When times are hard financially, many people turn to sprucing up their wardrobe as a form of escapism. Trends become bigger and bolder and they turn over quickly. And right now, online clothing businesses are thriving and overtaking in-person fashion shopping. All of this points to the fashion world being an ideal place for a side hustle.

With the fashion industry having so many subcategories, how can you pick one? Read on to find out some of the best ways to set up a profitable side hustle, while still enjoying one of your passions.

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1. Personal shopping side hustle with styling 

If you are the one advising your friends on pieces they like and graciously saving them from bad cases of buyer’s remorse, this may be your best option. There are various online courses available if you’re serious about this pathway. This can help you find the right clients.

Once you’ve done this, promoting your fashion side hustle through social media is a great way to spread the word. Another good tip is to narrow down your brand and pick a niche, for example, a certain aesthetic or level of quality.

A simple way to create a personal shopping side hustle is to use fashion selling apps such as Depop or Vinted to sell targeted fashion bundles. This is where you purchase a set of clothes, shoes and accessories in the same style and sell them on for a set price. You can do this before speaking to a client, or after consulting with them. You can even clear out a bit of space in your wardrobe this way. As long as the pieces all match, you’re set.

You can also take this a step further and offer personal styling to build and diversify your side hustle – and make more money.

2. Selling on fashion

Can’t get enough of riffling through charity shops, thrift stores or flea markets to find hidden gems? Selling these pieces on could be a way of making extra cash and paying some bills. If your heart is set on finding high-end pieces, or pieces of a certain style, perhaps do some research on second-hand shops in your area that carry these types of items.

Similar to the previous option, it may be useful to decide on a target market group or aesthetic to ensure a steady flow of loyal customers for your side hustle.

When finding items to sell, have a look into the latest fashion trends using the internet or magazines to know what to look for. Next, see whether you can purchase some cheaper and more unique vintage alternatives. It’s also important to establish roughly how much you’ll make from something before you buy it. Check for marks or damage and estimate what it could cost to ship to its new owner.

A credit card with 0% interest on purchases could allow you to invest in your side hustle to get it up and running until you make a profit.

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3. A customised side hustle

Do you enjoy creating unique and one-of-a-kind pieces? Customising and thrift-flipping items is a fool-proof method of fashion-based income. Always try to look for the best price-to-quality balance when purchasing materials. If you have your own online shop, it’s a great idea to find a style that is timeless but can be adapted to varying trends and aesthetics. 

You can get away with buying damaged or stained pieces as you can always fix them and cover up imperfections with an interesting design. Inspiration is readily available on sites such as Pinterest. Sites you can use to sell your exclusive pieces include Etsy, eBay, Folksy, Depop and Vinted.

4. Be a fashion world influencer

Side hustles can exist almost entirely on social media. An online fashion business can fit neatly into your existing work life if you’ve got a busy schedule. One of the options in this category is influencing. Although you will need a large portion of luck, influencing can get you a decent amount of free apparel, at least.

Use it as a jumping-off point for the other ideas in this list, as it can gather interest for your side hustle. Someone is more likely to purchase your products or services if they already see you as stylish. When customers see your personality first, they’re more likely to trust you as a seller.

You could also manage a social media account for a small fashion business. If you want a side hustle in the fashion world, there are lots of courses online to help with social media skills.

The post 4 fashion world side hustle ideas to help pay the bills appeared first on The Motley Fool UK.

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The UK government’s decision to suspend the triple lock on the State Pension may have been rather premature. In April, pensions will go up by 3.1%. However, UK inflation is forecast to reach almost as high as 8% by then.

Some pensioners may struggle to keep their finances afloat in the coming months for three main reasons.

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1. The triple lock on State Pensions won’t protect against inflation

First of all, April’s increase is well below the current rate of inflation, which is 5.5%. This is because the percentage is calculated based on Consumer Price Index figures from six months before the uplift is actually applied. 

Secondly, the UK government decided to suspend triple lock protection to avoid an increase in pensions in line with wages. After the lockdowns, there was a spike in average pay which the government wanted to ignore, for this year at least.

According to the triple lock, the State Pension should rise in line with inflation, wages, or 2.5% – whichever is highest. With the triple lock still in place to match average wage inflation, the State Pension would have gone up much more. As things are now, this would have helped to keep pace with inflation as well. Without the triple lock, the State Pension will add up to around 5% less than it should be, exceeding only the lowest lock (2.5%), rather than matching the highest. 

So the triple lock is a triple fail this year:

• The actual increase based on inflation was underestimated. 
• The safety net of 2.5% is well below the rise in both wages and inflation.
• The government has removed the link between wages and the State Pension.

2. Inflation hits low-income pensioners harder

The State Pension will increase by around £5 per week in April. It doesn’t pay for much more than the basics. Unfortunately, the prices of some basic items have been rocketing. The cost of a weekly shop may go up by more than £5 in the coming months unless retirees make some swaps to cheaper items and brands.

On the State Pension only, there may not be many ways to save that haven’t been tried already. Pensioners with additional sources of income will need to cover what is effectively a decrease in income.

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3. Rising energy costs a source of worry on a State Pension 

One rise that particularly affects pensioners is energy costs. More likely to be at home all day, people on the State Pension need to keep their heating on and many rely more on appliances. 

While the government is introducing schemes to offset energy price increases, this adds to a confusing patchwork of measures. There may be help available for pensioners with energy costs but the situation will cause stress and a sense of insecurity at least. 

How to protect an income reliant on the State Pension

For pensioners who have not been able to provide extra income for themselves, it’s not too late.

• Double-check you are receiving every benefit and rebate available, such as Pension Credit or the Warm Home Discount. You could call Independent Age for advice on this.
• Consider earning a little money, if possible, to top up the State Pension.
• Create a budget. Saving a little here and there might help you to beat inflation until it is under control again.

If you’re not old enough to claim the State Pension yet, it’s clear that making sure additional forms of income are available when you retire is a good move. This could be a workplace or private pension. In addition, set up a long-term savings plan. For some, investing is a way to build up wealth for retirement years.

It’s important to make sure that you are not facing unmanageable credit card debt on the State Pension, so consider switching to a 0% balance transfer credit card if you are approaching retirement. 

The State Pension will struggle to carry any extra baggage from debt, so it’s a good idea to get help now if this is a problem. 

The post Triple storm for State Pension as inflation hits appeared first on The Motley Fool UK.

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Marcus Rashford is a prominent campaigner in support of underprivileged children in the UK and he’s already been awarded an MBE for his work. Now he’s teamed up with NatWest Bank to train teenagers to manage their money with more confidence. 

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NatWest and Marcus Rashford on the same side

Since 1994, NatWest has been running a programme called MoneySense. This has helped more than 10 million young people learn about personal finance both in school and online. Therefore, the bank has shown a commitment to education about money.

Approaching NatWest, Rashford asked to collaborate on a new programme that would “get out into underserved communities”.

He said that the subject of money caused stress and anxiety at home when he was growing up. In addition to that, he explained, “We had to travel out of our community to find our nearest bank branch. Most of us dealt in cash. Having carried out insight sessions across the UK in the last couple of months, it became obvious that my experience was not a rarity. Children are fearful of talking about money.”

The new programme will begin with pilot sessions in London and Manchester before a national roll-out. NatWest claims research indicates that teaching about money in schools is insufficient for children from low-income homes. As a result, NatWest and Rashford have designed a framework of support for young people that involves reaching out through mentors. 

Connecting with young people from low-income households

Brought up by his mother Melanie Maynard in a single-parent household, Rashford was very aware of his mother’s financial struggles. She juggled multiple jobs in order to put food on the table. This experience led to Rashford’s successful campaign to provide vouchers for free school meals.

Rashford is considered a great role model for young people who are hoping to achieve their goals. He has shown that this is possible despite a difficult financial start. 

Successfully managing a bank account, applying for a credit card, building up savings and investing are skills that can only be taught in families who have the means to do so. In Rashford’s view, many young people feel that financial services are not for them. He said, “We need to break down boundaries, particularly where it relates to the perception of a bank and who they are catering for.”

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Children, money and stress

NatWest’s MoneySense online resources already acknowledge that anxiety about money can stall financial confidence. Most families won’t qualify for Rashford’s help. However, there are also tips and advice on talking to teenagers about money from MoneyHelper.

According to Alison Rose, NatWest Group CEO, “Many young people and their families see money as something to worry about, instead of as a positive tool for them to thrive – that’s something we must seek to change.’

Financial education

This initiative shows that NatWest is concerned about the financial future of many young people in the UK. Limited access to banking in some areas and communities doesn’t help.

Of course, learning about money should be a lifelong process. Beyond the basics, there’s a lot to take in, such as how to apply for a balance transfer credit card, or set up a share dealing account. 

With cash becoming less accepted and harder to get, perhaps Marcus Rashford is right to encourage banks to make their services genuinely accessible to all families.

The post Marcus Rashford: “Children are fearful of talking about money” appeared first on The Motley Fool UK.

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Side hustles grow organically, from very small beginnings. The nature of a side hustle may not be big business, but even so, there can be some essential start-up costs or ongoing expenses. Applying for a business credit card is one way to get funding and develop your side hustle into something more profitable.

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Is a business credit card the right choice for a side hustle?

First of all, it’s essential that you’re making enough money in order to meet any repayments. Setting up a full-time small business involves making a business plan, but side hustles are different. The ideal side hustle is flexible rather than a full-time commitment. It’s important to think carefully about borrowing. 

Many people begin a side hustle with no clear idea of how successful they are going to be. That’s fine if the only outlay is time. In order to get a business credit card, you need evidence of sufficient business income. Alternatively, you must be able to forecast convincingly how much money you are going to make. It’s not a good idea to borrow money without a reasonable commitment to keeping your side hustle going. Borrowing can be a positive move if your intention is to expand.

For those who are ready to make their side hustle more central, a business credit card could help with the costs of that transition. 

When should you apply?

For a new venture, it’s better to wait before applying for a business credit card if you have no essential costs early on. Once the profits start to roll in, you might benefit from a flexible way to borrow money in order to build your side hustle.

In addition, you may be able to get 56 days interest-free credit. When you need help with cash flow, that could be a good time to apply. 

Is it easy to get a business credit card?

Independent contractors, freelancers and sole traders are eligible to apply in their own name, as long as they are registered as self-employed. In practice, it’s not so simple to get credit for a side hustle.

Each provider will have conditions that might include a minimum turnover, a business bank account or other stipulations that could be hard for a side hustle to meet. For example, the Barclaycard Select Cashback Business Credit Card is only available to those with a turnover of over £10,000 or more. Others, like the Capital On Tap Business Rewards Credit Card, are exclusively for limited companies. 

One way to get a business credit card is through the bank you already have an account with. For example, you can get a Business Credit Card if you have an account with Santander.

There are advantages to persevering with finding and applying for a suitable buisness credit card:

• Some of the rewards and incentives can be very tempting.
• It’s easier to separate your business and personal spending and be more organised.
• You can begin to create a positive credit rating for your business.

You might want to think twice about an additional credit card if you have a tendency to overspend.

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Is a personal credit card a good choice for funding a side hustle?

As a sole trader, you are personally liable for business debts. Business credit card repayments on top of personal borrowing could seem risky. This is especially true if one of the reasons you started a side hustle was to pay off debts. Your personal credit score will be taken into account as well. 

It’s still possible to have a separate card for your side hustle, even if it doesn’t have the word ‘Business’ printed on the front. An existing credit card, or a new credit card with 0% on purchases, can still offer rewards and should be just enough to pay for start-up costs, like tools, equipment and materials.

Any credit card can help to separate side hustle costs from personal spending. Then you can continue the habit when you become eligible for a business credit card or open a separate bank account.

You can’t use a business credit card for personal expenses, but there’s nothing to stop you from doing it the other way around. 

Is it better to avoid borrowing money for a side hustle?

It’s wise to try saving money to fund your side hustle in the first instance and for as long as it’s still at the stage of being a hobby that makes a little cash. 

For very new and micro side hustles, there may be more suitable ways to pay business costs and expenses, which should be small.

The post Can a business credit card boost your side hustle? appeared first on The Motley Fool UK.

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Electricity bills are going up, and it may be difficult to bring the cost down just by switching your supplier. You might get a better electricity deal on a comparison site, and it’s definitely worth checking. However, the price of running electrical appliances is now far from cheap. 

If you have a busy lifestyle, it can be hard to keep track of your electricity use. Unless you know which appliances are making a real difference to your electricity bill, switching a few things off might not make a significant difference. Therefore, it’s worth knowing which electrical appliances are the biggest offenders in terms of cost. 

Here are five appliances that could have a noticeable impact on your electricity bill.

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1. Electric heating 

It’s crucial for the very old and very young to keep warm, no matter how much electricity costs. Electric heaters can be essential on very cold days, but leaving an electric heater on instead of wearing warmer clothes can be very expensive.

Heating water with an immersion heater is also very costly, so take care when setting the timer and only have it on for precisely as long as you need to.

Heating a home entirely with electric heating can be challenging financially. Homes with storage heaters are likely to be on an Economy 7 tariff, with cheaper electricity at night. Nevertheless, it’s a good idea to keep up to date with the weather forecast so that storage heaters are not turned up to the max on warmer days. 

2. Electric showers

The more you shower, the more electricity you use. Health experts agree that it’s not necessary to shower every day. In fact, it can be bad for your skin to shower too often. By showering every other day, you can make a saving of 50% on the cost of using an electric shower.

Save even more money on electricity by letting your hair dry naturally rather than using an electric hairdryer.

3. Tumble dryer

It’s great to be able to dry clothes in a couple of hours, but you can make huge savings on your electricity consumption by managing without. Of all electrical appliances, the tumble dryer represents the most unnecessary use of electricity for many households. Using a dryer twice a week can cost well over £100 per year.

Aim to line dry in summer and invest in an indoor drying rack for cold and rainy days.

Using your washing machine less often but with larger loads and at a lower temperature will also save on electricity.

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4. Electric oven and hob

If you want to spend less time cooking, saving money on the electricity bill is a worthy excuse. When you do have to switch it on, it’s all about reducing cooking time. Using the right size pan for what you’re cooking and switching on the right size ring for the pan can help. Using pans with lids to keep the heat in and only using as much water as is needed when boiling can also reduce electricity use. 

In the summer, salads are more appealing (and could even be home-grown). It’s worth investigating other methods of cooking with electricity that are cheaper and easier to use than an electric cooker, such as a slow cooker or an air fryer. Smarter cooking appliances should be available secondhand on eBay or Facebook Marketplace.

5. Electric kettle

Fancy a cup of tea? It’s better to make a pot and save electricity on that second mug. Electric kettles, as with any electrical appliance that heats water, are not cheap to use, so you can save by never boiling more water than you need. 

Electricity savings that make a difference

Any appliance that involves creating heat gobbles up a lot of electricity. Using a smart meter to track how much your electric appliances are using can help you identify the biggest culprits.

Replacing light bulbs and appliances with more energy-efficient choices will save electricity over time.

Thinking twice before using electricity-guzzling appliances could lead to significant savings that could be used to grow your emergency fund or build your savings.

The post Switch off and save: 5 appliances that use lots of electricity appeared first on The Motley Fool UK.

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In response to uneven inflation in supermarkets, writer and campaigner Jack Monroe announced that they intend to create a different measure for inflation in food retail, “…along with a team of economists, charitable partners, retail price analysts, people working to combat poverty in the UK, ex-staff from the Office for National Statistics and others who have volunteered their time and expertise, I am compiling a new price index.”

Apparently, the effects of inflation are not being experienced equally by everyone at the supermarket. Jack Monroe warns that supermarket value ranges are disappearing, or are no longer as cheap, while prices in some other ranges are more stable.

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Are inflation measurements the same for everyone?

The Consumer Prices Index includes a range of goods – basic, non-essential and luxury. This doesn’t fully reflect the effect of inflation on those who can only afford essentials. That’s why, for some people, rising food prices make it seem as though inflation is much higher than 5.4%. 

The Office for National Statistics admits that with regard to food prices there is a “relatively high variation in observed price changes between the individual goods in this area.” Therefore, while non-essential goods are included in the measurements that help to calculate inflation, it underestimates the effect on people who are not in a position to afford non-essential goods.

This is especially the case when food prices are very unstable, but prices of luxury goods are up by only a small amount.

Is inflation only a problem for people on a low income?

It’s easy to cut back on spending if there are cheaper products. That becomes impossible when you are already buying the cheaper products to start with. Using savings and credit cards can help out in times of temporary price inflation. Unfortunately, this is not ideal or possible for all. Those with very little or no disposable income have nowhere to go.

If your budget follows the 50/30/20 budget rule, where almost half of your income is saved and disposable, then it won’t seem to matter too much if some of the spare half is spent on essentials. Nevertheless, continuing and excessive price hikes will be digging into your savings or other expenditure to a certain extent. You might need to put your savings in a higher interest account to offset. 

Are some supermarket price rises exceeding the current inflation rate?

Supermarkets are able to spread their costs around all their ranges. So while you might not notice a price increase on a luxury ready meal, there may be an extra 20p on a tin of baked beans. Therefore those able to pay more could be cushioned with smaller percentage price rises. Supermarkets can use prices to attract the type of customer they prefer.

On a Twitter thread, Jack Monroe lists a rise in the price of the cheapest pasta from 29p to 70p, peanut butter from 62p to £1.50 and rice from 45p to £1. This represents a very significant percentage increase above inflation on staples. 

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What are the alternatives to supermarket inflation?

While there is competition between supermarket chains, there is less competition with supermarkets on the whole. Therefore, pricing habits can be replicated across the big supermarket chains. For example, when one ditches their value range, another follows suit. Many items, like strawberries, are priced at a flat rate and rounded up to the nearest pound, whatever the season.

There are three ways to challenge the distribution of price increases in supermarkets:

1. Shop elsewhere. Markets and independent high street shops sometimes offer much better deals than supermarkets.
2. Switch to one of the cheaper supermarkets, like Aldi, Lidl or Iceland.
3. Refuse to pay higher prices on selected goods and choose different products.

In Dario Fo’s 1974 play Can’t Pay? Won’t Pay!, a group of women refuse to pay for their shopping because of excessive price rises, and carry off their goods for free. They ignore the supermarket manager’s explanation that the inflation is due to ‘market forces’, claiming, “We’re the market forces.” While Dario Fo was rightly satirising the fact that food pricing can be a political choice, this reaction would get people in trouble in real life.

Should everyone be worried about inflation?

Both producers and consumers should have some influence on the price of essentials, as well as retailers. With consumers shopping in the same supermarkets all the time, or not taking note of prices, increases above inflation become much easier for supermarkets to implement. 

You may not need to dip into your savings or rely on your credit card for the weekly shop. Nevertheless, it’s still worth questioning where your money is going.

The post Inflation: who pays the most? appeared first on The Motley Fool UK.

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With house prices continuing to rise, the prospect of owning a home is a distant dream for many. However, renting from a private landlord isn’t the only alternative to buying a house. In fact, thinking out of the box could help you save enough for a deposit on your own home.

Renting from a private landlord is expensive and insecure. In addition, there are restrictions on how you live your life. You don’t get to choose the décor, you probably won’t be allowed to keep pets, and there are regular inspections. It’s not surprising many people are anxious to escape private renting, despite high house prices.

If you’ve had enough of the rent trap, some types of accommodation can provide a substitute, or a stepping stone, to owning your own home. 

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A home without paying high house prices

If house prices are well beyond your income, there are other long term options.

1. Rent a property on a country estate

Large landowners with stately homes often have properties available to rent on their estates. These are usually long term lets and therefore more secure and more like home. The properties might be on the grounds of the estate or in the local village. If you like country living, this is definitely an option to consider if a mortgage is out of reach due to high house prices.

The National Trust is one large landowner that rents out properties to tenants long term. However, bear in mind that the application process for these properties can be very competitive.

2. Lower house prices with shared ownership

You can purchase a property gradually through shared ownership. Starting with a share of just 10%, you pay rent on the rest. Then you gradually buy more shares when you can afford them. Many of the properties are new builds.

It’s still possible to sell your property if you want to move. The availability and terms and conditions are dependent on the area.

3. Live on a boat

Narrowboats are available to buy for a fraction of the price of a house or flat. You would have to be prepared for a different kind of lifestyle, but it’s a way to own your own home. An advantage of living on a narrowboat is that you can change your location whenever you feel like it. Council tax is very low, or non-existent if you keep moving every few weeks.

There are mooring fees to consider as an extra expense, which are particularly high in popular areas such as London. Boat prices are lower than house prices, but there is a lot to learn about boat life, including the cost of maintenance and insurance, before making a commitment. 

4. Rent from a housing association

Unfortunately, there are very long waiting lists for social housing. If you are in danger of being made homeless or otherwise vulnerable, you might be nearer the top of the queue. There’s no harm in putting your name down on the list, just in case.

It’s cheaper to rent from a housing association. If you are able to get this kind of property, there are different types of tenancy agreements, with some ensuring a tenancy for life.

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Temporary alternatives to high house prices and rent 

Do you want to focus on saving money for a future purchase? Here are some short-term solutions.

5. Live with family or friends

Very few people are enthusiastic about living with their parents in adulthood. However, as a temporary measure, it can give you time to save up for a deposit. Sharing with a sibling or friend as a lodger is another solution that might be less expensive. 

If you can’t bear the thought of sharing accommodation with your family, perhaps they might let you park a caravan on their property while you save.

6. Find accommodation with work

There are lots of careers that come with accommodation, which is sometimes free. These include working on a farm, in a boarding school in the UK or elsewhere, or as a nanny or live-in carer.

If you like the idea of a Downton lifestyle, there are still employment opportunities with wealthy families, for single people and couples, that come with accommodation. 

7. House sitting 

Looking after someone else’s home and pets while they are on holiday is a cheap way to enjoy a new space for a while. House sitting provides you with homes for free while you save money. You could combine this with staying with friends or family to fill in the gaps. 

House prices by area

House prices may not be unaffordable for you in every area of the UK. Keeping your geographical options open might mean a shorter period of time renting and saving up.

The post House prices too high this year? 7 alternatives to private renting appeared first on The Motley Fool UK.

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A maxed-out credit card is one that has reached its credit limit. It happens to those of us who are not the most organised with our budgeting and spending habits.

It’s not a great idea to keep credit cards in a maxed-out state for long. In fact, it’s important to do something about it as soon as possible.

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How easy is it to max out your credit cards?

The most obvious way for credit card balances to reach the limit is through overspending. This can be the result of regular overspending or one-off spending on a special occasion like a wedding. Overspending can happen suddenly, over a few weeks or months, or gradually creep up over a long time.

Without savings, many of us use a credit card when we encounter an unexpected expense, such as car repairs or a bill from the vet.

For those who can’t cover their monthly expenses through their income, credit cards can plug the gap. Unfortunately, this sometimes only makes things worse.

In some cases, you can max out a card because your credit limit is too low. However, it’s crucial to think carefully before asking for a higher limit. You may be able to afford extra borrowing now, but a change in circumstances could affect your ability to pay in future.

Why are maxed-out credit cards a problem?

First of all, a maxed-out credit card is not good because you can’t use it until you reduce the balance. Furthermore, if your balance exceeds the limit, then you will face a charge. 

If you borrow all the available funds on your credit cards, the minimum payments alone could be too high. This is especially annoying if you are paying lots of interest on your purchases. 

Borrowing up to the max on a credit card can also affect your credit score. Ideally, you should only borrow up to 30%, and no more than 50%, of your credit limit. Lenders will also be interested to know whether your overall debt to income ratio is acceptable, particularly if you are applying for a mortgage.

How can you get your credit card back in use?

High minimum payments on maxed-out credit cards can make it difficult to pay off the debt quickly, which can be very frustrating. Here are a few ways to get your credit card debts paid off as fast as possible, and avoid maxing them out again:

• Keep saving. It’s a good idea to build up an emergency fund so that you don’t need a credit card for unexpected expenses.
• Transfer the balance. If you are paying interest on your card, the first step is to transfer as much of the balance as you can to a 0% balance transfer credit card.
• Create a budget. Make savings in your monthly spending to put towards credit card debt and avoid the need to borrow more.
• Make extra money to throw at your credit card debt. Start a side hustle or work extra hours to help pay off the debt.
• Set up a direct debit that is more than the minimum payment each month.
• Use extra income whenever you can towards the debt.
• Don’t use the card again until the balance is well below 30% of the limit. 

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What if you can’t afford the minimum payments?

Overspending on credit cards can result in monthly payments that exceed your budget, leading to a spiral of further borrowing in order to keep afloat. 

Credit cards are not a priority debt, so it’s important to pay for essentials first. Credit card companies can help customers who are genuinely struggling, or in persistent debt, by:

• Offering a payment holiday
• Suggesting a payment plan
• Reducing the card’s interest rate 

If you are unable to cover day-to-day expenses due to credit card debt, then it’s time to speak to an adviser about your options. They can help you create a budget and find a solution. Bear in mind that debt relief schemes can prevent further borrowing for up to six years and will affect your credit score.

It’s a good idea to deal with high credit card balances before you get to that stage, if possible. Once your credit record is poor, the only options are high APR credit cards for bad credit.

Can you change your credit card habits?

Grab your paper credit card statements, or find digital versions online. Looking in detail at your spending will give you a clue as to how you reached your credit limit in the first place. It could be recreational spending – eating out, shopping, travel and hobbies. Perhaps you use credit cards for essentials at the end of the month. If not, one major expense could have caused the problem.

Analysing your borrowing will help to change your borrowing habits and stop your credit cards from getting maxed out again.

The post ‘I maxed-out my credit cards! What should I do now?’ appeared first on The Motley Fool UK.

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From April 2022, there will be a National Insurance rise of 1.25%. The extra money raised will be spent on the NHS and social care. Although the money will go to a good cause, some households may feel the pinch. 

Nick Drewe, founder of money-saving platform Wethrift, has pulled together five simple tips to rescue family budgets. These easy-to-follow strategies can help to offset the National Insurance rise and its effect on your finances in 2022. 

Best of all, Nick’s ideas show that you don’t have to give up on things you enjoy to save some cash. 

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1. Book travel tickets early

There’s no need to cancel travel plans to save money, just be more organised. 

Full-time workers on low to average incomes will see a National Insurance rise of £130 – £255 this year. By booking train tickets well in advance, it’s possible for frequent travellers to save more than this amount.

Nick from Wethrift advises booking between one and three months ahead. He explains, “A one-way ticket to London Paddington from Birmingham New Street today would set you back nearly £100, yet the exact same journey 12 weeks from now would cost just £31 if booked today.”

Travelling by rail can be a cheap way to enjoy a day out or visit family – if you plan ahead.

2. Look for discount codes before ordering takeaways

A rise in National Insurance doesn’t mean you have to miss out on your favourite takeaways. By getting into the habit of checking for coupons and vouchers, you can get some really good bargains.

Nick Drewe, a voucher expert at Wethrift, explains where to look for the best discounts:

• Check your emails for any promotional vouchers that may have been sent following your last order.
• Before clicking ‘checkout’ on sites like Deliveroo or Just Eat, it’s always worth a search on voucher sites for any discount codes or free delivery incentives.
• Deliveroo customers have the option to refer a friend, which will secure both of you £10 off your next order.

Other ways to save on takeaways include sharing portions, avoiding drinks and extras, and ordering less often. Or you could try cooking a fakeaway.

Perhaps the rise in National Insurance might lead to a healthier diet!

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3. Be smart with your energy bills

Being smart with energy is going to be very important this year with costs rising alongside National Insurance. Many of us don’t really look at our energy bills in detail or understand the small print.

Nick from Wethrift explains why understanding energy bills can make a difference. He says, “Some energy suppliers have been known to either make changes to tariffs or make mistakes when charging customers, so it’s always a good idea to check your regular household bills.

“Whilst there are often a lot of terms and conditions to read, attempting to understand the information related to your energy tariff and household consumption could help you keep the costs of your bills down.”

The Energy Saving Trust has some great advice about how to save money on your energy bills. In fact, it’s possible to more than cover the National Insurance rise with just a few simple adjustments to energy consumption. 

4. Time your supermarket trips wisely

If you really need to save money, visit your local supermarket at the right time. It’s possible to purchase discounted items that have to be sold that day.

According to Nick from Wethrift, “Supermarket workers will start discounting products that are about to pass their sell-by-date later on in the afternoon or early evening, so a food shop after work is the perfect time to grab a bargain.” Nick advises stocking up your freezer with reduced items so they don’t go to waste. 

There are often plenty of sweet treats on offer at the end of the day, like cakes and breads. As well as contributing to your grandad’s social care through the National Insurance rise, maybe you could pop round with a freshly baked bag of muffins!

5. Cancel any unnecessary direct debits

Finally, Nick suggests that now is a good time to go through your bank statement and ditch any superfluous regular payments. This could be subscriptions, memberships and other commitments.

A few pounds a month adds up to a significant amount over a year. The National Insurance rise for an average income is £255. That’s just over £21 per month. It should be possible for most of us to shave that amount off our direct debits.

In January, you may find that you want to cancel your Amazon Prime subscription after the Christmas rush. Make a list of essential monthly payments and non-essential ones. Try managing without non-essential commitments and see if you miss them.

If you really love spending money, at least try a rewards credit card to get some of your spending back!

The post 5 money-saving tips to beat the National Insurance rise appeared first on The Motley Fool UK.

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A Debt Relief Order is a very specific means of getting free from debt, and it may not be right for you. It’s important to discuss all available options with a debt adviser. They will help you find the right way forward.

Get in touch with any of these organisations for expert advice: 

• National Debtline
• Citizens Advice
• StepChange

It’s good to know that you are not alone in this situation. While average credit card debt in 2021 was just over a manageable £1,000 per adult, banks were still writing off as much as £4 million in credit card debt per day.

So, how do you get out of control debts written off without bankruptcy? A Debt Relief Order is one alternative.

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What is a Debt Relief Order?

A Debt Relief Order (DRO) isn’t just for credit card debt. It can cover tax and council tax arrears, store cards, money owed to utility companies, rent, overdrafts and loans. 

You can deal with debts of £30,000 or less with a DRO. 

With a Debt Relief Order in place, your debts are frozen for a year so that you don’t have to pay anything. If your circumstances are still the same after 12 months, the debts are written off. If not, other options to solve the problem (bankruptcy, a debt management plan or an individual voluntary arrangement (IVA)) are still available.

During the 12-month freeze, creditors are not allowed to demand payments and bailiffs will be called off. 

Who is eligible for a DRO?

A DRO is aimed at people who cannot pay their debts and have limited or no savings. If you have anything of substantial value to sell, you are unlikely to fit the criteria. 

To get a Debt Relief Order you must:

• Possess savings and items of value that are not worth more than £2,000.
• Have less than £75 per month after paying household expenses.
• Live and work in England or Wales (in the last three years).

Homeowners are not eligible to apply for a DRO. While Debt Relief Orders are suitable for renters, check your tenancy agreement for clauses about insolvency. It’s best to keep your landlord informed about the process if you are in arrears.

Anyone who is on the road to an IVA or bankruptcy will not be able to apply for a DRO. That’s why it’s important to consider a DRO as your first option. 

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How do I apply for a DRO?

There is a fee of £90 to pay before a DRO can be granted. This can be paid in instalments – it may seem difficult to get £90 organised when you are in circumstances that require a DRO.

It’s necessary to apply through an approved intermediary, who can be found through your debt adviser (like StepChange). An ‘official receiver’ handles Debt Relief Order applications. Once your adviser has helped you submit the paperwork, the official receiver makes a decision within 10 working days. 

How will a Debt Relief Order affect my credit score?

It’s inevitable that a DRO will have some effect on your credit rating, but anyone needing to apply for debt relief is unlikely to have an enviable credit rating anyway. One of the main reasons credit is declined is because of a high debt-to-income ratio. 

A DRO will show up on your credit reference file for up to six years. This will affect your ability to open a new bank account and get more credit. It will also have an impact on the likelihood of being accepted as a tenant. 

Should I consider getting a Debt Relief Order?

First of all, try paying down your debts for a month or two using these sensible measures:

• Budget and cut back on spending.
• Work extra hours or start a side hustle to deal with debt.
• Transfer credit card debt to a 0% balance transfer credit card.

However, avoid favouring one creditor or consolidating as this may make you ineligible for a DRO.

Ask yourself these questions:

• Am I failing to meet my family’s basic needs and still pay my debts?
• Is my credit score already badly damaged by my debts?
• Are debts affecting my physical or mental health?

If the answer is yes to any of the above, it’s worth exploring the possibility of a Debt Relief Order. If you don’t fit the criteria, StepChange, National Debtline and Citizens Advice can guide you towards the next best option. 

It’s important to remember that Debt Relief Orders are only one solution. There are plenty of other ways to get help with problem debt.

The post Debt Relief Order: how to cut and run in 2022 appeared first on The Motley Fool UK.

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