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Banish those money blues

15 January, 2018Alison Pask

coins-currency-investment-insurance-128867OK, so it’s January. It’s cold and dark, we’ve all spent too much, eaten too much, drunk too much and it’s a long time until pay day. Whilst a bit of enforced ‘belt tightening’ may help our waistlines and our livers, our bank balances may well be suffering for a while to come.

Worrying about how we’ll get through the month might be our first concern. And then, longer term – how are we going to pay for the next birthday, holiday, detox? But while you may think that worrying about money is primarily for adults, you might be surprised to learn that 62% of young people also say they worry about money. And maybe with good reason, according to the LIBF’s Young Person’s Money Index many report coming into contact with potential scams and crime before they’ve even left school.

Parents are often the main source of information for young people – 79% of 15-18 year olds say their parents are their primary source of information about money, according to LIBF. That’s fine if parents are financial experts, but many of us are not. And are you setting the right example to get the best outcomes for your family? Is your financial knowledge as good as you think?

Take our New Year Money Quiz on some of the basics to find out!

  1. Which of the following is most likely to lead to financial difficulties?


    A. Creating a budget and sticking to it.

    B. Overspending.

    C. Prioritising spending so essentials are covered first.

    D. Using credit cards and paying the balance in full each month.


  2. What’s the simplest way of getting your money in order?


    A. Create a budget so you know how much money is coming in and what essential items you need to pay for each month, so you can see what’s left over.

    B. Just keep drawing out cash until the ATM says no.

    C. Use and abuse your credit card, just pay the minimum repayments and hope for the best.

    D. Ask family members for money when you run out.


  3. Which of the following will provide the most useful information to help someone to manage their money?


    A. Bank statement.

    B. Cheque book.

    C. Credit card.

    D. Debit card.


  4. Regular monthly payments for variable amounts are best paid by:


    A. debit card

    B. direct debit

    C. paying online when you remember

    D. standing order.


  5. Which type of borrowing arrangement is most likely to attract the highest interest charge?

    Borrowing using:

    A. a credit card

    B. a payday lender

    C. an unauthorised overdraft

    D. a store card.


  6. How are overdrafts supposed to be used by people? To borrow:


    A. small amounts for short periods of time

    B. small amounts for long periods of time

    C. large amounts for short periods of time

    D. large amounts for long periods of time.


  7. Typically, borrowing on a credit card is free, as long as the whole amount is paid back within a maximum of how many days?


    A. 30 - 39 days.

    B. 40 - 49 days.

    C. 50 - 59 days.

    D. 60 - 69 days.


  8. APR is:


    A. the rate of interest charged for borrowing money over a year

    B. the monthly interest rate charged for borrowing money

    C. I don’t know but the higher it is the better

    D. the total annual repayments I need to make.


  9. What happens if you don’t pay more than the minimum payment on your credit card bill each month?


    A. Interest will build up and your debts will take much longer to repay

    B. It will negatively affect your credit score

    C. You may be declared bankrupt.

    D. Your credit limit will be automatically increased.


  10. Why should you avoid borrowing from a payday lender?

       A. Borrowers can pay a lot in interest and fees if they miss a repayment date.

       B. They do not state the interest rate you’ll pay in their adverts.

       C. They only deal in long-term borrowing.

       D. They only deal with people who have bad credit.

Answers: 1B, 2A, 3A, 4B, 5B, 6A, 7C, 8A, 9A, 10A

Be money savvy

So how did you do on some of the basics? Maybe you got 100% - and that’s great! But do you put your knowledge into practice? Have you done a budget, got your bills in order and worked out what interest you’re paying on money you owe?

If you feel your financial knowledge and approach needs a bit of a refresh, there are lots of organisations who offer free impartial advice and money tools, such as budget planners, to help you get your finances in shape:


Citizens Advice

Money Advice Service

The Money Charity

The Money Advice Trust

National Debt Line charity

StepChange debt charity

Alison Pask is the Managing Director for Financial Capability and Community Outreach at The London Institute of Banking & Finance.