Budgeting - What a bank thinks you should spend.

blownalot

Hi

Apparently the banks have a list of what they believe everyone should be able to live on in a month. Both Debt Free Direct and Payplan have referred to these figures when I have been talking to them about an IVA and going through my Income and Expnditure.

Has anyone actually seen a copy of this or know where it can be found please? Even though both companies refer to it they quote different amounts e.g. Debt Free Direct say I am allowed £50 for phone costs but Payplan say only £20 is what can be agreed. For clothing Payplan allow £100 for a family of 5 but Debt Free Direct allow £63. I just want to be able to see if there is anything they aren't tellling me that I can possibly include.

Thanks
Blownalot

james32_uk

It's the debt company that sets it's own allowances. You'll normally find if there's anything you want to include/make higher there's something else somewhere they can make an increased allowance for to make up for it. eg medical expenses/hairdressing etc

blownalot

Thanks
Thats what I had suspected but they both referred to a list that all the banks have approved when I was talking to them. I thought that maybe this would have been something the British Bankers Association had put together for its members but I couldnt see anything on the BBA website.

I agree that they can be flexible - when they asked me about pets and I said I had one goldfish they said I was allowed £25 per month for pets (this is exactly the same as I am allowed for school lunches for one of my kids!). However one of them says internet subscriptions are permitted and one of them says its a luxury. I just wanted to see if anyone knew of a definitive list.

Blownalot

Macduff_3

Hi

The guidelines they are referring to are set by the British Banking Association and not by the Debt Management Company. There is an element of flexibility in them and CCCS for example are happy to go outside of the guidelines provided there is a genuine reason.

There are a lot of categories in the BBA guidelines, with minimum and maximum amounts for single people, couples and a child 'multiplier'. All figures are per month.

Food: £126-£168 (1 person)
£207-£276 (couple)
£54-£75 (per child)

Clothing: £18-£24; £22-£40; £9-£12

School meals/meals at work: £9-£12; £9-£12; £5-£6

School trips/activities: £5 per child

Sports, Hobbies & Entertainment: £15; £20; £10

Sundries & Emergencies: £10; £20; £10

Satellite/cable: £21 (basic package only)

Dentist/opticians: £13; £14

Medicines/prescriptions: £7; £10

Fuel & Parking: £130; £130

Spares & Servicing: £10 minimum

Telephone including mobile: £40; £50

Pet food & insurance: £20

Repairs & Servicing (household): £15; £25

Mirtos

I might be wrong about this, but aren't debt free direct a company that charge a fee or, worse still, a consolidation company? :eek: you'd be better going with one of the free debt charities like cccs. Apologies if I'm wrong!

Tootsie_Roll

Macduff wrote:

Hi

The guidelines they are referring to are set by the British Banking Association and not by the Debt Management Company. There is an element of flexibility in them and CCCS for example are happy to go outside of the guidelines provided there is a genuine reason.

Actually the figures are nothing to do with the BBA or indeed any DCA.

I think what is being referred to are the figures from the Common Financial Statement. These are agreed (by all the banks, dca's, cab, money advice etc etc etc) amounts that a family can expect to pay for each individual item. What should be happening is that any money advice organisation should query any amount over the norm and get an explanation and submit with the SOA when making an offer of payment. Also money advisers should not be telling people what they can make an allowance for e.g. should not put £21 down for sky if not using it although this always seems to happen.

Macduff_3

blownalot wrote:

Thanks
Thats what I had suspected but they both referred to a list that all the banks have approved when I was talking to them. I thought that maybe this would have been something the British Bankers Association had put together for its members but I couldnt see anything on the BBA website.

I agree that they can be flexible - when they asked me about pets and I said I had one goldfish they said I was allowed £25 per month for pets (this is exactly the same as I am allowed for school lunches for one of my kids!). However one of them says internet subscriptions are permitted and one of them says its a luxury. I just wanted to see if anyone knew of a definitive list.

Blownalot

CCCS allow the internet but advise you to get a broadband package at the cheapest price you can. We like our clients to use the website to audate their balances etc so we'd be hypocritical to disallow the internet!!!

The list of things that have no definite guideline but are ruled by common sense are: laundry/ dry cleaning; newspapers/magazines; appliance rental; church/charity; hairdressing; medical/accident insurance; childcare; pocket money; travel expenses (not car).

Macduff_3

Tootsie_Roll wrote:

Actually the figures are nothing to do with the BBA or indeed any DCA.

I think what is being referred to are the figures from the Common Financial Statement. These are agreed (by all the banks, dca's, cab, money advice etc etc etc) amounts that a family can expect to pay for each individual item. What should be happening is that any money advice organisation should query any amount over the norm and get an explanation and submit with the SOA when making an offer of payment. Also money advisers should not be telling people what they can make an allowance for e.g. should not put £21 down for sky if not using it although this always seems to happen.

CCCS have to adhere to the guidelines as we are strictly quality monitored - if we screw up it can severely affect the way the clients proposal is treated by creditors. We do not allow clients to budget for things they do not spend (eg Sky) and if an item of expenditure suddenly appears on the budget (eg Sky, car finance, tobacco) we are well within our rights to close the plan. We encourage clients to be realistic. We do not like clients to underbudget or overbudget if there is not a reasonable explanation.

Creditos hate CCCS budgets because they are so detailed and because we do not let clients take the mick they find it very difficult to challenge them.

blownalot

Mirtos
Thanks. You are correct that they charge a fee but I have been referred to Debt Free Direct by CCCS as I don’t think CCCS arrange IVA’s. I don’t think there are any truly free providers IVA’s, they either want a payment from me upfront or they take a part of what I pay each month before they pass it on to my creditors.

I only tried Payplan because Debt Free Direct have been absolutely useless. It’s taken 4 weeks (and numerous phone calls from me) just to get the initial paperwork from them and even then they have shown all my outgoings as being in $ rather than £. I am slightly worried that if my SOA is shown in $ now that somewhere down the line someone is going to take the $ amount and try to convert it to £ giving me even less to spend. It’s just sloppy and doesn’t fill me with confidence for what they are going to be like in the future.

CCCS were fine and I would definitely recommend them.

Blownalot