Money Matters

Brace yourselves. We’re in for a bit of a bumpy ride this year. But why is it that money doesn’t seem to matter so much - until you don’t have any, that is. The British government wants us to spend, and ideally that should happen.  After all, that way, money continues to circulate in the economy in a spending cycle. If people spend more cash in the shops, those who supply and produce the products and those who work there are kept employed. They will pay the income tax that drips into the Government pot to pay for essential resources and so forth.  The argument goes that if we all stop spending, shops stay empty with unsold goods, the shop staff are made redundant, the goods producers likewise, and income tax from these people isn’t paid. Instead there is a greater demand for state benefits. This also has an impact on the Government’s money pot, pushing us, as a nation, deeper and deeper into debt. Still, it’s not all doom and gloom.  There are many ways to survive the recession and help the economy at the same time.

Some ways forward…

Prudent measures…

Ok, so the days of self-indulgence may be more limited, but we shouldn’t totally deprive ourselves of a few treats now and then in the current financial climate.  When there is spare cash in the purse, most families like to treat the children to day out at a local attraction or an afternoon of a fun activity such as pottery painting. Supporting these local children’s attractions and activity centres will ensure there will be many future days of fun for the children.

Living within a budget…

Living within your means has never been more important than now, and the golden word in days such as these is to ‘budget’. There are plenty of ways to work out a family budget and it’s really worth the time invested to do this.  You’ll need a few hours and will need to collate your most recent bank statements, pay slips, tax credits statements, bills and so on. It may take a while simply to collect all the information you need.  You can use the Financial Services Authority online ‘Budget Calculator’ to help you, or print off the page and complete it by hand. Go to www.fsa.gov.uk. The National Debtline also provides a free self-help pack and leaflets, including help on how to work out a personal budget.

Once a budget has been set, you’ll really know how much money is left for life’s treats.  So take advantage of the many great offers that are available at the moment. If you have the spare cash, it really is a good time to buy something or treat the children to a great day out. 

Buy locally…

With perhaps the odd exception this really is a superb time to buy.  It's helped by the short-term 2.5 % VAT reduction and by the many retailers who are aggressively vying for custom by cutting prices – it really is the survival of the fittest. Many local restaurants are taking on the national chains by offering superb offers for families. If you can afford it, it really is a good time to dine out - look out for the many eating-places offering 2 for 1 meal deals. The advantage of supporting local businesses is that it keeps the community alive and thriving.

Many theme parks and attractions are also providing offers to tempt customers, which will always be gratefully received by parents. Despite the financial climate, they still want to treat their children to fun days out during the school holidays and over the weekends. Of course, Primary Times is a great resource to find out what is going on and for updated listings, competitions and indeed special offers take a look at www.primarytimes.net.

Find out what you are entitled to…

So you’ve worked out your family’s budget and you are supporting your local community. Now, have you recently checked what your family might be entitled to?  If you haven’t already done so, or if your circumstances have changed, take a look at the www.hmrc.co.uk website to find out if you are entitled to Working Tax Credits and Child Tax Credits. The amount you get is based on your circumstances at the time you make the claim and your previous year's income. Tax credit claims run for a tax year (from 6 April to the following 5 April), and can only normally be backdated up to three months. Working Tax Credit (WTC) is a payment to top up the earnings of working people on moderate or low incomes. Generally speaking, you must work at least 16 hours a week and have an income of less than £11,500 a year. Remember there's also a childcare element - an extra allowance for working families who spend money on approved childcare. You can claim up to 80 per cent of childcare costs up to £175 a week for one child and £300 a week for two or more children. In addition to this, families can apply for Child Tax Credit - a payment to support families with children. To be eligible, you must have at least one dependent child and a joint income of less than £58,000 a year. (* Information quoted correct at time of writing - February 2009).

For more information:

Citizens Advice Bureau (CAB): Go to www.adviceguide.org.uk.

The Financial Services Authority: The FSA - the independent watchdog set up by government, provides a huge source of information on financial options. Go to www.fsa.gov.uk. Do the FSA’s Financial Healthcheck at www.moneymadeclear.fsa.gov.uk/tools/financial-health-check

By Kirsty Woodgate