Manage your money with a credit union budget account

If you have regular expenses that sometimes leave you short because they all come at once (could be household bills, cost of keeping your children happy out of school or car costs) a budget account could help.

Work out the annual costs and divide by 12. Pay that much into the credit union every month then you can ask for a cheque when necessary to pay for those items.

You’ll be charged interest when you have taken more money out of the credit union than you have paid in but it will only be 1% of the outstanding amount per month and you won’t pay anything when your account is in credit.

Get out of debt with MABS
(Money Advice and Budgeting Service)

Community First is helping a local credit union to pilot a scheme to help people who have built up debts and find it hard to manage their money.

We are working with Citizens Advice Bureau and other money advisers so that an excellent standard of money advice can be received and a realistic monthly budget agreed.

The person will then become a member of the credit union and pay a single payment to them each month (this can be broken down into weekly payments if required). The credit union will then disburse the money to creditors and the person knows that all the money they have left in their purse can be spent on day to day living.

Once debts are well on the way to being paid off a small credit union loan might be available to help the person to get through an unexpected large expense or a particular event such as Christmas.

If you take up this money management scheme you’ll also be encouraged to save a little bit every time you pay into the credit union so that you’ll have some savings to fall back on or borrow against once you are back in control of your money.

Responsibility for the money owing remains with the person who built up the debts – the credit union just helps you manage your money more effectively so that you don’t get into trouble again.

Did you know that if you borrow £300 from a doorstep money lender such as Provident you’ll pay them £495 over a year before the debt is cleared? The same amount loaned by the credit union will cost a little over £320 in total so you save nearly £175 if you stick to the agreement.

You mostly need to have savings in the credit union before you can borrow though so get saving soon!