0:00:02 > 0:00:04Whether you're a spender or a saver,
0:00:04 > 0:00:08we could all do with knowing how to make the most of our cash.
0:00:08 > 0:00:12So we found simple advice for you to do just that
0:00:12 > 0:00:15and taken it to towns and cities right across Britain.
0:00:17 > 0:00:20Whatever help you need with your finances,
0:00:20 > 0:00:21we are Right On The Money.
0:00:22 > 0:00:24Hello and welcome to Right On The Money,
0:00:24 > 0:00:26the show that's all about
0:00:26 > 0:00:30helping you free up some extra cash without it becoming too complicated.
0:00:30 > 0:00:31Today, we're in the city of Leicester,
0:00:31 > 0:00:35which has had its fair share of attention over the last few years.
0:00:35 > 0:00:37Oh, yes, there was that small matter of finding
0:00:37 > 0:00:39and reburying King Richard III
0:00:39 > 0:00:41and some would say they've got a half-decent football team.
0:00:41 > 0:00:44Let's see if our tips today can get you in the Premier League
0:00:44 > 0:00:47when it comes to moneysaving. Here's what's coming up.
0:00:49 > 0:00:53With millions of us owing more on credit cards than ever before,
0:00:53 > 0:00:57we help one family face up to some tough home truths
0:00:57 > 0:00:58to tackle their debts.
0:00:58 > 0:01:00I feel like we're bad examples.
0:01:00 > 0:01:03This is not the right way to go about things.
0:01:03 > 0:01:07And how to transform your wardrobe without it costing a penny.
0:01:07 > 0:01:11I'm definitely getting the same sort of thrill out of shopping,
0:01:11 > 0:01:14but I'm not actually spending any money, which is amazing.
0:01:17 > 0:01:19Now, Leicester City have proved that a fairly small budget
0:01:19 > 0:01:21will get you very far.
0:01:21 > 0:01:24But sticking to a budget is something one debt-ridden
0:01:24 > 0:01:26family are really struggling with.
0:01:26 > 0:01:29And they desperately need our help. So let's see what we can do.
0:01:31 > 0:01:35Husband and wife Ian and Angela have a big family.
0:01:35 > 0:01:36Two of their children live at home
0:01:36 > 0:01:39while four more have flown the nest.
0:01:39 > 0:01:42But the couple didn't have the most romantic of starts.
0:01:42 > 0:01:45They met in their local supermarket.
0:01:45 > 0:01:48I popped into our local Tesco's.
0:01:48 > 0:01:53I saw her in the chocolate biscuit aisle.
0:01:53 > 0:01:55She was going for some Kit Kats.
0:01:55 > 0:01:57So I did the only thing I could think of doing,
0:01:57 > 0:02:00which was crashed my trolley into hers.
0:02:00 > 0:02:02- Corny. - HE LAUGHS
0:02:02 > 0:02:03Sparked a conversation.
0:02:03 > 0:02:07And it went from there. Our first date was 20 years ago.
0:02:07 > 0:02:11- We had four children. And then we had two more together.- Mm-hmm.
0:02:12 > 0:02:15But Angela and Ian don't just have a big family,
0:02:15 > 0:02:17they have a big problem.
0:02:17 > 0:02:22Like many other households, they've built up mountains of debts.
0:02:22 > 0:02:25We're kind of in this impossible situation at the moment where
0:02:25 > 0:02:31if we're going to pay the debts off just by paying monthly amounts,
0:02:31 > 0:02:33it's going to take us years and years and years to do it.
0:02:33 > 0:02:36Absolute nightmare.
0:02:36 > 0:02:38Ian and Angela fell into serious debt
0:02:38 > 0:02:40following a dispute with a builder.
0:02:40 > 0:02:42Then shortly afterwards,
0:02:42 > 0:02:46Angela's sister in America was diagnosed with terminal cancer.
0:02:46 > 0:02:49My poor older sister, she got breast cancer.
0:02:49 > 0:02:50And she lived in the States.
0:02:50 > 0:02:54So we tried to get over there as much as we could to see her,
0:02:54 > 0:02:56because the outcome was not going to be good.
0:02:56 > 0:03:00The only way that we could really do that was using credit cards.
0:03:00 > 0:03:04I would do that again. I would sell anything, you know, to do that.
0:03:04 > 0:03:07We were doing car-boot sales every weekend
0:03:07 > 0:03:10to get enough money to give the kids dinner money
0:03:10 > 0:03:13to go to school the following week. And it was tough.
0:03:13 > 0:03:15But, you know, we just did everything that we
0:03:15 > 0:03:18could to keep the family together and to keep things going.
0:03:18 > 0:03:21OK. Try again. If you get another W, you go to jail.
0:03:21 > 0:03:25But the family's debt has spiralled out of control.
0:03:25 > 0:03:29And despite their efforts, it keeps growing every month.
0:03:29 > 0:03:30£60,000.
0:03:31 > 0:03:34I think, at the moment, all things being equal,
0:03:34 > 0:03:37we'll probably finish paying all the debts off about
0:03:37 > 0:03:40five minutes before we disappear off this earth.
0:03:40 > 0:03:43- Yeah.- So my worry is that, you know,
0:03:43 > 0:03:45we want to be able to enjoy our retirement.
0:03:45 > 0:03:46And the way we're going,
0:03:46 > 0:03:50we're going to still be paying debts off through our retirement.
0:03:50 > 0:03:53Time to call in personal finance expert Sarah Pennells
0:03:53 > 0:03:56for one of her toughest challenges yet.
0:03:56 > 0:04:00And straightaway, she breaks the news that things are even
0:04:00 > 0:04:03worse than Ian and Angela had feared.
0:04:03 > 0:04:08Have you added up how much you owe - setting aside your mortgage -
0:04:08 > 0:04:11but on the loans, the credit cards and the store cards?
0:04:11 > 0:04:13How much did you owe last month?
0:04:13 > 0:04:15It's just over 90,000 at the moment.
0:04:15 > 0:04:18When I looked at the figures you had,
0:04:18 > 0:04:22I actually worked it out as being over £101,000.
0:04:22 > 0:04:24How does that make you feel?
0:04:24 > 0:04:27- Dreadful. Really bad. - Yeah.- Really bad.
0:04:27 > 0:04:30If these guys don't sort their situation out quickly,
0:04:30 > 0:04:32they could lose everything they have.
0:04:32 > 0:04:36A credit card provider could just look at your overall debt levels
0:04:36 > 0:04:38and without you missing a payment,
0:04:38 > 0:04:41- they could just decide to reduce your credit limit.- Mm-hmm.
0:04:41 > 0:04:45And so it wouldn't be something that you had done by not making payments,
0:04:45 > 0:04:48- but the effect could be quite dramatic.- Severe. Yeah.
0:04:48 > 0:04:52- Yes.- Yeah.- Catastrophic.- Yep.- That was the word I was going to use.
0:04:52 > 0:04:55- And I thought maybe it sounded overdramatic.- No, but it isn't.
0:04:55 > 0:04:56- It's true.- It's not.
0:04:56 > 0:04:59And that's one of the things that's hanging over us all the time.
0:04:59 > 0:05:02It's going to take more than just a few savings here
0:05:02 > 0:05:06and there to get the family's finances back on track.
0:05:06 > 0:05:07They're actually pretty savvy
0:05:07 > 0:05:11when it comes to switching suppliers and finding the best deal,
0:05:11 > 0:05:14but they're still very quick to reach for the credit cards,
0:05:14 > 0:05:18especially when it comes to buying gifts and treats for the family.
0:05:18 > 0:05:22I am guilty of over-indulging my children.
0:05:22 > 0:05:24You know, we want to treat our children for their birthdays
0:05:24 > 0:05:27and Christmas. So it does cost quite a lot.
0:05:27 > 0:05:30Yeah, it is. But it's family, and family is very important to us.
0:05:30 > 0:05:34Now, of course, these two are far from the only Brits who've
0:05:34 > 0:05:37got in the habit of flashing the plastic.
0:05:37 > 0:05:40But Sarah wonders if they realise just how much
0:05:40 > 0:05:43they rely on their cards to fund their daily life.
0:05:43 > 0:05:47So she's come up with a plan to make that crystal clear.
0:05:48 > 0:05:50So we've got a little bit of a challenge for you,
0:05:50 > 0:05:54which is to look at your spending over the last 12 months
0:05:54 > 0:05:58and just to pop these stickers on things that you've bought
0:05:58 > 0:06:01with either your credit cards or your store cards.
0:06:01 > 0:06:04- Now we're going to give you ten minutes.- OK.
0:06:04 > 0:06:06Bring back here the things that you can carry.
0:06:06 > 0:06:09If it's something big like furniture, we've got some stickers.
0:06:09 > 0:06:11- You can just pop them on. So, off you OK.- BOTH: OK.
0:06:13 > 0:06:15A new mattress.
0:06:15 > 0:06:16Television.
0:06:16 > 0:06:18Rug for this room.
0:06:18 > 0:06:21And we've had the whole bathroom redone.
0:06:21 > 0:06:23These trousers.
0:06:23 > 0:06:26Wow, Ian and Angela are going to run out of stickers if they carry on
0:06:26 > 0:06:30at this rate. But they're in good company.
0:06:30 > 0:06:34Between us, we put more on our cards than anywhere else in Europe.
0:06:34 > 0:06:37In fact, the UK accounts for not far off a third
0:06:37 > 0:06:40of all EU credit card spending.
0:06:41 > 0:06:43That. That.
0:06:44 > 0:06:45That.
0:06:45 > 0:06:48OK, Angela and Ian, five minutes left.
0:06:48 > 0:06:51This bathroom, yes. This bathroom was redone as well.
0:06:51 > 0:06:53Time's up, and Angela
0:06:53 > 0:06:57and Ian are face-to-face with the cause of their sleepless nights.
0:06:57 > 0:07:00- That looks expensive. - It is expensive.- Yeah.
0:07:00 > 0:07:04- How much was it, roughly? - That's £350.- OK.
0:07:04 > 0:07:07Between them, Angela and Ian have five credit cards
0:07:07 > 0:07:09and five store cards.
0:07:09 > 0:07:11And Sarah's been through the statements
0:07:11 > 0:07:14and spotted that, like tens of thousands of people
0:07:14 > 0:07:18across the country, they often stick to the minimum repayments
0:07:18 > 0:07:20and never pay off the full amount.
0:07:20 > 0:07:24The one thing I did notice is that you're buying some clothes
0:07:24 > 0:07:27and then you're making a payment,
0:07:27 > 0:07:29but you're not paying off what you've spent.
0:07:29 > 0:07:34So each month, say you've spent, I don't know, £70 or something.
0:07:34 > 0:07:37And then you've paid £35.
0:07:37 > 0:07:40But you're still worse off because the debt has grown,
0:07:40 > 0:07:43- plus you've paid interest on the whole lot.- Interest on top.
0:07:43 > 0:07:45Not just on the £35.
0:07:45 > 0:07:48That was just one thing that struck me. Did you...?
0:07:48 > 0:07:50Are you aware that's what you do?
0:07:50 > 0:07:53Not really. It's wha... We juggle about with what I can do.
0:07:53 > 0:07:54What I think I can afford.
0:07:54 > 0:07:59And just pay what I can out of our monthly budget, really.
0:07:59 > 0:08:03Unless they start paying off what they owe differently,
0:08:03 > 0:08:06their total debt will keep growing with every purchase.
0:08:08 > 0:08:11And there's something else Sarah wants to confront with them -
0:08:11 > 0:08:13the amount of food they waste.
0:08:13 > 0:08:17Though only four people live in the house, they spend a big,
0:08:17 > 0:08:20fat £1,000 a month on groceries.
0:08:20 > 0:08:24So Sarah has asked Angela to put aside all the things that,
0:08:24 > 0:08:25like plenty of other households,
0:08:25 > 0:08:28they typically bin at the end of each week.
0:08:29 > 0:08:33I have to say, Angela, I'm really kind of surprised at what's here
0:08:33 > 0:08:35and what you're going to be throwing away.
0:08:35 > 0:08:39So maybe one of the ways that we can make some savings is to get
0:08:39 > 0:08:43you to be much, much tougher about what you spend on food.
0:08:43 > 0:08:46What do you think, now you've seen this as well,
0:08:46 > 0:08:49about what your mum and dad spend on food and what doesn't get eaten?
0:08:49 > 0:08:51I guess when we leave to go shopping,
0:08:51 > 0:08:53we don't think about what's already in the fridge,
0:08:53 > 0:08:55so we buy just in case it's not there.
0:08:55 > 0:09:00So now we need to make lists and change how we shop.
0:09:00 > 0:09:01It's an opportunity.
0:09:01 > 0:09:03I like your attitude.
0:09:03 > 0:09:05But it is in a way, because the good thing is
0:09:05 > 0:09:07you've now seen how much you waste.
0:09:07 > 0:09:10And there's nothing like having it all in front of you to
0:09:10 > 0:09:13realise actually what's going on.
0:09:13 > 0:09:19Around two million tonnes of food is chucked out in the UK every year.
0:09:19 > 0:09:22But if this family can become more disciplined with their weekly shop
0:09:22 > 0:09:26and bring it back in line with the national average,
0:09:26 > 0:09:30they could save an annual £7,680.
0:09:31 > 0:09:33That is a massive saving.
0:09:33 > 0:09:37But it's nowhere near enough to get the family back into the black.
0:09:37 > 0:09:40So, next, Sarah wants to tackle the amount Ian and Angela
0:09:40 > 0:09:43spend on treating their family and friends.
0:09:46 > 0:09:49She's invited Angela's son, Toby, his fiancee, Catherine,
0:09:49 > 0:09:53and his future mother-in-law, Helen, for a financial heart-to-heart.
0:09:53 > 0:09:57They have no idea Angela and Ian have so much debt,
0:09:57 > 0:09:59so this might get awkward.
0:09:59 > 0:10:02You might sort of wonder why you're all here.
0:10:02 > 0:10:05But, as you probably know, Angela and Ian are going to try
0:10:05 > 0:10:07- and clear off some of their debts.- OK.
0:10:07 > 0:10:12And there's a lot of evidence that if family are involved and know what
0:10:12 > 0:10:15the situation is, it's much more effective,
0:10:15 > 0:10:19- cos you can all keep each other on-track.- OK.
0:10:19 > 0:10:22Time for the family to hear some home truths.
0:10:22 > 0:10:23I've got a couple of envelopes here.
0:10:23 > 0:10:26One is, we call it luxury spend,
0:10:26 > 0:10:29but it's really how much they spend on family presents and things.
0:10:29 > 0:10:31- I'll hand that to you, Toby.- Yep.
0:10:31 > 0:10:35Have a look at it. Take it out and then tell us what the figure is.
0:10:35 > 0:10:38£10,500.
0:10:39 > 0:10:42These two are generous to a fault.
0:10:42 > 0:10:45But it's not doing their bank balance any favours.
0:10:45 > 0:10:48There's lots of us and they're very generous.
0:10:48 > 0:10:52You'll get repeated phone calls, "What do you want?"
0:10:52 > 0:10:54And then you'll go, "Nothing, don't worry."
0:10:54 > 0:10:56"No, honestly, what do you want?"
0:10:56 > 0:10:59And then they'll keep barraging you with phone calls
0:10:59 > 0:11:03until you have to give a gift that you want.
0:11:03 > 0:11:05Or they'll just give you money instead.
0:11:05 > 0:11:08This Christmas, they gave us money as well as gifts.
0:11:08 > 0:11:10There are going to be some tough choices
0:11:10 > 0:11:12and some things you probably don't want to cut back on.
0:11:12 > 0:11:15But if you were to have no present for your birthday
0:11:15 > 0:11:18but you saw your family, genuinely, would it bother you?
0:11:18 > 0:11:20Genuinely, no, it wouldn't bother me.
0:11:20 > 0:11:21It doesn't make my birthday.
0:11:21 > 0:11:24Spending time with my family makes my birthday.
0:11:24 > 0:11:28How would you feel if you had, you know, much cheaper presents?
0:11:28 > 0:11:32I'm not really that bothered because I have what I need now.
0:11:34 > 0:11:38Sarah's not suggesting they stop giving presents completely.
0:11:38 > 0:11:42But if Ian and Angela cut back on two out of every three gifts
0:11:42 > 0:11:46they buy, they'd most likely save themselves up to seven grand a year.
0:11:47 > 0:11:49But all that's just for starters.
0:11:49 > 0:11:54Later in the programme, as this Sunday roast showdown continues,
0:11:54 > 0:11:57the whole family hears just how big Ian
0:11:57 > 0:11:59and Angela's debts have now become.
0:11:59 > 0:12:02That's a very, very large number.
0:12:07 > 0:12:09Sarah Pennells is with us now,
0:12:09 > 0:12:12along with psychologist Dr Gorkan Ahmetoglu.
0:12:12 > 0:12:14Sarah, if we start with you first off.
0:12:14 > 0:12:17I mean, a lot of people watching will really empathise with Ian
0:12:17 > 0:12:19and Angela's situation, won't they?
0:12:19 > 0:12:22I think you're absolutely right, because although it's clear
0:12:22 > 0:12:25some people get into debt just by spending too much money,
0:12:25 > 0:12:27for a lot of people it's actually a change in their life
0:12:27 > 0:12:30circumstances that tips them over into debt.
0:12:30 > 0:12:34I think the issue now is that they have got a level of debt that,
0:12:34 > 0:12:35if they don't deal with it,
0:12:35 > 0:12:38it could cause real problems further down the line.
0:12:38 > 0:12:42So, despite being in debt, they were still able to borrow more?
0:12:42 > 0:12:45That's right. The way the credit rating system works is
0:12:45 > 0:12:47if you're able to manage debts, even if
0:12:47 > 0:12:50you're not necessarily paying off a large amount of it,
0:12:50 > 0:12:53the lenders look at you as somebody who can cope with that
0:12:53 > 0:12:56- level of debt.- This is how people are getting caught out.
0:12:56 > 0:12:59That's right. I think some people think that actually
0:12:59 > 0:13:02they're being validated by the bank or the credit card company.
0:13:02 > 0:13:05"If the credit card company thinks I'm a good risk and they think
0:13:05 > 0:13:09"they can lend me money, then surely everything must be OK."
0:13:09 > 0:13:11The problem is, if you're not paying down that debt,
0:13:11 > 0:13:15especially on credit cards, the interest rates can be high
0:13:15 > 0:13:18and it can be years before you can be debt-free.
0:13:18 > 0:13:20Gorkan, we're going to come to you now.
0:13:20 > 0:13:22Ian and Angela, as we saw there,
0:13:22 > 0:13:24they kept their family in the dark about those debts.
0:13:24 > 0:13:26Now it's out in the open though,
0:13:26 > 0:13:29do you think that will affect their spending habits?
0:13:29 > 0:13:33I think that it's possible that it does affect their spending
0:13:33 > 0:13:34habits in a positive way.
0:13:34 > 0:13:37So it can act as a motivator, a trigger really,
0:13:37 > 0:13:41where they're waking up to their undesirable reality.
0:13:41 > 0:13:43I think it also depends on the coping strategy really.
0:13:43 > 0:13:48We know that a lot of people that are in debt actually take
0:13:48 > 0:13:50financially flawed decisions.
0:13:50 > 0:13:52So they would make incorrect decisions like borrowing even
0:13:52 > 0:13:56more or paying off smaller debts rather than the bigger debts
0:13:56 > 0:13:58which have bigger interest rates.
0:13:58 > 0:14:01There's an awful lot of families who, in this situation,
0:14:01 > 0:14:05have managed to juggle debts but still continue to spend.
0:14:05 > 0:14:07Why is that?
0:14:07 > 0:14:11Again, I mean, one reason is the avoidance factor.
0:14:11 > 0:14:15We try to not think about the debt.
0:14:15 > 0:14:19Another reason is that actually spending feels good.
0:14:19 > 0:14:23So we are actually thinking about it as a coping mechanism in itself.
0:14:23 > 0:14:25It's a bit like obesity,
0:14:25 > 0:14:29where people will eat even more to feel better in the short term,
0:14:29 > 0:14:33- even though there are long-term negative consequences.- Yes.
0:14:33 > 0:14:36So, we're very short-term minded in a situation like that.
0:14:36 > 0:14:39Sarah, what would your advice be to anyone watching?
0:14:39 > 0:14:42Well, first of all, don't assume that because you can make
0:14:42 > 0:14:46the payments, the minimum payments on your credit card for example,
0:14:46 > 0:14:47that you're doing enough.
0:14:47 > 0:14:50Secondly, try and take a step back from your situation
0:14:50 > 0:14:51because if you're too close to it,
0:14:51 > 0:14:54it can be difficult to make the right choices.
0:14:54 > 0:14:56And don't bury your head in the sand.
0:14:56 > 0:14:59It's such a cliche, but debt advice charities that I speak to
0:14:59 > 0:15:03tell me that people often struggle with the debt on their own
0:15:03 > 0:15:06for months and months before they approach someone for help.
0:15:06 > 0:15:09The longer you leave it, the fewer options you're likely to have.
0:15:09 > 0:15:12Get help and get free help from a debt advice charity.
0:15:12 > 0:15:14Thanks, Gorkan. Thanks, Sarah.
0:15:14 > 0:15:17Now, despite the fact that household debt is on the rise,
0:15:17 > 0:15:20it seems that we just can't stop spending cash.
0:15:20 > 0:15:23Yes, the nation's overflowing wardrobes are a testament
0:15:23 > 0:15:24to our love of shopping.
0:15:24 > 0:15:27However, there is a way to get a whole new look on a budget or,
0:15:27 > 0:15:29in fact, no budget at all.
0:15:31 > 0:15:33A self-confessed compulsive shopper.
0:15:35 > 0:15:38Leah can burn through as much as £500 a month
0:15:38 > 0:15:41on new clothes and handbags.
0:15:41 > 0:15:43I absolutely love a bargain.
0:15:43 > 0:15:45So I'm very guilty of going shopping in the sales,
0:15:45 > 0:15:48impulse buying things, and then never wearing them.
0:15:48 > 0:15:50You know, if there's something that I want,
0:15:50 > 0:15:52I definitely will just buy it.
0:15:52 > 0:15:55I really think it's time I need to rein in my spending
0:15:55 > 0:15:57because we are saving for a house.
0:15:58 > 0:15:59Well, we can help with that
0:15:59 > 0:16:02by introducing Leah to an increasingly popular
0:16:02 > 0:16:05alternative to hitting the shops.
0:16:05 > 0:16:07It's called swishing.
0:16:07 > 0:16:10And with any luck, it will give her the same buzz she gets
0:16:10 > 0:16:12when she buys something new.
0:16:12 > 0:16:15But without the hefty price tags.
0:16:15 > 0:16:18Instead, she'll go to a clothes swapping event,
0:16:18 > 0:16:21that's the next best thing to a shopping spree,
0:16:21 > 0:16:24where a brand-new wardrobe only costs the entry fee.
0:16:24 > 0:16:27You just bring something you no longer wear,
0:16:27 > 0:16:30then exchange it for something new to you.
0:16:30 > 0:16:33Time for a wardrobe clearout, Leah.
0:16:33 > 0:16:34At the moment, I've got
0:16:34 > 0:16:37so many clothes I've actually broken my wardrobe.
0:16:37 > 0:16:40As you can see, my rail has fallen down because it's too heavy.
0:16:40 > 0:16:42So, every morning when I'm looking for things,
0:16:42 > 0:16:44I just have to pull everything out.
0:16:44 > 0:16:49The swishing phenomenon kicked off in the US around ten years ago
0:16:49 > 0:16:54and now thousands of women in towns across the UK have become hooked.
0:16:54 > 0:16:57Some events take the form of parties.
0:16:57 > 0:17:00And as Leah arrives at her first one in North London,
0:17:00 > 0:17:02she can immediately see the attraction.
0:17:04 > 0:17:07Normally on a Saturday, I'd probably be somewhere,
0:17:07 > 0:17:09a really busy shopping centre.
0:17:09 > 0:17:12To be here, it's a much nicer vibe.
0:17:12 > 0:17:14And it feels already like a nice way to shop.
0:17:15 > 0:17:20Swishing etiquette requires everyone to bring at least one quality item
0:17:20 > 0:17:21they'd be proud to pass on.
0:17:21 > 0:17:24That's definitely not a problem for Leah...
0:17:24 > 0:17:2516 items.
0:17:25 > 0:17:27..who's brought quite a few.
0:17:27 > 0:17:30- So, today I could walk away with 16 items?- Yes.
0:17:30 > 0:17:32- Thank you.- Thank you.
0:17:32 > 0:17:34And with the swish officially open,
0:17:34 > 0:17:37the thrill of finding new clothes can begin.
0:17:39 > 0:17:41By swapping instead of shopping...
0:17:41 > 0:17:43I like them, but they're too big.
0:17:43 > 0:17:46..Leah's joining the ranks of hundreds of regular swishers
0:17:46 > 0:17:51who rate the experience more highly than a trip to the high street.
0:17:51 > 0:17:53I love the access to all kinds of different fashion.
0:17:53 > 0:17:56You'd pick up things that you wouldn't normally pick up
0:17:56 > 0:17:57if you'd go into a store.
0:17:57 > 0:18:00I love shopping, shopping, shopping all the time.
0:18:00 > 0:18:03And this is a perfect guilt-free way of shopping, in a way.
0:18:03 > 0:18:06It feels a bit like, yeah, like treasure hunting.
0:18:08 > 0:18:09Not only is swishing a fun
0:18:09 > 0:18:12and social way of making the most of your cast offs...
0:18:12 > 0:18:14I've got a friend who'd absolutely love this,
0:18:14 > 0:18:16so I think I'm actually going to get it for her.
0:18:16 > 0:18:20..swapping unwanted clothing is designed to cut waste,
0:18:20 > 0:18:22as expert swisher Diana explains.
0:18:24 > 0:18:27Swishing is a way to reduce the amount of clothing
0:18:27 > 0:18:29going to landfills. So, right now,
0:18:29 > 0:18:33over a million tonnes of clothing are going into UK landfills.
0:18:33 > 0:18:36So it's a way to kind of reduce our impact on the environment,
0:18:36 > 0:18:39but a way to also kind of not feel that
0:18:39 > 0:18:41feeling of looking at your bank account after a big spend.
0:18:43 > 0:18:47Clothes swaps like this one have prevented around 200,000 kilos
0:18:47 > 0:18:50of clothes from ending up in the bin.
0:18:50 > 0:18:54And savvy shopper Leah is quick to spot some fashion must-haves.
0:18:54 > 0:18:56I've just found a jumpsuit.
0:18:57 > 0:18:59Quite a nice winter coat.
0:18:59 > 0:19:00Yeah, I like that.
0:19:00 > 0:19:03I'm definitely getting the same sort of thrill out of shopping,
0:19:03 > 0:19:07but I'm not actually spending any money, which is amazing.
0:19:07 > 0:19:09They keep putting new stuff out.
0:19:09 > 0:19:12Like, this clutch bag wasn't here five minutes ago.
0:19:12 > 0:19:15I'm shocked that, you know, things that I've actually been looking
0:19:15 > 0:19:20for in shops that I probably would have paid, you know, £50, £60 for...
0:19:20 > 0:19:23I've just got on my little card.
0:19:23 > 0:19:27If you can't see any swishing events in your area,
0:19:27 > 0:19:29there are plenty of websites full of tips
0:19:29 > 0:19:32on how you can organise your own.
0:19:32 > 0:19:34And as the event draws to a close...
0:19:34 > 0:19:35Thank you.
0:19:35 > 0:19:37..is Leah a convert?
0:19:37 > 0:19:39I didn't realise I'd enjoy myself this much.
0:19:39 > 0:19:42I'm just really pleased that my clothes that
0:19:42 > 0:19:43were in my wardrobe at home,
0:19:43 > 0:19:46that were just sitting there for years, have actually been put
0:19:46 > 0:19:48to quite good use and I've got some value out of them.
0:19:48 > 0:19:50I'd definitely recommend it to others.
0:19:50 > 0:19:52In fact, when I leave today, I'm probably going to ring
0:19:52 > 0:19:55one of my friends and book it in for next month
0:19:55 > 0:19:57because I really think it's a fun way to shop.
0:20:00 > 0:20:02Oh, I love the idea of swishing.
0:20:02 > 0:20:05I've been talking about doing it with my girlfriends for ages,
0:20:05 > 0:20:07so that's really inspired me to have a go.
0:20:07 > 0:20:10Now, joining me at Leicester Market is Michelle,
0:20:10 > 0:20:13whose wardrobe used to be overflowing with clothes,
0:20:13 > 0:20:15shoes and bags. So what's changed?
0:20:15 > 0:20:16Well, everything, really.
0:20:16 > 0:20:21Because now I'm embarking on a no-spend year.
0:20:21 > 0:20:23DENISE GASPS
0:20:23 > 0:20:24Which is what it is, really.
0:20:24 > 0:20:27I'm actually not spending any money for an entire year.
0:20:27 > 0:20:28No money at all?
0:20:28 > 0:20:32Other than my mortgage and my water rates, council tax and food,
0:20:32 > 0:20:35things I have to pay out for in order to live.
0:20:35 > 0:20:38So what prompted this dramatic change?
0:20:38 > 0:20:41I want to minimise my outgoings, my bills.
0:20:41 > 0:20:43My biggest bill is my mortgage.
0:20:43 > 0:20:46And I decided every penny that I save, I'm going
0:20:46 > 0:20:48to put it towards my mortgage, pay it off earlier,
0:20:48 > 0:20:50and be financially free, hopefully,
0:20:50 > 0:20:53much sooner than the 25 years the bank would like me to be free in.
0:20:53 > 0:20:56You've got to be incredibly disciplined to do
0:20:56 > 0:20:58something like this. And you've even got your husband involved.
0:20:58 > 0:21:01Yeah, well, my husband was involved with the minimalism
0:21:01 > 0:21:05aspect from the start. And he's sold just as much stuff as I have.
0:21:05 > 0:21:07But he's opted out of the actual spending challenge
0:21:07 > 0:21:11because he's not as bonkers as I am. So he's living his life.
0:21:11 > 0:21:13The only thing he is involved in
0:21:13 > 0:21:14when it comes to the spending challenge,
0:21:14 > 0:21:16is kind of a challenge within a challenge,
0:21:16 > 0:21:19which was to get our food bill down to the lowest amount that we
0:21:19 > 0:21:23possibly could. So, three meals a day for both of us,
0:21:23 > 0:21:26plus our toiletries, plus cleaning products for the house,
0:21:26 > 0:21:28fabric softener, things like that.
0:21:28 > 0:21:31- We've managed to get that down to £35 a week.- Wow.
0:21:31 > 0:21:32How have you done it?
0:21:32 > 0:21:34Just small things like buy a flask,
0:21:34 > 0:21:38don't buy coffees when you're out and about, make shopping lists,
0:21:38 > 0:21:41batch cook, do all those sensible things that I'm
0:21:41 > 0:21:45sure our grandmothers were doing decades ago.
0:21:45 > 0:21:47What's been the hardest thing so far?
0:21:47 > 0:21:50Because I'm wracking my brain, thinking, "What could I do without?"
0:21:50 > 0:21:53And there's quite a few things that I'm thinking,
0:21:53 > 0:21:55"There's not a chance I'm going to give that up."
0:21:55 > 0:21:57So what's been the hardest thing for you?
0:21:57 > 0:22:00The hardest thing to give up isn't actually a thing.
0:22:00 > 0:22:02It's more of experiences.
0:22:02 > 0:22:05So every time that I've maybe missed a night out with my friends
0:22:05 > 0:22:09and my family cos I can't buy a ticket to go to a gig or a play.
0:22:09 > 0:22:12And now people are starting to book their summer holidays,
0:22:12 > 0:22:14I'm really starting to get quite envious.
0:22:14 > 0:22:17For a lot of people this would be quite an extreme way to live.
0:22:17 > 0:22:20But what advice would you give them to just rein it in a little bit?
0:22:20 > 0:22:23I don't think everyone can just go on a no-spend year.
0:22:23 > 0:22:26It is a bit of an extreme thing to do.
0:22:26 > 0:22:29But I think that people can have their own little challenges.
0:22:29 > 0:22:32Have a look at the area you know you spend a lot of money in,
0:22:32 > 0:22:35whether that's clothes, whether that's gadgets,
0:22:35 > 0:22:37whether it's money down the pub,
0:22:37 > 0:22:41and what I'd suggest is maybe even do a miniature no-spend
0:22:41 > 0:22:42ban for yourself.
0:22:42 > 0:22:45So you'd maybe go, "OK, I'm not going to spend any more
0:22:45 > 0:22:48"money on clothes, just for the next month."
0:22:48 > 0:22:51I'm sure you'll realise that you probably don't need to spend as much
0:22:51 > 0:22:54money as you can, and that you'll make a significant saving yourself.
0:22:54 > 0:22:56Great advice there, Michelle. Thanks very much.
0:22:56 > 0:23:00Now I'm going to try and find out what the people of Leicester
0:23:00 > 0:23:01could not live without.
0:23:04 > 0:23:06So I took a little butchers around.
0:23:06 > 0:23:09- Hello.- You all right? - Are you guilty of overspending?
0:23:09 > 0:23:14I spend a lot of money on music, drumming gear. So, yeah, I am.
0:23:14 > 0:23:15And if you had to do without it,
0:23:15 > 0:23:18how long do you think you could last for?
0:23:18 > 0:23:22Drumming, I could probably last a little while without it.
0:23:22 > 0:23:25But music, probably not. If I hear a new song, I buy it instantly.
0:23:25 > 0:23:27Yeah, that's the kind of way I am.
0:23:27 > 0:23:30Are you a bigger spender? And if so, what do you spend on?
0:23:30 > 0:23:33- My granddaughter.- Your granddaughter?- Yes.- How old is she?
0:23:33 > 0:23:34Two-and-a-half years.
0:23:34 > 0:23:37Everything... I see things and I just buy them.
0:23:37 > 0:23:41Clothes, shoes, toys. I can't resist.
0:23:41 > 0:23:43I go by shops and see them and I think,
0:23:43 > 0:23:46"I can just see Avery in that. I must have it."
0:23:46 > 0:23:48So I couldn't do without that. No.
0:23:48 > 0:23:53Clothes occasionally. And I go on holidays.
0:23:53 > 0:23:56If someone told you to give those up for about a year, could you do it?
0:23:56 > 0:23:59No, I don't think so. No, I wouldn't.
0:23:59 > 0:24:01What do you spend your money on?
0:24:01 > 0:24:05- Games.- Games? What, video games? - No, board games.- Oh, board games?
0:24:05 > 0:24:08- Yeah.- If someone said to you, "Do without that for a year,"
0:24:08 > 0:24:10- could you do it?- No.
0:24:10 > 0:24:11- No, it's too much fun.- OK.
0:24:11 > 0:24:14Think of the laughs you can have and the arguments that you have
0:24:14 > 0:24:16when you catch 'em cheating.
0:24:16 > 0:24:19I do spend quite a lot of money on chocolate and stuff like that.
0:24:19 > 0:24:21Guilty pleasures of life, eh?
0:24:21 > 0:24:23If someone said to you that you had to give it up for a year,
0:24:23 > 0:24:26- give your chocolate up, what would you say?- Oh...
0:24:26 > 0:24:27Oh, I don't know.
0:24:27 > 0:24:30I don't think I'd answer that question, I'd just walk away.
0:24:30 > 0:24:33I couldn't give up chocolate for a year. No, no, no.
0:24:33 > 0:24:35Well, it seems the people of Leicester aren't quite ready
0:24:35 > 0:24:38to live Michelle's minimalist lifestyle just yet.
0:24:41 > 0:24:44I'm pretty certain that Michelle would agree with that old cliche -
0:24:44 > 0:24:46money can't buy you happiness.
0:24:46 > 0:24:49But the truth is, a recent survey said it can.
0:24:49 > 0:24:51Well, sometimes, at least.
0:24:51 > 0:24:54You see, according to the boffins who did the research,
0:24:54 > 0:24:57happiness levels aren't so much about how much cash you've got,
0:24:57 > 0:25:00but more about what you're spending your money on
0:25:00 > 0:25:03and if what you're buying suits your personality.
0:25:03 > 0:25:06So would having more cash make you happier?
0:25:10 > 0:25:13I think money can buy happiness because I'm a lot happier when
0:25:13 > 0:25:17I've got money and I've never seen a sad person on a jet-ski before.
0:25:17 > 0:25:18So...
0:25:18 > 0:25:21I don't think money's everything, but it definitely, definitely helps.
0:25:21 > 0:25:23I think it makes life easier.
0:25:23 > 0:25:25I don't think it makes you happier necessarily.
0:25:25 > 0:25:27But I think it does make things in life easier
0:25:27 > 0:25:28that sometimes can be a struggle.
0:25:28 > 0:25:31I guess it depends what you actually do with it, really.
0:25:31 > 0:25:34I do think it can, in certain situations.
0:25:34 > 0:25:37I mean, it depends, really. Like, for homeless people,
0:25:37 > 0:25:39I think money would bring them more happiness.
0:25:39 > 0:25:41But for people who have money, I don't think it can bring
0:25:41 > 0:25:43any more happiness than they've already got.
0:25:43 > 0:25:47I haven't got any money and I think I'm pretty happy. So... No.
0:25:47 > 0:25:50All my uni fees being paid...
0:25:50 > 0:25:54That right now, yeah, that would make me happy right now,
0:25:54 > 0:25:55actually, yeah.
0:25:55 > 0:25:59Happiness comes from having a good relationship
0:25:59 > 0:26:00and being happy in life.
0:26:02 > 0:26:06Doing things that make you happy. Working where you want to be.
0:26:06 > 0:26:08Doing things that you want to do.
0:26:11 > 0:26:14People all over the world have got different attitudes to money.
0:26:14 > 0:26:17Some spend it, some save it.
0:26:17 > 0:26:20Leicester's Narborough Road is a microcosm of the globe.
0:26:20 > 0:26:23It's been voted Britain's most diverse street.
0:26:23 > 0:26:26Academics from the LSE have discovered
0:26:26 > 0:26:29there are shopkeepers here from 23 different countries.
0:26:29 > 0:26:31Let's go and talk to some of them.
0:26:35 > 0:26:38- Merhaba.- Merhaba.
0:26:38 > 0:26:40- Hello.- Are you from Turkey? - I am from Turkey.
0:26:40 > 0:26:42Can I ask you about attitudes to money
0:26:42 > 0:26:46and what main differences you've noticed between Turkey and here?
0:26:46 > 0:26:51I think people in Turkey tend more to save some money.
0:26:51 > 0:26:55But in the UK, people are more
0:26:55 > 0:27:01spending money on their holidays, going out for food.
0:27:01 > 0:27:04What about mortgages? People owning their own property or renting,
0:27:04 > 0:27:06a comparison between Turkey and Britain.
0:27:06 > 0:27:09What are people more likely to do in Turkey?
0:27:09 > 0:27:16In Turkey, some of the people buy their properties in one go,
0:27:16 > 0:27:17rather than mortgage.
0:27:17 > 0:27:19So from what you're saying there,
0:27:19 > 0:27:23quite often people will buy a house over there that they'll pay cash?
0:27:23 > 0:27:26Yeah, if I had the funds, for instance, now and go to Turkey
0:27:26 > 0:27:29and want to buy a house, I would buy it straightaway.
0:27:29 > 0:27:33- Tesekkur ederim.- Bir sey degil. - Gule gule!- Gule gule!
0:27:34 > 0:27:36What's your heritage? Where are you from?
0:27:36 > 0:27:39I'm originally from India, but I was born in East Africa.
0:27:39 > 0:27:41Can I ask you about your attitude to spending?
0:27:41 > 0:27:44Are you a cash, credit card, or a bit of both man?
0:27:44 > 0:27:47I'm a bit of both man at the minute. I never used to be.
0:27:47 > 0:27:50But my accountant told me, "You need to build your credit history
0:27:50 > 0:27:52- "to get a mortgage, to get a loan." - Good for you.
0:27:52 > 0:27:55Moneysaving advice, what would it be?
0:27:55 > 0:27:58Always compare. Electric bill, gas bill, everything, always compare.
0:27:58 > 0:28:00Insurance liability, everything, always compare.
0:28:00 > 0:28:02- Shop around, really.- You have to.
0:28:04 > 0:28:06- Hello, what's your name?- Wicek.
0:28:06 > 0:28:08- With a name like that, I'm assuming you're Polish?- Yes, I am.
0:28:08 > 0:28:11Can I be a little bit personal and ask you about your money?
0:28:11 > 0:28:13Are you a spender or a saver?
0:28:13 > 0:28:14I'm a saver, definitely.
0:28:14 > 0:28:18What do you think the Brits are like compared to the Polish people?
0:28:18 > 0:28:22It's more common for the Brits to take loans
0:28:22 > 0:28:25and use their credit cards whereas, I would say,
0:28:25 > 0:28:30Polish people will think twice before getting into a loan.
0:28:30 > 0:28:32You're obviously a very shrewd cookie,
0:28:32 > 0:28:34so give me your best moneysaving tip.
0:28:34 > 0:28:39I would say, make sure that you only buy stuff that you need.
0:28:39 > 0:28:41Don't spend money on the stuff you don't need.
0:28:41 > 0:28:45As a nation, do you think us Brits are guilty of that?
0:28:45 > 0:28:49- I would say yes. And the ability to spend, let's be honest.- Yeah.
0:28:49 > 0:28:50And you're good at it.
0:28:50 > 0:28:52I tell you what, you've hit the nail on the head.
0:28:52 > 0:28:54I think we're the best in the world at it.
0:28:54 > 0:28:57Everyone's been very open talking about money today, which is
0:28:57 > 0:29:00something one debt-ridden family we met earlier
0:29:00 > 0:29:03could do with taking note of. Let's see if we can help.
0:29:05 > 0:29:08Ian and Angela are super close to their six children.
0:29:08 > 0:29:13But raising their big family has been hard going on their finances.
0:29:13 > 0:29:16Every time the kids needed school shoes or uniform or
0:29:16 > 0:29:19anything like that, then it ended up going on a card.
0:29:19 > 0:29:21I had about two or three jobs in one go
0:29:21 > 0:29:26and began to accrue using credit cards, remortgaging,
0:29:26 > 0:29:29trying to make ends meet. We never caught up, really.
0:29:31 > 0:29:34After a double whammy of disputed building work
0:29:34 > 0:29:37and the cost of visiting a terminally ill relative abroad,
0:29:37 > 0:29:40their debts have spiralled out of control.
0:29:40 > 0:29:44So we sent in personal finance expert Sarah Pennells to help.
0:29:44 > 0:29:48And her first task was totting up just how bad things have got.
0:29:49 > 0:29:53I actually worked it out as being over £101,000.
0:29:53 > 0:29:57- How does that make you feel? - Dreadful. Really bad. Really bad.
0:30:01 > 0:30:04Sarah reckons they'll stand a better chance of becoming debt-free
0:30:04 > 0:30:06with the support of their family.
0:30:09 > 0:30:13So she's invited son Toby, his fiancee, Catherine, and Catherine's
0:30:13 > 0:30:17mum, Helen, to share a nice roast dinner and some home truths.
0:30:17 > 0:30:20She's broken down how much Ian and Angela owe,
0:30:20 > 0:30:23and put the key numbers inside a series of envelopes
0:30:23 > 0:30:27ready for Toby to digest along with his dinner.
0:30:27 > 0:30:29I think it's time for another envelope.
0:30:29 > 0:30:33This one has got the figure in it for the total amount that Angela
0:30:33 > 0:30:34and Ian owe in loans.
0:30:34 > 0:30:38- So open it up.- OK.- Have a look. Tell me what do you think.
0:30:40 > 0:30:47- It's £30,228.- These are loans to pay off other debts.- Yeah, OK.
0:30:47 > 0:30:53Wow, yeah. It's...it's a large amount of money to owe.
0:30:53 > 0:30:56So, this one here. Nearly the last one.
0:30:56 > 0:31:00That's everything they owe so far on credit and store cards.
0:31:00 > 0:31:03Putting the burden on me now. Wow.
0:31:03 > 0:31:08It's £71,275.
0:31:08 > 0:31:12That's a very, very large number.
0:31:12 > 0:31:17- Over £100,000 in... - Our last envelope. Total debt.
0:31:17 > 0:31:19Saves me the maths.
0:31:19 > 0:31:21THEY LAUGH
0:31:21 > 0:31:24So it's £101,503.
0:31:30 > 0:31:33That is a large amount of money now.
0:31:33 > 0:31:37This hasn't been the easiest of family gatherings for anyone.
0:31:37 > 0:31:40But Sarah hopes that by opening up to their nearest and dearest,
0:31:40 > 0:31:43Angela and Ian can take the first steps on the road to
0:31:43 > 0:31:45financial recovery.
0:31:45 > 0:31:48Having heard about how much your mum and dad owe,
0:31:48 > 0:31:49how does it make you feel?
0:31:49 > 0:31:53Now I know not to get into debt, otherwise I'll end up like them.
0:31:53 > 0:31:55Angela, how does it make you feel
0:31:55 > 0:31:58when you hear why she doesn't want to get in debt?
0:31:58 > 0:32:02It makes me feel bad. I feel like we're bad examples.
0:32:02 > 0:32:03But, if nothing else,
0:32:03 > 0:32:08- it's shown her that this is not the right way to go about things.- Mm.
0:32:10 > 0:32:12Don't be too hard on yourself, Angela.
0:32:12 > 0:32:15You're not alone in running into the red.
0:32:15 > 0:32:19As a country, we're more in debt than ever before,
0:32:19 > 0:32:22with the average UK household now owing close
0:32:22 > 0:32:27to £10,000 in personal loans, credit cards and overdrafts.
0:32:27 > 0:32:30So it's no wonder all this has struck a chord with Toby's
0:32:30 > 0:32:32future mother-in-law, Helen.
0:32:34 > 0:32:39I constantly consolidate my debts, pay off my credit cards,
0:32:39 > 0:32:41and then it all starts again.
0:32:41 > 0:32:43So I'm on the same spiral.
0:32:44 > 0:32:47Recent figures show that around two million
0:32:47 > 0:32:50people are in arrears on their credit cards with another
0:32:50 > 0:32:54two million facing persistent debt they struggle to repay.
0:32:54 > 0:32:56This meal has been difficult.
0:32:56 > 0:32:59But Sarah's hoping it will be the start of a new chapter
0:32:59 > 0:33:02in Angela and Ian's lives.
0:33:02 > 0:33:05So, Angela and Ian, how have you found this day
0:33:05 > 0:33:07with me coming in, having a look at your finances
0:33:07 > 0:33:12and making some suggestions about what you can do?
0:33:12 > 0:33:16It's not been an easy day because we're revealing...
0:33:16 > 0:33:19A lot of people don't talk about debt because it's embarrassing.
0:33:19 > 0:33:21It's a bit mortifying. It's...
0:33:21 > 0:33:23But it's reality.
0:33:23 > 0:33:28And I think once you voice it, you've got to do something about it.
0:33:28 > 0:33:30I actually think you've been really brave. I really do.
0:33:30 > 0:33:33And being open about it as well, which is
0:33:33 > 0:33:36something that most people would really rather not do.
0:33:36 > 0:33:38I think it's a really tough thing to do,
0:33:38 > 0:33:40but I do think that's going to be part of your solution.
0:33:40 > 0:33:43But Sarah knows that drastic action is needed.
0:33:47 > 0:33:49So she's brought Angela and Ian to London
0:33:49 > 0:33:52to meet three top financial experts.
0:33:54 > 0:33:56Mortgage broker David Hollingworth,
0:33:56 > 0:33:59bankruptcy expert Louise Yates
0:33:59 > 0:34:01and debt advisor Jane Clack.
0:34:01 > 0:34:04We're a little bit nervous cos we're not quite sure what to expect.
0:34:04 > 0:34:05But at the same time,
0:34:05 > 0:34:07we're also really interested to see what options there are
0:34:07 > 0:34:10and what opportunities there might be for us
0:34:10 > 0:34:12to actually start getting control of our lives and...
0:34:12 > 0:34:14- Able to move forward, really. - Moving forward, yeah.
0:34:19 > 0:34:21So, Angela and Ian, welcome.
0:34:21 > 0:34:25I've brought you to this beautiful, old bank vault.
0:34:25 > 0:34:27You might be wondering why. But the reason is,
0:34:27 > 0:34:31to kind of take you away from your home environment and away
0:34:31 > 0:34:36from maybe some of the emotions that are associated with that.
0:34:36 > 0:34:39You're going to meet the experts face-to-face today.
0:34:39 > 0:34:40So, meet them one by one.
0:34:40 > 0:34:43And hopefully they'll come up with some helpful solutions.
0:34:43 > 0:34:45So I will leave you to it.
0:34:45 > 0:34:47- And the very best of luck. - BOTH:- Thank you.
0:34:48 > 0:34:51The size of what they owe means there's no guarantee
0:34:51 > 0:34:54any of these experts will be able to help.
0:34:57 > 0:35:00First into the vault is debt advisor Louise Yates,
0:35:00 > 0:35:02who's been looking at whether becoming insolvent
0:35:02 > 0:35:06and filing for bankruptcy would be an option of Angela and Ian,
0:35:06 > 0:35:08as it can be for others.
0:35:08 > 0:35:10If you were to go down an insolvency route,
0:35:10 > 0:35:12that has serious repercussions.
0:35:12 > 0:35:16The impact immediately of going into an insolvency situation is
0:35:16 > 0:35:19that your credit rating pretty much deteriorates.
0:35:19 > 0:35:22And it takes about six years to build that back up again.
0:35:22 > 0:35:24That has serious repercussions for you guys
0:35:24 > 0:35:28in terms of your mortgage and getting onto new mortgage products,
0:35:28 > 0:35:30remortgaging in the future.
0:35:31 > 0:35:35Filing for bankruptcy would clear their debts, but their assets,
0:35:35 > 0:35:37such as their house, would become vulnerable
0:35:37 > 0:35:39and may even be repossessed.
0:35:39 > 0:35:42So this isn't the right option for them.
0:35:44 > 0:35:48Next expert through the vault is mortgage broker David Hollingworth.
0:35:49 > 0:35:52- Hi.- Hello.- I'm David.- Ian. - Hi, nice to meet you, Ian.
0:35:52 > 0:35:56He's been looking at the possibility of switching to a better mortgage
0:35:56 > 0:35:58to save some money.
0:35:58 > 0:36:02However, there would be a heavy penalty involved.
0:36:02 > 0:36:05Now, looking at your mortgage, I think that that penalty,
0:36:05 > 0:36:09there's no way you're ever going to save that back by switching now.
0:36:09 > 0:36:14It could be getting on for £6,500 or more, I think.
0:36:14 > 0:36:17So there's no huge savings to be made there,
0:36:17 > 0:36:19- which is the bad news.- BOTH:- OK.
0:36:20 > 0:36:23So, for now, switching to a different mortgage isn't
0:36:23 > 0:36:26a good idea for Angela and Ian either.
0:36:26 > 0:36:30In fact, David thinks that due to their high debt, lenders might
0:36:30 > 0:36:34be reluctant to let them remortgage when their current deal expires.
0:36:34 > 0:36:37One more reason to sort out their situation quickly.
0:36:40 > 0:36:43Maybe there will be better news from the third and final expert -
0:36:43 > 0:36:45debt advisor Jane Clack.
0:36:45 > 0:36:48She's been pouring over the couple's finances,
0:36:48 > 0:36:52and by the looks of things, she means business.
0:36:52 > 0:36:54You know, if we talk about your aspirations.
0:36:54 > 0:36:55You want to become debt-free, don't you?
0:36:55 > 0:36:58- Yes, we do. - I've got some good news for you.
0:36:58 > 0:37:00And I'm not beating about the bush here.
0:37:00 > 0:37:02If you two concentrate on this hard,
0:37:02 > 0:37:04you could be debt-free in three years.
0:37:04 > 0:37:06- Fantastic.- Debt-free.
0:37:06 > 0:37:08Hold your horses. Did I hear that right?
0:37:08 > 0:37:11You're in a wonderful position, you really are.
0:37:11 > 0:37:14You've actually got some money you can be throwing at the debt.
0:37:14 > 0:37:18So I would really suggest that you go at it hell for leather this year.
0:37:18 > 0:37:20Yep?
0:37:20 > 0:37:24Jane's drafted a recovery plan for Angela and Ian.
0:37:24 > 0:37:28And key to it is paying off what they owe on their credit cards.
0:37:28 > 0:37:30Both of them have good jobs
0:37:30 > 0:37:34and they've a combined income of more than £90,000.
0:37:34 > 0:37:37But like an estimated 1.5 million other people,
0:37:37 > 0:37:39they typically only make the minimum payments
0:37:39 > 0:37:42when paying off their various credit cards.
0:37:42 > 0:37:44That's not the most effective way to do it.
0:37:44 > 0:37:47So Jane is recommending a very different approach.
0:37:49 > 0:37:54On your credit cards, the interest rate can vary.
0:37:54 > 0:37:57And it's every month on what the balance is.
0:37:57 > 0:38:01So the more you can reduce the balance, the less interest you pay.
0:38:01 > 0:38:03This is a structured plan to get your debts
0:38:03 > 0:38:06repaid at a rate you can afford.
0:38:06 > 0:38:09You are in control. OK?
0:38:09 > 0:38:10The more your debts get down,
0:38:10 > 0:38:13the more you're able to look at repaying your mortgage.
0:38:13 > 0:38:16- OK.- And it will really stand you in good stead.
0:38:16 > 0:38:19- OK. Thank you.- Pleasure.
0:38:19 > 0:38:23Jane is convinced that if the couple cut down their household spending,
0:38:23 > 0:38:26they could use what they've saved to make more strategic
0:38:26 > 0:38:30credit card payments that gradually wipe out their debts
0:38:30 > 0:38:32rather than simply keep them at bay.
0:38:32 > 0:38:35It won't be easy, but if they can stick to that,
0:38:35 > 0:38:37whether it takes three or five years,
0:38:37 > 0:38:40a debt-free future isn't that farfetched.
0:38:41 > 0:38:44Angela and Ian, she actually said you could be debt-free
0:38:44 > 0:38:47in three years, which I thought was quite extraordinary.
0:38:47 > 0:38:50- It's hard to imagine. - Yeah, it is hard to imagine.
0:38:50 > 0:38:53And it would be lovely if that does happen. Um...
0:38:53 > 0:38:54And hopefully it will.
0:38:54 > 0:38:57So this idea of really cutting back
0:38:57 > 0:39:01and throwing as much extra money as you can at the most expensive
0:39:01 > 0:39:03cards, without being too brutal about it,
0:39:03 > 0:39:06but realistically, that's the only option you've got.
0:39:06 > 0:39:08Yeah, I think it's pretty clear to us now,
0:39:08 > 0:39:11having been through this exercise, that the focus has to be on
0:39:11 > 0:39:14paying down the most expensive cards.
0:39:14 > 0:39:15Do you now feel like,
0:39:15 > 0:39:18"Right, we're going to have to make these changes,
0:39:18 > 0:39:20"bring all the family on board, and make sure
0:39:20 > 0:39:23"we can stick to it over the longer term, over the few years"?
0:39:23 > 0:39:25- Definitely.- Yeah.
0:39:25 > 0:39:28- We'll definitely want to do those changes.- Yeah.
0:39:28 > 0:39:32I think the family will be fine. They'll be quite happy about it.
0:39:32 > 0:39:35I think, you know, it's up to us to make sure that we stay in control.
0:39:35 > 0:39:39Angela and Ian aren't fully convinced on the timescale
0:39:39 > 0:39:40for becoming debt-free.
0:39:40 > 0:39:43But not it's down to them to make it happen.
0:39:43 > 0:39:45And the key to paying off what they owe will be
0:39:45 > 0:39:50keeping their spending down, with the support of all their family.
0:39:50 > 0:39:55When you are debt-free, let me know cos I'll help you to celebrate.
0:39:55 > 0:39:57But I really wish you the very best of luck.
0:39:57 > 0:39:59- Thank you.- Thank you very much.
0:40:04 > 0:40:05Sarah is back with us now.
0:40:05 > 0:40:08Sarah, Angela and Ian seem so shocked by everything.
0:40:08 > 0:40:10How are they getting on now?
0:40:10 > 0:40:12I think, as you say, it was a big shock.
0:40:12 > 0:40:15Not just in terms of the final total they owed, but what the
0:40:15 > 0:40:18consequences could be of not managing to get on top of this debt.
0:40:18 > 0:40:20So I think where they are now is,
0:40:20 > 0:40:23they're just processing the advice that the experts gave them,
0:40:23 > 0:40:26and trying to make sure that the next steps they take are
0:40:26 > 0:40:29sustainable and they can deal with the debt in a way that suits them.
0:40:29 > 0:40:32Now, they've got used to a certain lifestyle but they're going
0:40:32 > 0:40:36to have to really adjust if they're going to make these changes.
0:40:36 > 0:40:38That's right. If they are going to pay off their debt,
0:40:38 > 0:40:41they're going to have to make some fairly significant changes.
0:40:41 > 0:40:43And that's going to be tough.
0:40:43 > 0:40:45But I think the key is to make sure that they get
0:40:45 > 0:40:47support from the whole family.
0:40:47 > 0:40:49And that they do focus on the end goal.
0:40:49 > 0:40:52Because they can't just make cutbacks for a few months,
0:40:52 > 0:40:54- this could take them several years.- Yeah.
0:40:54 > 0:40:57There's probably a lot of people right now who
0:40:57 > 0:41:00feel like their debts are spiralling out of control.
0:41:00 > 0:41:02So what would be your advice to them?
0:41:02 > 0:41:05I think the first thing is to actually add up how much you owe.
0:41:05 > 0:41:09The second is to try and get your family and friends involved,
0:41:09 > 0:41:12close friends, so that they can keep you on track as well.
0:41:12 > 0:41:14Don't hide this debt problem away.
0:41:14 > 0:41:16Is there anywhere you can get free advice?
0:41:16 > 0:41:19I think it's really important the advice you get is free.
0:41:19 > 0:41:22Now, there are a number of debt advice charities that will
0:41:22 > 0:41:24give you free advice.
0:41:24 > 0:41:27There's National Debtline, there's Citizen's Advice,
0:41:27 > 0:41:28and there's StepChange.
0:41:28 > 0:41:31And there's another free provider of debt advice called Payplan.
0:41:31 > 0:41:34I think the worst thing you can do if you're in serious debt problems
0:41:34 > 0:41:36is to pay somebody to get you out of it.
0:41:36 > 0:41:38- Thanks, Sarah.- Thank you.
0:41:38 > 0:41:40Now, if you'd be interested in having one of our experts
0:41:40 > 0:41:42round to tackle your debts,
0:41:42 > 0:41:44contact us at...
0:41:46 > 0:41:47And in the meantime,
0:41:47 > 0:41:50here's where to find plenty of tips on how to budget.
0:41:52 > 0:41:56Our website has everything you need to sort our your spending.
0:41:56 > 0:42:00We've teamed up with the Money Advice Service to bring you
0:42:00 > 0:42:03easy to use moneysaving tools to plan your budget,
0:42:03 > 0:42:06calculate the cost of your car or credit cards,
0:42:06 > 0:42:09and give your money a complete health check.
0:42:09 > 0:42:11Download them at...
0:42:14 > 0:42:17..where you can also take our interactive spending test.
0:42:17 > 0:42:19And you'll find plenty more tips
0:42:19 > 0:42:22and advice to keep your finances on track.
0:42:25 > 0:42:28Sarah is still with us to answer some of the questions we've
0:42:28 > 0:42:30had from the people of Leicester.
0:42:30 > 0:42:34Yazza says, "I keep getting pestered by cold-callers.
0:42:34 > 0:42:36"Is there anything I can do to stop them?"
0:42:36 > 0:42:38I completely agree with Yazza.
0:42:38 > 0:42:40I get pestered by them as well and it's a real problem.
0:42:40 > 0:42:43Now, a couple of months ago, the government introduced a new rule
0:42:43 > 0:42:48which said that all companies that cold-call must display their number.
0:42:48 > 0:42:51So they can't hide behind that sneaky withheld number trick.
0:42:51 > 0:42:54I'm not convinced that's going to put an end to cold-calling.
0:42:54 > 0:42:57- Nor me.- The first thing I would suggest is to register with the
0:42:57 > 0:43:00Telephone Preference Service, which is free to do,
0:43:00 > 0:43:02takes 28 days for your registration to go through.
0:43:02 > 0:43:06The second thing is to be really careful about who you give
0:43:06 > 0:43:09permission to, to actually pass on your details,
0:43:09 > 0:43:11or to use your details for marketing.
0:43:11 > 0:43:13And then, finally, if you're still getting lots of calls.
0:43:13 > 0:43:16And if they're causing you problems, if it's a landline,
0:43:16 > 0:43:19there is call-blocking technology that you can buy.
0:43:19 > 0:43:21Some of it does get very good write-ups.
0:43:21 > 0:43:23Now, Emily says, "I've inherited some money.
0:43:23 > 0:43:25"Should I pay off my student loan or invest it?"
0:43:25 > 0:43:27This is another really good question.
0:43:27 > 0:43:29Now, normally if you inherit some money
0:43:29 > 0:43:32and you've got expensive debts such as credit card or personal loan,
0:43:32 > 0:43:34the advice would be to pay that off.
0:43:34 > 0:43:36With student loans, it's a bit more complicated
0:43:36 > 0:43:38because they're viewed as cheaper loans
0:43:38 > 0:43:41because the interest rate is linked to inflation.
0:43:41 > 0:43:44But crucially, the amount that you pay off doesn't depend on how
0:43:44 > 0:43:48much you borrowed but what you earn once you graduate.
0:43:48 > 0:43:50She needs to think about how much she might earn through her
0:43:50 > 0:43:53working life and therefore whether she should pay off the debt.
0:43:53 > 0:43:56And whether that inheritance could be used for something else.
0:43:56 > 0:43:58If she wants to get a deposit for a house,
0:43:58 > 0:44:00then maybe there's a better use for that money.
0:44:00 > 0:44:03It isn't a simple as, say, pay it off to be debt-free,
0:44:03 > 0:44:04which often is the advice if you are in debt.
0:44:04 > 0:44:07Circumstances are different and it depends on yours, doesn't it?
0:44:07 > 0:44:10- Very much so. Yes. - Sarah, thanks a lot for your advice.
0:44:10 > 0:44:12- There's been some little nuggets in there.- Thank you.
0:44:12 > 0:44:14And big thanks to all our guests
0:44:14 > 0:44:16and, of course, to you at home for joining us.
0:44:16 > 0:44:18And we hope that you've picked up some useful tips.
0:44:18 > 0:44:20- Until next time, cheerio.- Bye-bye.