One Street: reducing debt
Post categories: One Street One Goal,Ìýmoney
| 17:17 UK time, Monday, 28 June 2010
When we came to High Street seven weeks ago, we wanted to help residents feel more in control of their finances. And street residents Natalie and Gareth Williams were really struggling.
Gareth works full-time as a loft insulator and Natalie is a trainee driving instructor. With three young children and a low combined income, they told us making ends meet was a battle every month.
Gareth said, it'd just be nice to think, "yeah, we're safe with money - everything's good, all the bills are covered in the house".
Earlier this year the couple relied on credit cards to make ends meet while Gareth was on sick leave. They'd built up a debt of £2,500 by the time our financial expert Sue Clay came to advise them.
Natalie and Gareth Williams
They were told they needed to cut back at least £200 on their monthly spending because at the moment, there was more money leaving the account than coming in which could only lead to worse debt.
Sue advised them to draw up a budget and keep a cash diary to keep a close eye on what they were spending. They could then try and identify areas within the budgets where they can make those cutbacks.
It was never going to be easy. So one month on, how are Natalie and Gareth getting on?
They've switched to cheaper mobile phone contracts, got rid of their satellite movie channels and cancelled the insurance on their home appliances, their phones and their credit cards. As a result they've managed to cut their monthly spending by a £100, and feel they're starting to get to grips with their debt. When they got an unexpected tax rebate they put that money to good use and paid off one credit card completely.
But Gareth is a keen player for Heol Y Cyw rugby club. When the team won the district cup final, he couldn't resist joining in the celebrations. And a weekend away for a family christening in Nottingham was another unforeseen expense. The two events have cost the couple around £400, so Sue advises them to try and recoup some of that money by selling unwanted items.
Natalie has spent the last two years training to be a driving instructor. It's cost her £3,500 so far, and each month she has to pay £325 to lease and insure the car from the driving school. She's still not fully qualified and with only one pupil she's making a loss of around £200 each month. She wonders whether she'd be better off giving up on the plan, and concentrating instead on her other job at a local retail park. Sue's being doing the maths and just to cover Natalie's costs each month she'd have to cover at least 40 lessons a month before making any money whatsoever. Sue advises Natalie to think seriously about her future.
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