Financial difficulties and how to manage them

Many people are experiencing financial difficulty. Financial difficulty can be a result of the recession; people have less income, many have lost their jobs or had their hours of work reduced. There are also other factors that can contribute to financial difficulty such as an illness, a relationship breakdown, increased expenditure or poor budgeting with simply not enough money to go around.

Whatever your circumstances money difficulties can affect people's health and overall wellbeing so if you are worried about money, you are not alone. Your Credit Union and MABS have come together to give you some guidance on how to manage your finances in difficult times.

Drastic times calls for drastic measures

A change in circumstances can be a big shock to the system. There are ways of coping with this change. facing up to the problem is probably the most important step you will take. Remember, no matter how difficult your situation, debt problems more often than not can be resolved with time and effort.

  1. Work out your budget

    Use the Budget Planner on this site to work out your Budget. The Budget Planner is for your own use, so be honest, it is important that you write down your real income and expenditure. Your income determines your Budget. How you manage your Budget determines how much you have left to repay your creditors or to put money aside for things you may need in the future. A Budget will also assist you to prioritise your spending. It may be that by looking at your spending pattern it will help you to make the savings you need.
  2. Examine your budget

    If you see that you have a problem with your budget do not ignore this, there are things that you can do. See if you can increase your income or decrease your income. People sometimes get themselves into debt because they are not receiving all the money they are entitled to. See below for information and suggestions on areas that might increase your income:
    • Tax: Your local tax office will advise you about the credits you are entitled to given your circumstances www.revenue.ie
    • Social Welfare: Your local Citizens Information Centre (CIC) can help you check that you are claiming all your entitlements whether you are working or not. You can also get information from the following websites: www.citizensinformation.ie or from the Departments own website www.welfare.ie
    • Health Board Payments: these payments are administered by Community Welfare Officers generally based in your local Health Centre or Clinic. Some of these payments need you to meet certain conditions- again your local CIC can tell you what these are.
    • Back to Work Schemes: You can get information on the various schemes through your local CIC or call their helpline at 1890 777 121 or visit the Department of Social and Family Affairs website www.welfare.ie
    You can also examine how your money is spent.

    Try and identify areas of your spending where you could maybe cut back on spending. With your budget in front of you see if the following plan might help:
    • Put a mark against payments that cannot be changed e.g. your rent/mortgage.
    • Look at bills or payments that could be reduced e.g. electricity, Gas, telephone maybe could be reduced. Visit www.sei.ie.
    • You may be able to negotiate lower mortgage payments or shop around for cheaper insurance.
    • Now consider how you might budget for essential weekly spending on groceries, housekeeping, clothing etc. you might find that keeping a daily spending diary for a short while useful as it will give you a clear idea of where your money is going and where you might be able to economise. You can download and print your spending diary here.
    • Look at other items such as entertainment. Although you might again decide to make cutbacks here, do try and leave room for a social life for you and your family.
    • Look at an amount in your budget that you need to put aside for dealing with unexpected expenses that may crop up or for education costs and so on.
  3. Assess and prioritise your debt

    We all carry some form of debt, some more so than others. You may have a mortgage or pay rent, a credit card, store credit, a personal loan from a credit union, moneylender, bank or building society, a store card or owe money to a catalogue company. Whatever level of debt you have, it is important to prioritise your debt. Mortgage/rent and electricity are your first priorities. if some of your creditors are threatening legal action then they need to be addressed as the consequences of ignoring legal issues can be severe. Do not ignore creditors' letters or phone calls. Ignorance is not bliss, ignoring your creditors may affect your credit rating.
  4. Contact those you owe money to

    If you are in financial difficulty, make an appointment to meet your creditors, those you owe money to. Be open and honest. It may help to explain your situation in writing and to bring this with you to your appointment.
    • the account number or reference number
    • explain why you are in financial difficulty
    • state when you will be able to start payment and the amount you can repay
    • include a copy of your current proof of income and most recent financial statement
    Keep copies of all letters and forms you send and receive.

A little help goes a long way

Remember Your Credit Union is always there to help you.

www.corkcreditunions.com

MABS (The Money Advice and Budgeting Service) is a free confidential independent service which provides help and expert advice to people who are having difficulties in managing their money. MABS do not provide financial assistance.

St. Vincent de Paul Society aims to tackle poverty in all its forms through the provision of practical assistance to those in need.