Nail Polish Lasts Really Well in the 'Fridge...

The trouble with redundancy money is that it can make you feel quite rich. My personal ‘Gosh I’m rolling in it’ feeling lasted until the end of the first month when my bank account and credit card statements came in and I got a reality check instead of a salary cheque.

It was summer, and hot and sunny, and I‘d spent most of that month enjoying all the unaccustomed free time that comes with not having to get up and go somewhere. I’d signed on, of course, and I was looking at advertisements and working on my CV, but I didn’t feel any sense of urgency because, of course, I had all that money - more money, actually, than I'd ever had in my bank account in my life at any one time. In fact I felt as though I was on some kind of well-deserved holiday, that I all the time in the world to find another job, and that my future was assured and would just take care of itself. I drifted into the library, trawled the bookshops, took picnics to the park, and wandered about looking at stuff, feeling secure and rich - and, of course, spending money.

I didn’t actually spend anything that I wouldn’t normally have spent in an ordinary month - but I’d never appreciated exactly quite how much I was spending in an ordinary month until I saw the hole I’d made in my redundancy money in under 30 days.

I spent a whole afternoon typing out a spreadsheet and trying to work out where that money had gone to, and when I saw the figures in black and white (or, to be truthful, mostly in red given my circumstances!) I realised that I couldn’t even remember spending most of it - or even identify exactly what I’d bought with it, or where.

It was tracking down the nail polish that woke me up to the real world. I’d bought some Revlon nail polish in one of many tours round the shops; and when I looked at the price of it I realised that I’d spent exactly one tenth of my Job Seekers allowance on a small bottle of pink paint that I didn’t really need because I already had lots of small bottles of pink paint.

It was then that I also realised that my benefits were a small drop in the big bucket of my expenses; that if I kept that up I was going to be in real trouble, and that I hadn’t been really concentrating on getting a job, because my redundancy money had given a false sense of security.

I carried on carting around credit cards for another week after that, and then went back to a cash economy. Credit cards made it too difficult for me to keep track of what I was spending. Actually, they made it too difficult to stop spending, full stop. Paying cash makes you think about the immediate price of whatever you're looking at. Not having enough cash with you also gives you time to realise that you likely don't need whatever you're looking at, and probably don't actually want it, either.

It’s usually debt advisory agencies that encourage people to set out a budget on paper, cut out all the extraneous stuff and leave their credit cards at home, but it's actually good advice for anybody – and it’s particularly good advice if you happen to be ‘temporarily self-employed’. You don’t have to cut out everything that makes you feel better or more confident about yourself and the way you look, but you might need to develop a new set of habits - and be a lot less wasteful.

Nail polish lasts really well in the ‘fridge!

Emily - http://www.therapypartnership.com/

Benefits, Banks, and Bandits

Whilst you’re working out exactly what benefits you’re entitled to and going through the process of getting them, you need to give some thought as to where you are going to put the money when it begins to arrive.

That can be a very important decision. To explain why, I’m going to tell you a sad and rather unpleasant story, and then talk to you about something called ‘The First Right of Appropriation’. Don’t go away. You need to hear the story – and you certainly need to know about your ‘First Right of Appropriation’.

Anyway, let’s get on with the story – which is, of course, a true story.

A self-employed acquaintance of mine – we’ll call him John – had a run of financial ups and downs over the years (most artists and designers do, however talented and popular they happen to be) but found himself in real financial difficulty once the present recession began to bite. John isn’t young man – he was 70 plus when this sorry tale began (and incidentally had a heart-bypass operation in the middle of it!) – so he qualified for various benefits quite easily, including Housing Benefit and Council Tax.

John arranged for those benefit monies to be paid directly into a bank account he held jointly with his wife. He had been a customer of the bank for many years and had an overdraft facility there which he used to run his business, so he had no qualms about using the joint account to receive his benefit moneys.

John’s wife had a credit card in her own name from the same banking organisation, and in better times John had arranged for the monthly payments due on the card to be taken directly from their joint bank account. John made that arrangement on-line, and when things began to get really difficult for him, he attempted to cancel it, intending to get in touch with the creditor to make an offer to pay instalments he could afford. He found that he couldn’t cancel it.

When work dried up almost completely, and John and his wife were relying wholly on benefits to pay rent, Council Tax, and essential outgoings, John went to see his Bank Manager seeking help to cancel the on-line arrangement made with regard to the credit card. His Bank Manager professed to be unable to help him because the credit card wasn’t issued by the bank, but by an arm of the banking organisation over which he had no control.

Letters were written on John’s wife’s behalf to the credit card company, making it aware of the situation, but it nevertheless continued to remove benefit monies from John’s account every month in respect of instalments that were in fact almost wholly made up of interest.

John finally did what he should have done in the first place. He opened an account with the Post Office Savings Bank and had his benefit monies paid into that, thus ensuring that he could pay his rent, Council Tax and essential outgoings.

In the meantime, the credit card company continued to extract money from John’s bank account – effectively raiding his overdraft facility every month. Eventually, it was no longer able to do so; John’s Bank Manager took fright and converted John’s overdraft into a loan, repayable monthly at what might have been affordable rate had he been able to continue to work. That was, of course, virtually impossible; he hadn’t the money to spend on the materials he needed to work, because he no longer had access to an overdraft.

When instalments stopped because the overdraft facility was no longer there to cover them, the telephone calls from the credit card company began in earnest. That company had, of course, already been made aware of John’s situation – a situation that has since grown much worse due to the actions of his Bank Manager – but nevertheless, and despite letters and explanations, the calls continued.

I shall be talking about how to deal with such collection calls in another post. In the meantime, I want you to think about what has happened to John, draw your own conclusions, and feel able make your own arrangements accordingly – which brings me to ‘First Right of Appropriation’.

You can, of course, have Housing Benefit paid direct your Landlord, but if you don’t want to do that, and feel that Housing Benefit or other benefit monies may be at risk if they are paid into your regular bank account, then you can safeguard them by opening another account elsewhere. In my view, that is the safest way to proceed. In the alternative, however, you can rely on your ‘First Right of Appropriation’.

The Social Security Administration Act 1992 provides that certain benefits - such as Housing Benefit - are ‘inalienable’. Banks are therefore forbidden to use Housing Benefit (or in fact any other income related benefits) to repay an overdraft or any other charges because, effectively, the money does not belong to the customer, who is simply acting as an agent to pass the money along to, say, a landlord.

However, and that aside, your First Right of Appropriation means that even if your bank account is overdrawn, you can choose how ANY funds (in other words not just benefits) paid into your bank account are used, simply by claiming First Right of Appropriation.

To claim Right of Appropriation, you must contact your bank in writing with new instructions at least 7 days before the money is due to be deposited every time it is due to be deposited, and make it clear in your letter that the deposit is to be used for specific purposes. Otherwise the bank might simply disregard the request. It might do that anyway, but I’ll come to that in a minute.

A letter claiming First Right of Appropriation should contain various elements. Here’s a sample:

I am writing to advise you that £xxx will be paid into my account on xx/xx/xx. This is (e.g. Housing Benefit/Council Tax/other benefit).

I want to exercise my first right of appropriation for this money, which will be used for: (e.g. Rent £xx and/or Council Tax £xx and/or living expenses £xx).

I shall withdraw the money on the day that it is deposited for that/those purpose(s), and I should therefore be grateful if you would ensure that any other payments out of my account do not interfere with that withdrawal.

Right of Appropriation is something all banks should be aware of, but it’s very rarely used – and obviously it’s not something they’re particularly anxious to publicise. John’s Bank Manager may have known of it - he certainly should have known of it – but equally he may have chosen to be unaware of it. And that’s the problem with relying on Right of Appropriation rather than just putting your benefit money safely away somewhere else.

Effectively, your bank might just disregard your letter whether you send it more than 7 days in advance of the expected deposit or not - and just gobble up your benefit money. You would then have to complain, in writing, both to the bank and to the Banking Ombudsman. Eventually, of course, the matter would be sorted out because the law is quite clear on this point – but the sort-out could take several weeks and wouldn’t solve the immediate problem of what, for example, you would do about paying your rent.

If you’ve already experienced this problem, or are experiencing it now, you should write to your bank and to Banking Ombudsman quoting Section 187 of the Social Security Administration Act 1992, which provides that:

“Subject to the provisions of this Act, every assignment of, or charge on:

(a) benefit as defined in section 122 of the Contributions and Benefits Act;
(b) any income-related benefit; or
(c) child benefit,

and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors”

If you haven’t experienced this problem – and even if you never anticipate experiencing it – you might still want to make arrangements set up a specific account to handle your benefit moneys with a bank other than that you generally use. You really need to ensure that you will be in a position to pay secured and priority creditors, because you can get into quite serious trouble if you don’t. Banks and credit card companies are neither secured nor priority creditors; they can take action against you, of course - but defaulting on payments to secured creditors can have much serious consequences. As talking about bad news on this blog usually falls to me, I’ll tell you all about that (and what you need to do to avoid falling foul of the wrong people!) in another post.

In the meantime, you can find a lot of information about how to reclaim unfair charges at http://www.britishconsumer.com/ (it’s a free – and very useful – site). If you need to contact the Banking Ombudsman, you can call the consumer helpline on 0845 080 1800 or 0300 123 9 123 (office hours) or on 0300 123 9 123 or 020 7964 0500 (these numbers may be cheaper if you use a mobile phone or a phone company other than BT, and will be "free" if you pay a monthly charge for calls to numbers starting 01 or 02). They’ll call you back if you're worried about the cost of calling them. In the alternative, you can email complaint.info@financial-ombudsman.org.uk or write to The Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London E14 9SR

Geoff

Don't Forget to Contact Revenue & Customs

You can’t get Working Tax Credit unless you are working sixteen or more hours a week, so if you’re made redundant (or start working less than sixteen hours a week) you to need to inform the Revenue – you can telephone the Tax Credits helpline on 0845 300 3900.

Working Tax Credit continues for four weeks after you finish work, and counts as income in respect of any means tested benefits you claim in that period. Council Tax, Housing Benefit and Education Benefit are all ‘means tested’ benefits, so if you are eligible to claim any of those benefits (or any other means tested benefit) and you claim them in the first four weeks you are unemployed, Working Tax Credit will have to be taken into account.

If you have a partner who works full time you can continue to get Working Tax Credit based on their earnings. Where that is the case you have a choice:

• You can let the Revenue know immediately you stop work. The Revenue will then reassess you straight away – and you should get more Working Tax Credit. However, if you then get another job in the same financial year you MUST let the Revenue know straightaway. If you don’t you will be ‘overpaid’ Working Tax Credit and will have to pay it back later.


• You can wait until the end of the financial year, and get any underpayment of Working Tax Credit as a lump sum, or have it added to your next year's tax credits if you are still getting them because your partner is working.

There is a lot of information about Working Tax Credits at http://www.hmrc.gov.uk/taxcredits - and you can, of course, get independent advice from your local Citizens’ Advice Bureau. The important thing, of course, is to ensure that you advise the Revenue that your situation has changed as soon as possible after you stop working.

There are several things to do immediately you are made redundant., but the first thing you need to do – obviously – is to sign on for Job Seekers Allowance.

Jobseekers Allowance is for people who are available for, and actively seeking, work. There are two types of allowance:

• A contribution-based allowance (JSA-C) which you can get for up to 26 weeks if you have paid sufficient National Insurance contributions. This allowance is not affected by redundancy or severance payments, but if you receive a pension from work the allowance is reduced by any amount over £50 a week.
• An income-based allowance (JSA-I) which you may be able to get if your income and capital are below certain limits. You cannot claim this allowance if you have a partner who works 24 or more hours a week or you have capital (savings) of more than £16,000. NOTE: A statutory redundancy payment counts as capital, but contractual redundancy or severance pay only count as capital up to the amount of the statutory redundancy payment you would be entitled to. You can work out the statutory redundancy payment you are entitled to by going to the Department for Business Innovation and Skills website and using their ready reckoner.

As you have not left your job voluntarily, you should be allowed to claim a form of Job Seekers Allowance straight away.

Once you have sorted out your Job Seekers Allowance, investigate the whole benefits system thoroughly.

The benefits system is very complicated, and it’s in your own best interests to make yourself aware of exactly what you are entitled to claim – or what other people in your household might be entitled to claim. Investigate in particular:

• Housing Benefit
• Council Tax Benefit
• Mortgage Assistance (you may get help with the interest part of your mortgage payments if you claim income related Job Seekers Allowance)
• Education Maintenance Allowance (young adults over 16 may be able to claim this allowance).

But don't stop there. Your local Citizens Advice Bureau will be able to help you find out what you and other members of your family may be entitled to claim, tell you where to get the appropriate forms, explain what documentary evidence you need to provide, and direct you to the right Government Department to make your claim.

Checking out the benefits system can be time-consuming, boring and depressing. You might need to fill in a lot of forms, gather together a lot of information, visit a lot of government offices, and answer a great many (actually quite intrusive) questions – but the results will be worthwhile because they will help you to find out exactly where you stand financially and come up with a reasonable survival plan.

Once you get your benefits sorted out, you will have some money coming in - it could be a derisory amount, but it's still money. And you might be able to stop worrying quite so much about how you are going to pay your mortgage or your rent or your council tax, or how you are going to manage to keep one or more of your children on at school...

Benefits aren't great – certainly no honest person is going to get rich on them - but they're better than nothing. And don’t forget! You are entitled to benefit. You've paid in – probably for years; there’s no need to feel bad about trying to get some of your own money back.

If you've already signed on and have not investigated what other benefits you might be entitled to apart from Job Seekers Allowance - make plans to it as soon as possible. What, for example, is the point of struggling to pay rent or interest on a mortgage if you don't need to?

Geoff

Exercise is Important

Before you decide that exercise is the last thing that's going to help you get back into mainstream employment, read this:

Exercise:

• helps you to relax
• helps you sleep better
• makes you more alert
• improves mental concentration
• may improve your intellectual capacity
• increases productivity
• generates vitality and confidence
• regulates your appetite
• improves digestion
• encourages and maintains a good erect posture
• tones up muscles and improves the figure
• increases physical strength
• keeps the joints supple
• improves your resistance to stress and disease
• is known to help asthmatics
• lessens the likelihood of sedentary diseases - arthritis, rheumatism, diabetes, backache
• prevents coronary heart disease
• increases cardiovascular activity
• reduces high blood pressure
• balances body and mind and promotes mental and spiritual development
• expands your social network

Everybody needs all of those things - and regular supervised exercise need not cost very much. Bog-standard municipal leisure centres are cheap, have just as much to offer as expensive private 'clubs', are often friendlier and nicer (albeit a lot less swish!) places to be, and the advice and help that you get there and the 'keep-fit', aerobic and yoga classes they give are just as good. And municipal leisure centres nearly always have bigger and better swimming pools and tend to offer swimming lessons and water aerobic classes more often than private 'clubs' - and that can be important if exercising in water is your best option.

Important things to think about:

• Choose a suitable activity for your age and ability that you think you'll enjoy - and that won't involve you buying equipment you don't already have! -and either join classes where you can get expert advice, or get books from the library that will give you relevant information.


• Decide where you are going to fit your exercise sessions into your day - and stick to it. Aim to exercise three to five times a week.


• Start slowly - and don't compare yourself with other people. What other people can do is immaterial; it's what you can do for yourself that matters.
  
• Don't forget that walking is actually wonderful exercise. Ask yourself whether you really need the car or the bus to get where you need to go - and if it's too far to walk, try to ride part-way and walk part-way. Try to walk somewhere every day anyway - even if it's only round the block or a quick tour of your local park or recreation ground - and think of it as part of your exercise program.

If you don't exercise, muscles atrophy, joints stiffen, circulation becomes sluggish, you can become short of breath at the slightest exertion - and you can get depressed. On top of everything else, you really don't need that. Exercise is as important to your health and well-being as food, water and sunshine. Make sure that you get some!

SAFETY FIRST: If you have never done any exercise, haven't exercised for some time, or if you are overweight, have high blood pressure, any heart condition, any chest complaint like asthma or bronchitis, or if you suffer from arthritis or back pain or any other problem that you believe could be adversely affected by taking exercise, you should consult your doctor before embarking on any exercise program. Your doctor will be able to advise you as to what you can and should do to improve your physical health and your resistance to stress and disease.

Emily - http://www.therapypartnership.com/

Positive Things to Do

Being made redundant has a lot of unpleasant mental and physical side effects - and over the last few months Emily and I have had plenty of opportunity to listen to people, learn how redundancy has effected them, and try to come up with some workable solutions.

Over a period, we developed a system of sorts to deal with the most common problems - loss of confidence; lack of motivation; negative thoughts and attitudes; feelings of worthlessness; vague (and usually entirely stress-related) symptoms of malaise; irrational feelings of guilt, and the fear that people experience when they believe that they've lost control of their lives and the secure future they've worked and planned for. It isn't a perfect system, but - as systems go, and given the evironment we're all having to work with - it isn't bad.

Over past posts we've talked about the system briefly, explained some of the basic causes of the problems people experience when they suddenly find themselves out of work, and given suggestions as what can be done to make those problems go away - or at least become molehills rather than mountains.

If you haven't read those posts, then the place to start is (obviously!) at the beginning, but the most useful one to read (or re-read) at the moment is 'Attitude Matters' because it explains why imposing a structure on your life makes it easier to stay motivated and positive and focused, and how important it is to think of yourself as 'self-employed' rather than 'unemployed' and to try to continue to live your life much as you used to, or as as most other people do - working from 9 to 5 Monday through Friday.

That section is particularly important at the moment, because Geoffrey is going to be taking over from us for a while very shortly, and he's going to be suggesting that you do quite a lot of work. Sticking to a standard working week, and accepting that being out of work involves thinking and acting like a self-employed person and working hard to make things happen will help you to get the best out of what Geoffrey has to say - and to stick to the system if things don't happen as quickly as you hoped they would.

Before I go away, there are a couple things that I'd like you to think about - and preferably do! - before Geoffrey starts filling your life with places to go, things to read, letters to write, and people to speak to:

Clean and organise your workspace, and either put away everything that relates to your old job, or get rid of it altogether. It isn't useful or particularly healthy to have things around your workspace that remind you of old job. The past is gone, and thinking about it won't change it. Focus on the future and dump the past in the bin. Keeping the detritus of the past hanging around where you can see or fall over it only encourages brooding and bitterness, and clouds the future. Your workspace is where you are going to work to make a future. Cleaning it up will help you to see it as a positive space that will help you achieve your goals.

Think about where in your day you can fit in two vital activities - exercise and positive relaxation. Emily will be talking tomorrow why you need to fit those things in, and what you can expect to get out of them.

Begin to use 'positive thinking' - and please don't tell me it went out with the ark. It didn't. It just got re-labelled and reincarnated as various new, fashionable (and very expensive!) therapautic systems. You don't need new, fashionable or expensive. You can DIY with something tried, trusted and free. Here's how:

Positive affirmations can take several forms, but right now you should concentrate on the on the three types of ‘I’ statement that are statements of self-belief:

• ‘I am’ statements are statements of who you are; positive affirmations of real traits or abilities that exist in you. For example: I am competent, I am strong, I am intelligent, I am talented, I am energetic, I am a good person, I am caring.


• I can’ statements are statements of your belief in your potential to change, grow and help yourself. For example: I can gain self-confidence, I can be strong, I can be assertive, I can be positive, I can change, I can heal, I can be a problem solver.


• 'I will’ statements are statements of positive change - ‘success prophesies’ or positive affirmations of things you want to achieve. For example: I will smile more today, I will take care of me today, I will feel good about me today, I will like myself better each day, I will take on only what I can handle today.

Choose a statement for yourself - 'I will succeed' would be a good place to start - and work with it for at least a week. Make it your first thought when you wake up in the morning and the last thing you think before you go to sleep. Think of it when you sit down to eat, when you take a shower, when you go for a walk, and when you sit down to relax. Repeat it as often as possible during the day. When you're done with that statement start on another one that's relevant to what you want to achieve at the time.

Don't think of positive thinking as being 'silly' or a waste of time. It works - and if you work with it, it will work for you.
Bill - http://www.therapypartnership.com/