Friday, April 15, 2011
BANKS may be willing to talk to customers in trouble but according to experts, people should be prepared to be challenged on all aspects of spending.
Lenders have been saying for the last few years that anybody experiencing difficulty with their mortgage or loan repayments should come and talk to them.
They are willing to talk but, according to Frank Conway of MoneyCoach.ie, lenders will generally ask people to complete a personal budget planner or an income and expenditure budget.
"In completing a personal budget planner, prepare it so that it is accurate, thorough and up-to-date. If banks are working on a case-by-case review, then they will scrutinise each personal budget plan thoroughly so expect to be challenged," he said.
This news comes as figures from the credit union sector show that four out of five people either can’t pay or have just enough to cover their monthly bills each month. One in five people said they have just €70 leftover after paying their bills each month.
Simon Moynihan of comparison website Bonkers.ie said it’s not surprising to see that so many people have so little left at the end of the month.
"Big expenses we have no control over like our mortgage payments and our taxes just keep going up leaving us less for everything else. We’re finding that more and more people are looking to reduce the bills they do have some control over."
He said that if someone is feeling the squeeze, he would suggest they take a "good look" at their monthly bills.
"Quite often you can get the same service for less on the stuff you need like home energy, broadband, phone, TV and even mobiles. Shave a few euro off the cost of each and the savings can really add up," he said.
Mr Moynihan said consumers should never automatically renew their car, home and health insurance.
"Don’t just renew them, call other insurance companies first and tell them the type of cover you want — they’ll be happy to give you a quote. Most people can save a lot by doing this but surprising few actually do it," he added.
The credit union figures also show that of the people who have little money left each month, two-thirds say they are living to work as opposed to working to live. More than four out of five said they worry how they would cope in the future if unforeseen circumstances were to arise.
Mr Conway said that while some industry observers attempt to create sound bite solutions for the current malaise, the actual causes are much more complex.
"The underlying causes for the current problems can only be fixed with a radical overhaul of the current debt laws and a pickup in the economy which results in a reversal of the unemployment and underemployment problem. Ultimately, it is income that is the root cause of the majority of current problems," he said.
CONSUMERS should never settle for the first quote given by an car insurance company. The firm will almost always cut the price if the customer shows they shopped around for a better price.
With health insurance, consumers should make time to contact VHI, Quinn and Aviva and see what they can offer to suit what they need.
With home insurance, it is very important that people realise that the insurance is not taken out on the value of the house but on the rebuild costs. The Society of Chartered Surveyors (www.scsi.ie) has a guide to rebuild costs on its website. Contact the home insurance firm to clarify this if you are uncertain.
THERE are more than 70 gas, electricity and dual fuel tariffs available at the moment. With ESB now offering a dual package, consumers should find competition will heat up even more. The days of the simple energy deal are over and experts say the more traditional your deal, the more you pay.
Suppliers are passing on savings made using direct debits and paperless bills directly to the consumer.
WEBSITES are falling over themselves with discount offers for consumers. MyLunch.ie recently expanded outside Dublin to Cork and has deals such as two-for-one sandwiches at O’Briens or 15% off your lunch bill at Luigi Malones.
Another site that has become popular is www.citydeal.ie. Users can pay for heavily discounted vouchers for things such as spa treatments, archery lessons or laser teeth whitening.
Read more: http://www.irishexaminer.com/ireland/banks-will-question-spending-of-borrowers-in-crisis-151490.html#ixzz1K9lOxmi3