firms. Instead, use one of these accredited

organisations:

• ConsumerCreditCounsellingService(CCCS)

• CitizensAdviceBureau(CAB)

• ChristiansAgainstPoverty(CAP)

• HelptheAged

• Payplan

• MoneyAdviceScotland

• MIND

• NationalDebtline,whichhasafreephoneserviceon08088084000


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2. How would you change the way you live if you had a bit more money and were in

better control of your finances? (What would you spend it on – or would you save it

or use it to pay off a loan? How would your life change?)

3. How would your relationships with family and friends be affected if you had a bit

more money and were in better control of your finances? (Would you be able to

spend more on other people or see them more often? How would your life change?)

4. In which areas do you think you most need to improve when it comes to managing

money: ‘budgeting and spending’, ‘banking and saving’ or ‘borrowing and debt’?

(What could you do to get better at each of these? How could your friends, family

and support worker help you to do this?)

Section 5 Looking to the future

67

Section 5 Looking to the future

5. What are the barriers and obstacles for you in managing your money better? (Which

of these obstacles could you influence or overcome? How could your friends, family

and support worker help you to do this?)

6. Are there any important financial decisions you want to make now or in the future?

(Why do you want to do this? How could your friends, family and support worker

help you with it?)

7. In terms of managing your money, what sort of person do you want to be in 2 years

time? (How will you have to change to become that sort of person? What sort of

person will you be in 5 or 10 years time?)




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A. Write a list of your short-term actions

Over these five sessions you may gained some ideas for improving the way you

manage money in the short-term. Write each of these down in a list. By each one put

details of what you have to do and when you are going to do it. You could also put

information about who is going to help you (e.g. family, friends or your support worker).

B. Decide on your long-term goals

Have a think about what your long-term goals are for your future. Do you want

to develop any hobbies or interests? Would you like to see more of your family

members or friends?

Write down each of your long term goals. By each one put details of how

better money management can help you to achieve this goal.

C. Learn more and work with others

Money management isn’t something you just learn once. You have to keep learning

to get better at it. You could get information from your local library or savers club.

In addition to asking for help from family, friends or your support worker you can find

out more from the following free websites:

• www.learnaboutmoney.org

• www.moneybasics.co.uk

• www.moneysavingexpert.com


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