‘I’VE TAKEN OUT SEVEN PAYDAY LOANS’

Mum-of-one Rara Armstrong, 31, from Hereford, can’t stop shopping despite mounting debt money saving tips DITCH FIXED ENERGY MONEY SAVERS

“I’m not

working

right now as

I’m studying

Business and

looking after

my two-year-old son, Rudi. I’m

on benefits but I’m pretty bad

at managing my money. I’ve

taken out seven payday loans,

totalling £2,000, and I can’t

afford to pay them all back.

“I splash the cash like I’m

rich – buying clothes, beauty

products and treats for my son.

I also spend a lot on petrol as

I live quite far from the nearest

town. I’m an impulsive buyer and

have spent over £2,000 keeping

my house looking nice since

moving in six months ago. I’ve

also run up £2,100 debt on

catalogues and credit cards,

which I’m unable to pay back.

“If I want a holiday or a new bag

I have to get it, whether it means

getting a loan or borrowing cash

from a friend. I also like to make

sure Rudi is well provided for.

problems, so I wonder if I’ve

picked up his bad habits? Either

SARAH’S 3-POINT PLAN

1) SORT PAYDAY LOANS.

These are expensive because

of the very high interest rates

and could trap Rara in a debt

cycle – borrowing more to

repay the first loan. Rara should

consolidate the debts into one

personal loan with a long-term

payment plan and manageable

repayments. Sainsbury’s,

Clydesdale and Hitachi are all

offering £5k-£7.5k loans with a rate of around 4.4 per cent. 2) BE MORE DISCIPLINED.

The Money Advice Service has

a great budget planner, which

will help Rara see where she’s

making mistakes. She needs to

switch her mindset from being a

spender to a saver. Rara should

TOTAL:

£1,295

also speak to a debt professional

at Stepchange.org for help and

limit treats to every other month.

She can find the cheapest fuel in

her area at Petrolprices.com and

check supermarkets for bargain clothes, beauty and homeware. 3) TEACH RUDI GOOD MONEY

MANAGEMENT so he can avoid

these issues in the future. Free

app Jangle and website Go

Henry teach kids about money. Households on fixed energy deals could see their bills rise by up to £258 a year unless they move to a new tariff, according to uswitch. Plans from Extra Energy, Scottish Power, M&S Energy, Sainsbury’s, Co-operative and npower that expired on 31 January risk being automatically transferred on to a potentially pricier tariff. Shop around now to avoid a shock!