Tom and Joy chatted to Ben Mai from Christians Against Poverty. He shared tips on whether or not you should take out a loan and touched on needs vs wants.
Check out the interview here
Extra info from CAP:
What would CAP say to people experiencing financial changes or uncertainty at this time?
- · It’s natural to be experiencing worry and uncertainty at this time, and healthy to talk about how you’re feeling. The govt has set up a number to call for free any time to talk to a trained counsellor. That number is 1737.
- · The good news is people can be proactive with their finances. In terms of money management tips for at this stage, I have two tips to start off with and will go into more next week.
1. Avoid taking out loans
- · We know people with low credit scores have been rushing to get high-interest loans* as the economic impact of COVID 19 hits home, including seeking loans to buy food.
- · When the pressure's on and money is short it can be tempting to "solve" it all by taking out a quick loan. But they actually make matters worse next week, especially pay day lenders who have high interest rates – with percentage rates in the hundreds! To go forwards rather than backwards, THINK: Can I reduce my costs?
* According to Keith McLaughlin, chief executive of the Centrix credit reporting agency.
** Credit scores run from zero to 1000, and scores of below 400 indicate people with a history of missing loan repayments, or payments to the likes of power companies). There has been a 23 per cent increase in applications for personal loans in the past five weeks among people with credit scores of 299 or below**
2. Reduce costs: Needs vs wants
- · A good way of reducing costs is to make two lists: Needs vs Wants. It sounds basic but we do need to remind ourselves that:
- A need is something we must have like shelter and food.
- A want is something we might like to have but we don’t need it right now and can survive without it.