Short messages on Finance and money issues from Respect Yourself, the guidance site for young people to help make good decisions in life.
A credit card lets you spend money on credit (borrow it from the bank). You can spend up to your credit limit, which might be a few hundred or even a few thousand pounds, depending on how confident the bank is that you can pay it back. It is usually advisable to pay off the bill every month – if you do you won’t pay interest on what you borrow. If you don’t pay the bill off in full the interest can be very high.
Some alternatives to buying gifts include giving quality time, making a present (where they can see how much effort was involved), or donating to their favourite charity in their name.
Don’t buy gifts that you can’t afford. Make sure any present is needed/useful or appreciated for what it is.
A loan is a type of debt. It is a a sum of money that is borrowed and expected to be paid back with interest. Typically, the money is paid back in regular ‘installments’, or partial repayments, over time.
Before living independently you need to think about money and whether you can budget or not. You may think you have enough but in reality it is a lot harder than you think. Practice budgeting before you move out independently.
If you don’t make a SORN or tax your vehicle you could be stopped by the police. Your vehicle could be clamped by one of DVLA’s wheelclamping partners. You’ll need to pay to have your vehicle released as well as producing a valid tax disc or a surety fee if no disc is available. If you fail to pay, your vehicle will be impounded, incurring storage charges. If you don’t pay the release or storage fees, your vehicle could be crushed or sold.
If you’re 16 or over you may be able to claim certain benefits or tax credits (government payments) if you’re on a low income, looking for work, disabled or caring for a child or older person.
The Social Fund is a government fund that provides emergency payments for different purposes. It provides set payment amounts for things like: maternity costs, funeral costs, and cold weather and winter fuel payments.
You usually build up qualifying National Insurance contribution years if you are: in paid work, in full-time training, receiving certain benefits, or caring for someone for over 20 hours a week.
If you’re considering using a payday loan company, it is recommended you look into all the available alternatives first. You could speak to your bank manager, as you may be able to get an agreed overdraft; speak to a Credit Union; or look into Social Fund Loans – these are government-funded, interest-free loans available to those on low incomes.