Episode 9 Right on the Money

Whether you're a spender or a saver,

we could all do with making the most of our cash.

So we found simple advice for you to do just that,

and taken it to people right across the UK.

Whatever help you need with your finances, we are Right On The Money.

Morning and welcome to Right On The Money.

The show that sets out to boost your piggy bank by making a few simple changes.

And today's show is packed with lots of easy-to-understand tips

that could transform your finances.

Here's what's coming up.

We try and help a family desperate to extend their home.

But there's a problem -

the mountain of money they're spending on takeaways.

You probably only family I know that actually have a burger mortgage.

That's crazy. I didn't realise it was that much.

And the new craze that's fuelling a nation of night-time spending.

Welcome to the world of the vampire shopper.

When I start shopping at night, I am quite vulnerable

to just start clicking and just think

"Oh, I'll buy that. That'll do."

Seven, eight black skirts.

I'm quite ashamed now.

Now lots of people we meet want to save enough money to pay for something,

like a wedding or a special family holiday.

But today we meet a couple

whose priority is to make someone else's life easier.

Paul and Kim Welsh live in Leicestershire

with their four children.

I would describe Paul as the funny man.

Always got a cheesy smile.

And the kids have all got his smile.

Well, what can I say about Kim?

She's beautiful. She's nice, she's kind-hearted.

I don't think... She moans a lot.

But, I love her.

Oh, I love you too.

But both Paul and Kim also have extremely busy lives.

He delivers takeaways and she manages the local convenience store.

We do work hard.

We both work full-time, we both do six days a week.

Don't get to spend as much time as I want with the kids

but we have bills to pay and mortgages to pay.

Let's see who can get the highest?

And, as if that wasn't enough,

their hectic household could soon be getting even busier.

Kim's younger brother, who has a rare macular degeneration syndrome,

might have to move in.

Alex is my 21-year-old brother, who's going blind.

At any point now, he could lost his sight.

Currently lives with my mum and Alex will need looking after.

Kim and Paul's dream is to extend their house so Alex can move in too.

What's very important for me is if and when I do lose my sight,

then I know I've got somewhere to live.

And if I need anyone, I know someone's there.

So if we managed to save some money,

the first thing is the extension, isn't it?

Yeah, definitely. We want to sort the extension out

and then we want to make the best of our house.

So, that sounds like a plan.

A nice bit of home improvement

to make the house bigger and better for all.

But there's a problem.

Money. Well, to be more accurate, how Kim and Paul spend it.

You're quite a big spender, so if I go out it's small amounts.

You could spend ?100 in one shot.

Whereas mine is little bits of money.

I look at my bank account once a month

and I'll tend to look back on what I spent for the month

and then I'll be a bit like, why did we do that?

Paul and Kim also like to nip off for the occasional mini-break which

means there's not a lot left in the bank at the end of the month.

We go about once a month if we can.

Just trying to spend some quality time with each other.

Because we both work hard and we think we deserve it.

When you work six days a week, you ain't got no time for each other.

So it is important for us to spend that time.

We've made it our mission to help Paul and Kim to save for their

extension, and still enjoy their life together.

Can they make their money go further?

So finance expert Sarah Pennells has come to pay them a visit.

Hello. Hi, I'm Sarah. I'm Paul. Nice to meet you.

Would you like to come in? Thank you very much.

Now, Paul and Kim, as you may have heard,

I'm just absolutely fascinated by your finances

so I want you to tell me more.

I do know that I spend a lot on convenience shops, um, takeaways, eating out.

If we was to add it up, it'd probably more than I thought.

It's a lot more than what you thought.

I tend to just hand the card over and spend.

Probably look the bills afterwards.

So what are you having?

I might have...

With a full-on family life

the Welshes sometimes fall back on the local takeaway.

How can help you? Yes, please.

Can I have an Istanbul special please?

Of course, anything else you want? No, thank you.

And delivery driver Paul has a very expensive hobby.

Cars. They're his livelihood, but he owns four of them.

Whereas I'm impulsive with my bank card in the shop,

Paul's impulsive with cars.

He gets an idea in his head that he needs a new car

and I say get rid of what we've got.

That doesn't happen.

He comes back with the new car and that's why we've ended up with four.

There's loads for Sarah to crack on with and with that house extension her goal,

she's keen to begin.

Let's see if we can come up with a way

for you to still be able to do the things that you want to do

but build up a pot of money

so that you can build that annexe for your brother,

that's obviously just really important to both of you.

That would be great, wouldn't it? Yet, it would be good.

That would satisfy everyone.

No mystery about where we are here.

No, this is one of our locals.

Time for the money-saving menu and for starters she's got a quick hit.

The huge amount of money this family spends on grub.

Do you know how much you spend a week on going out and on takeaways?

I'd say, probably,

?60 to ?70, with drinks.

Not even close, Paul.

I think you'll be in for shock, guys.

We've worked out that you spend

a grand total of ?433 a month.

Oh, my gosh. That's what this represents.

That's almost ?110 every week.

Nearly double Paul's guess.

I'm a lazy cook. So if Paul's busy working at the weekend

and I'm busy with the children, last-minute we'll be,

"Let's grab something to eat, go home, and relax."

Do you know what this adds up to?

That's about ?5,200 a year.

That is actually the same as you spend on your mortgage.

Oh, my God.

You are probably the only family I know who have a burger mortgage.

That's crazy. I didn't realise it was that amount.

That's a lot of money.

But, hold your horses,

that five grand only covers dining out and takeaways.

What about down at the supermarket?

Sarah's been totting that up as well.

And that is the grand total...

..of ?4,164 over a year.

We actually spend less in the supermarket

than we do on meals for one day of the week?

Two days a week, one day.

Wow. Between your takeaways, meals on the go,

meals out and your supermarket shopping

they add up to nearly ten grand over a year. On food?

On food. That's just crazy, isn't it?

That's a lot of money.

Crazy indeed.

Kim and Paul are clearly shocked by their annual takeaway tab,

but don't worry, Sarah's not just about pointing out the problems,

she's also got the solutions.

So I think the key is to actually work out a budget

of how much you want to spend when you're going out for meals,

on takeaways, or things like that, and then stick to that budget.

If necessary, take cash out at the beginning of the week and when the

money's gone, you stop spending it.

Yeah, that sounds a good idea because when I use my card,

it doesn't feel like I'm spending.

I think it's a lot more painful to hand over a crisp note

than it is to wave a card around.

It is, definitely.

And Sarah's got one more money-saving morsel up her sleeve.

When you're eating out,

there are some mystery shopping sites that you can sign up for,

that would pay you for doing a review if you eat out.

Oh, that would be good one, wouldn't it?

You're quite critical. Always.

Websites are constantly advertising for volunteers

to complete detailed reports on a restaurant, hotel, or pub.

So now you do still get to eat out but you get paid for doing it,

which sounds like a win-win to me.

OK. You'll like that, won't you?

You'll soon develop a taste for saving money, I'll tell you.

I see what you've done there, Penells.

If Kim and Paul halve their takeaway spending

and shop savvy at the supermarket, they can save a pot of cash.

With the couple beginning to realise how a few changes can reap rewards,

it's time to tackle Paul's expensive hobby. Cars.

You've got a lot of cars, haven't you?

Four in all. Just a few, yeah.

Paul had planned to strip this old motor for parts for his newer car,

but, two years on, it's still sitting in the drive

losing value with every day that goes by.

Sarah thinks it's time to cut their losses.

If you sell the car for scrap, you can probably get around 80 quid for.

That's a good start. Not a fortune,

but it's 80 quid that's in your pocket.

Rather than... That can start our saving pot, can't it?

Wise words, Kim.

And even with this one motor gone,

tinkerer Paul won't be short of work to do.

He's got another project on the go.

Bye, car. One down.

Hello, ?80.

With the first deposit in their savings pot,

it's time for Sarah to save some more money.

She's noticed they spend a hefty amount on clothes.

If I was to go rifling through your children's wardrobes,

would I find a few things with the labels on,

or a few things that they don't need, maybe already got?

Definitely. All our wardrobes.

All of our wardrobes are full of stuff that we don't need.

A-ha! Sounds a textbook case of impulse buying to me.

I'm the bargain hunter,

I look at the label and think,

"Oh, that's supposed to be ?50-60 and it's on sale at ?20."

I think, "That will do for a holiday, or for summer."

Then buy it. Then Kim'll say,

she ain't even wore it and now's she's grown out of it.

What a waste.

But Paul and Kim are not the only ones.

Brits have a secret stash of unworn clothes

worth over 10 billion pounds tucked away in their wardrobes.

If you put the 600 million unworn garments next to each other,

they would stretch 18,000 miles.

That's equivalent of London to New York five times over.

Those clothes may have looked like a bargain to you, Paul,

but Sarah's not so sure.

It's only a bargain if you actually use it and if you can afford it.

And if this sort of everyday money that you're spending

is stopping you from doing other things,

maybe it's not the brilliant bargain you think it is.

It's not, and we know that.

But we still do it.

So just how much cash are Paul and Kim spending

on all this clobber?

Well, in one month, you actually spent around ?390.

And the average that you spend is about 347.

And that's about ?4,000 a year.

That's quite a lot.

That's a very lot.

You think you're getting bargains.

Forget the price tag, it's what's the use to you?

If it's ?20 of worth to you

and you know you're going to use it, that's maybe one thing.

But if it's ?20 you can't afford

and it will sit at the back of the wardrobe gathering dust,

that's not really a bargain. Yeah. True.

If Paul started sharing the clothes-buying duties with Kim,

she would have a chance of moderating his impulse buying.

Sarah reckons they could save around ?2,500 a year.

Does that sound like a plan? That sounds good to me.

Yeah, good idea.

Yes!

Join us again when Kim and Paul realise

how hard they going to have to work

to pay for that dream extension for brother Alex.

Better get saving, Mr Welsh.

Better get working double time.

And we'll be chatting to Kim and Paul a little later on.

Joining us now is the Financial Times money editor Claer Barrett

and professor of psychology Catriona Morrison.

Claer, we'll start with you. Kim and Paul are also working very hard,

to look after their family.

They like to spend a lot of money on clothes

and half of that stuff ends up in a bag

in the bottom of the wardrobe with the labels on, not used.

I'll be honest, I'm guilty of that myself.

Why do people do that?

Because we love shopping.

It's the number one leisure activity in this country.

Me, I love shopping.

It's gives us a buzz to find something special.

If you think there's a discount and money off,

"Get in there! I've saved money."

No, you've just spent money

on something you've probably got at home in a drawer.

So, Catriona, we've identified that that's what we do,

it's comfort, it's habitual.

How do we stop?

Planning is the major thing, I think.

Planning and considering what we're spending

and what we actually need to spend.

The moment that you buy something, if you impulse buy,

it feels great when you buy it

but you have to balance is that short-term

rush of satisfaction versus the long-term,

"Do I really want it? Do I need it?"

Claer, we hear the term "money hacks".

What does that actually mean?

Well, it's an American term for, basically, a money-saving tip.

Tip, hack, same difference.

Do you want to hear my top ones? Tell me your best ones.

Number one, set up a direct debit for your savings.

It's really easy to do, payday, direct debit,

money comes out you never notice it.

And that money is then in your savings account, growing away.

If you wait until the end of month thinking that will have enough money

left for putting away, you'll never do it.

Number two, do an audit of your house.

See what you've got that you're not using,

whether you could sell it online.

You could really unlock some significant money.

People will buy absolutely anything online.

I had it tatty old book from the 1960s,

which I thought was probably worthless.

I'll look it up and see. It was worth ?8 and I managed to sell it.

Something I was literally going to throw away

because I thought it was too poor quality to give to a charity shop.

So one woman's trash is another woman's treasure.

Can I speak to you about selling online? You may.

Because, in our last series,

one of our experts suggested that you could sell the little

cardboard rolls inside toilet rolls

and, if you collect them up, there are people who want them.

People want them for crafts.

They might want them for hamsters or for their pet parrot to chew.

That sort of thing. So I put it to the test.

I saved up 100 toilet rolls.

Did they sell? No.

Don't laugh, don't mock me, because I've got two watchers,

currently speaking, at the moment.

I've got a funny feeling that this is going to snowball.

This time next year, I could be a toilet roll millionaire.

That sounds like a lot of effort to me.

And, Claer, there must be easier ways to make a tenner.

Yes. There are lots of things you can sell on eBay.

You might think this product is broken.

I'm going to have to put it in the bin.

But think of its value in terms of spare parts.

Make sure it's the brand that is listed and words like "vintage", "retro",

they are magnets because they are the search terms that people look for.

Think like a buyer, and then you'll be the best seller.

Excellent advice, there, ladies.

Thank you very much.

It seems more and more of us are becoming creatures of the night.

But rather than being a nightmare for retailers,

this particular breed of shopper is something of a dream.

And much more likely to bleed their own credit cards dry.

It's finally come to that point in the evening

when it's time to turn in.

The milky drink is made,

climb the wooden stairs to Bedfordshire

and drift off to sleep.

Well, that used to be the case.

But, for many of us, it's time to shop.

The last few years has seen a boom

in what's known as the vampire economy.

Karen from Manchester is one of a growing army of nocturnal shoppers.

It's a time that she comes alive.

I don't shop during the day, because I'm far too busy.

I don't get time to relax, or even think about shopping,

until at least 8:00, 8:30 in the evening.

But Karen is so committed,

she can hardly keep up with her night-time orders.

I love opening packages.

I think it's great. It's exciting to look and see what you've got.

And remember, sometimes,

because a lot of times I've forgotten what I ordered.

I actually ordered this on Saturday night.

I think it was about 11 o'clock at night.

And, with this particular retailer,

if you order before midnight it comes the next day.

Which, again, is part of the thrill.

Let's have look! Let's have a look!

And that desire for instant gratification...

That's my bikini top.

..is exactly what's driving this after-dark shopping craze.

And retailers are happy to oblige.

Consumers want things, and they want them now.

So, not only is it the impulse purchase

but it is the desire to actually get the consumer material tomorrow.

So we're seeing brands adapt to that.

For Karen, her purchasing has gone through the roof.

I do tend to go on a bit of a splurge.

So I will look at a couple of retailers at a time.

I'm swayed very easily by special offers, to be honest.

My husband actually says that I'm a salesman's dream.

I'm very gullible.

Sometimes I do rein her in a little bit

when I think she spends excessively and a lot of parcels arrive.

Sometimes I think Karen can get carried away.

I'm not comfortable with it.

But Karen insists that her night-time shopping

is just part of winding down and relaxing.

It's my time to sit down with my laptop, or my iPad,...

..have a flick through, see what's available, treat myself, in a way,

because I deserve it.

And, like many who feed the vampire economy,

Karen is watching more than one screen at once.

I would say that 90% of the time I am multitasking.

I am shopping and watching the telly.

When we shop as part of the vampire economy we very often multiscreen.

You very often see the television on in the room

and people will have their tablet, or laptop, and mobile phone.

And, of course, whilst we believe

that we've developed as human beings,

we can't actually spread our attention equally

over all those devices.

And that would impact

on the quality of our decision-making.

And there's another thing.

I think, when I start shopping at night,

I am possibly weary and I am probably, yes,

quite vulnerable to just start clicking and thinking,

"I'll buy that, I'll buy that. That'll do."

Rather than looking into it in more depth.

When we shop in the evening, our guard is actually down

and we may be asking different questions from our purchase.

We might actually consider how something looks,

rather than how it performs, or whether we can afford it.

And no prizes for guessing the end result.

That's a nice black skirt.

I bought that one evening.

But, I think I've got six, seven, eight black skirts.

I'm quite ashamed now, actually.

This is obviously why online shopping at night is so dangerous.

Don't worry, Karen.

It's not all down to you.

Businesses spend a lot of time and effort trying to persuade us

to part with our money after dark.

Retailers are taking advantage of shopping behaviour

by leveraging data that they have on the consumers

and they are targeting with more relevant e-mails,

with more relevant social media, even with mobile messaging,

even when it's not traditionally a typical buying hour.

And they're launching marketing campaigns

to coincide with top-rated evening telly.

You've got more and more of the retailers

that are sending targeted,

relevant information off of the heels of popular things

like Strictly Come Dancing or Bake Off.

You're seeing a rise in kitchenware purchases after an episode.

I get bombarded all the time by different retailers,

even if I've not shopped with them online.

They get my e-mail address and then I'm targeted with enticements,

inducements to start shopping with them.

Instant delivery,

loads of choice and special deals targeted directly at you

all add up to a shopping experience that's difficult to resist.

And there's one more thing that makes suckers of vampire shoppers.

A partner who might usually advise us might actually be asleep.

The children who we buy something for may not have an input.

We may not have a friend, there, who I can ask, "Do I look big in this?"

And who can kind of give us this advice?

It's a very, very different way of making decisions.

But, despite all this,

Karen is determined to continue hunting out those after-dark offers.

I have never tried not to be a vampire shopper

but I would never intend to stop, I don't want to stop.

But, if you do want to avoid waking up to a hefty hole

in your bank balance, here's some advice.

The one bit of advice that I would give to consumers

is not checking out.

You may well make your choice but then decide,

I'm not going to check out until tomorrow morning.

If you are habitually somebody who spends and overspends at that

particular time, perhaps consciously do something different.

Go for a walk.

And if none of that works,

there's one foolproof way of curbing your night-time shopping.

Close your tablets, switch off the lights and just go to sleep.

Night-night.

And after all that spending in the dead of night,

maybe we should all think about how we can use the daylight hours

to make some extra cash.

That's exactly what Diane and Francesca do.

I'm going to start with you, Francesca.

A lot of people feel that they are only earning enough to cover the

bills in their regular job.

So tell me about your extra line of work.

So, the extra jobs that I do from home is I do dog boarding,

where I take in dogs from people going on holiday,

to earn extra cash.

So you get the beauty of looking after people's dogs

and you're getting paid for it? Yes.

I love it. It's a really good way of earning money, I think,

because it's so much fun.

And then there's things like blogging, so I have a blog,

From Pennies To Pounds.

This month, I'm due to make about ?1,000 from that.

On top of your extra job?

Gordon Bennett, it's a lot of money, isn't it? It is. Yes, it's good.

Diane, what about you? Tell me about some of the things that you've done.

Mystery dining. Online surveys.

Can I be nosy and ask roughly what you're earning out of it, Diane?

Varies. Like last year might have been

just about ?1,500 in vouchers and cash.

Let's look on the flip side of it.

You're earning about 1,500 quid in vouchers and money

and everything else, but you're also eating out free.

You're testing products which, most of the time, you get to keep.

Yes. It's money for nothing, really, isn't it?

Why did you get into it and what difference has made to your life?

I got into it because I found myself in some debt, consumer debt.

I realised that I really needed to make some extra money from home

in order to pay it off.

So I started to have a look around at what I could find

and I found lots of blogs where people are making money

so I started my own blog.

So, by blogging, writing about how to save money,

you can actually earn money?

That's right. OK.

So I paid off my debt last month, and it took about a year.

Had it not been for all this extra income, you'd still be in debt?

Yes, I'd say so, yes. So it's paid dividends for you?

Definitely. Yes.

A lot of people right now will be looking at this and thinking,

"I want to do that, I want to look after dogs,

"I want to go mystery dining."

Where do they go to get the information from?

What should they be careful of, as well?

Go online and, in a search engine, put in customer survey sites.

That'll bring up some sites, but be careful of scams.

Research. Always do your research.

So what you're saying is that,

get some reviews on the company that you're about to get the work from.

There's some really great ideas there.

Thanks for your time.

Good luck to you both. BOTH: Thank you.

Here at Halifax Market I think we would all agree that those are great

ideas for making a little extra cash,

particularly as you never know when you might need it.

Claer, I want to talk to you about savings, or the lack of them.

Now reports suggest that half of working-class families and one third

of middle-class households would have to borrow money to pay for a

?500 bill. That's quite alarming.

I do think it's alarming, but it doesn't surprise me, because,

if you look at what's happening in the economy in the UK at the moment,

wages are not going up.

They're stubbornly stuck.

But the cost of living, inflation, is rising.

We are feeling the pinch and it's harder to make regular savings.

Of course, then a big, unexpected bill comes around the corner

and lo and behold, you don't have enough money to deal with that.

So your only alternative is to get into debt.

Now, debt is plentiful but it's expensive, often.

If you don't have a good credit rating then you'll really,

really be fleeced. What you need to do is look at the cost of that debt,

whether it's a payday loan, whether it's an unauthorised overdraft,

an authorised overdraft, which would be much cheaper,

or even using a credit card to paper over the cracks.

So long as you understand the cost and understand the repayments

then that's the knowledge that you need to make the decision.

OK, Claer, let's go speak to the people in Halifax.

Sure.

Would it surprise you to know that a lot of people in the UK don't have

more than ?100 in their savings? Wouldn't surprise me, no.

Things just cost too much nowadays, don't they?

The cost of living, everything.

It's hard to save.

If a ?500 bill were to land on your doorstep today,

would you be going into panic? Yes.

Yes, definitely. Yeah.

Do you ever look at the bank interest?

No. No brass in. All I think is, "Have I got it with me?"

He's got a few notes in there.

So, how can you pay your bills if you haven't got a bank account?

Just get me brass and pay it.

In the bank? You go in with cash to and pay over the counter?

Yeah, oh, yeah.

Does it surprise you to hear that the average household probably

doesn't even have ?100 savings?

I'd be one, I'd be in that category.

I live every day at a time and if I've got money

at the end of the week, then we can have a treat.

What would you do if you got an unexpected bill for, say, ?500?

Panic. Yeah.

I always make sure I've got a few hundred quid, if I need it.

If the telly breaks down or the washer breaks down.

I've always got money there to cover that.

What advice would you give to the younger generation,

who want things now, and they want to buy things on credit?

You can't get through to them.

You can't make them understand until it comes to them.

Earlier on we met a couple from Leicestershire

who just couldn't seem to stop overspending,

despite desperately trying to save up enough money

to care for a relative. Let's see how they got on.

Paul and Kim Welsh have a dream -

to save enough money to build an extension to their house,

and there's a good reason why they need it.

Kim's brother has an eye disease and could lose his sight,

so being close to Kim and her family is something he really needs.

Currently we've got a garage.

We would knock the garage down

and we would build a self-contained house.

So Uncle Alex would move in and be independent but then also have the

support of us if he needed.

Money expert Sarah Pennells has already found ways to rein in their

spending by curbing their food and clothes shopping.

You are probably the only family I know

who actually have a burger mortgage. That's crazy.

Take cash out at the beginning of the week.

And when the money's gone, you stop spending it.

Spurred on by the ?7,300 savings Sarah's made them so far,

they've invited over builder Andrew Turner

to find out exactly how much the extension will cost.

Looking at two bedrooms, kitchen, bathroom,

so my idea is two bedrooms at the back.

Then you've got your hallway and kitchen and living room.

Four metres by seven metres.

So after a few measurements, what's the damage?

A rough estimate, you are between ?40-45,000.

OK.

That's a bit more than we was sort of expecting, wasn't it?

A bit, yeah.

Hmmm. Food for thought.

Definitely.

Better get saving, Mr Welsh. I'd better get working double-time.

Now that Paul and Kim have a better idea of the

amount they need to raise,

Sarah's back to help advise on how they can do it,

and joining her is mortgage broker David Hollingsworth.

He starts off by reviewing their current mortgage payments,

which have just increased.

Presumably it's one of your biggest outgoings.

How much are you paying there?

?430, I think, now.

Last year when I was on my deal, it was more like ?330, ?340.

So it's nearly ?100.

That's a big jump. The reason that's happened is your original deal will

have come to an end, you've reverted onto the lender's

standard variable rate as they call it.

What it means is a more expensive mortgage.

So you really need to start shopping around.

Paul and Kim have been caught out when their current deal expired

and are now paying over the odds for their mortgage.

It's easy to ignore our mortgage once it's set up, but if you do,

you could be throwing money away on an expensive rate when there are

better options available.

And David has just found a brand-new deal for Paul and Kim.

So, all in all, then, how much do you think Kim and Paul could save,

if they were to switch today?

I think that could be taking your, annual outgoings,

of what is about ?5,000 a year at the moment,

I think we could be shaving a good ?1,200 or more from that.

That's a lot of money, isn't it?

Too right. By switching,

Paul and Kim could be stashing away

?1,200 a year, making the extension a step closer.

?100 a month for us is a lot.

And if we put it in a separate pot,

and I can see at building up and we know what the end result is, then,

that will make a huge difference.

There's still some more that we can do. There's still some more savings,

but I think we're on the way now, aren't we?

Yeah, definitely. It's exciting.

Although Paul and Kim want to avoid borrowing more money on their

mortgage if they can help it,

Sarah has a great tip for them if they decide to borrow a little to

help finance the extension.

And it's all to do with making them

an attractive proposition to lenders.

You said you were a bit worried about

your credit rating not being brilliant.

It's not very high, maybe that's because

I've not done much with my credit

and then also with Paul, I've looked at Paul's

and you've not got any history, have you?

So it is one of these odd things in terms of,

if you haven't had credit cards,

if you've just lived on your savings and the money in the bank account,

oddly, David, you're not always

looked on in the best light by the lenders.

Lenders are looking to get a feel for what you look like,

what your credit profile looks like and, if they can't see anything,

that gives them a bit of a problem,

so if you have credit cards that have been conducted well,

that might help you a little bit.

Top-dollar advice, David.

And Kim and Paul owe you a debt of gratitude.

Time for Sarah to take this couple on another leg of

her money-saving journey. She's worked out that Kim and Paul

are spending a small fortune each month on mini breaks.

So, at the moment you do spend a fair bit on your weekends away.

What would you spend?

Anything from about ?200 to probably about ?500,

and that's probably once a month.

Wow, that's nice.

Let me get my bags.

And how do you choose where you end up? And how much you pay?

Just look on the internet, basically.

Look for the best deal out there.

In the past year,

this travel-mad couple racked up many miles on their short breaks,

which put a great big dent in their annual budget.

So you said that you spend anything between ?200 and ?500 a month on

going away. Yeah.

And that's between ?2,400 and ?6,000 a year.

Wow, that's a lot. That's like a family holiday.

That is two family holidays.

Does it feel like it's that much?

You book in advance, and it's paid for.

So you book it one month, say,

then you're spending the money the next month

when you actually go away,

so you're never actually adding up the whole cost of each break. OK.

Managing your budget means making choices.

Either cutting back or looking for cheaper alternatives.

Sarah's keen for Kim and Paul to think of other options

when it comes to planning their me time.

Something like this, this crazy golf, it's just ?4 for a session,

so it's really cheap, really good value.

And there are loads of other things that you can do as well,

salsa dance classes, whatever takes your fancy.

Kim's not got no rhythm, so...

Paul's got the rhythm. He can dance.

I'm not a very good dancer.

Watch it, Paul!

Well, there you go, you can learn together.

You can learn a new skill.

I think the three key things are, firstly,

to look for cheap or free things you can do on your doorstep.

Secondly, if you are going to go away,

go away once every other month if you can, rather than once a month,

and thirdly, look at the overall cost so that

then you know exactly what you're spending and what that means for

your spending the rest of the year.

There is just one other tip, as well,

which means that you can still go away, which is house-sitting.

House-sitting? What's that about?

So, when someone goes away on holiday, you move in,

water their plants, look after the house, make sure it looks lived in,

but what you get is a really low cost or free,

depending where it is, break. Yeah, that does sound good.

Be interesting, wouldn't it?

Definitely.

Wow. If they swapped hotel stays for house-sits and took advantage of

free opportunities on their doorstep,

they could save

4,800 smackers a year.

With another big saving delivered, Sarah's visit is about to end.

But, before she goes, Pennells has one last bit of advice.

We're talking about saving and how much we're going to help you to save

but there is one thing that I just want to talk to you about.

It's actually not about saving money, it's about

spending a bit of money.

What?! Sarah wants to spend money?

This must be important!

I've noticed that you don't have home insurance

or life insurance, do you?

We don't, no.

I've never thought about it.

I don't feel like I'm going anywhere, yet.

I feel young still. You are young.

We've got to be serious. We've got four children.

We need to be prepared, if the worst was to happen.

I suppose you never know what's round the corner, do you?

Unfortunately, you don't. Of course we all want to think that we're

going to live forever, certainly for a long time,

but you don't actually know what life's going to throw at you,

so you need to have plans in place so that,

if the worst were to happen,

Kim or you wasn't left with a mortgage

that you couldn't afford to pay... And a big massive debt.

..once you have to look after children,

so I'd really recommend that you talk to your broker,

have a look at comparison sites and find life insurance

and the same with home insurance.

Unfortunately, houses do get damaged by fire and floods,

nasty things happen.

And, in the worst cases,

it could actually mean you would have to start from scratch.

That is a sobering piece of advice which will set Paul and Kim up with

a more secure financial future,

particularly if they are going to be looking after brother Alex.

A reputable comparison site or insurance broker is a good place to

start, where you will be able to see the cover and the price

that works best for you.

It is something that we need to sort out ASAP, really. Yeah.

Time for Sarah to go.

From now on, Paul and Kim will be on their own,

but if they follow our advice they could save

a whopping ?4,800 a year on food, ?2,500 on clothes,

?1,200 on their mortgage and another ?4,800 on short breaks,

making a grand total of ?13,300.

That extension and a secure home for their kids' future is now

one big step closer.

Well, meeting Sarah and the whole thing has shown us a way to start

focusing to save some money, basically.

Like I've said to Kim plenty of times,

if we save hard, we can do things.

It's all about saving.

Yeah, I think it's made us realise that it's got to stop being a

far off dream. We don't know what's going to happen with Alex.

We don't know how long he's got his eyesight for at the minute,

and the quicker that building's up,

the quicker we are all secure and happy and he's safe.

Yeah, definitely.

And Kim and Paul are here along with personal finance expert

Claer Barrett. First off, you two, you both work very hard,

six days a week, both of you,

and so, no-one could begrudge you spending a little on yourselves.

And on the kids. And on takeaways.

And on food. But there's a point where you have to say, "Whoa."

And I think this is it. Definitely. It's our wake-up call.

We did work hard, so we thought it was OK to do what we were doing,

but probably not very practical. Think about the future.

What's the biggest lesson you think you've learned?

It would have to be the burger mortgage.

The amount we spend on takeaways, meals out, rubbish.

To see that in black and... Well, in burgers...

It was a real eye-opener for me.

In the film, obviously we spoke about Kim and Paul's mortgage and

you obviously weren't on the best one out there for you at the moment.

What would be your advice?

I know that you've been hunting around to find the best rates.

That's step one. Very good.

But, when you actually find the rate and you actually want to apply for

that deal, don't forget, it won't be an instant process.

It could take as long as two or three months for you to get that

remortgage deal and, in the meantime,

get your finances in order.

There are really tough rules now about affordability.

The lender has to be satisfied that the money they are lending you is

something that you're going to be able to afford to pay back,

so they will want to scrutinise your bank statements.

They will want to see income and expenditure

being spent in a managed, even and orderly manner.

They won't want to see any big spikes going up or down,

because that could mean, in the future you might not have enough

money left at the end of the month to pay back

the bigger loan that you want to take on.

To be honest, Clare I find it a little bit confusing

and maybe contradictory that we talk about

make sure you use your cash, make sure you only

access what's in your pocket,

but here we are encouraging Paul to have a credit card.

Your problem is that you have what's known in the industry

as a thin credit file.

Normally, being thin is a good thing but having a thin credit file is,

unfortunately, a bad thing because it means that there's not enough

information for the people who are giving credit to assess whether

you'd be a good risk or a bad risk,

so they have to err on the side of caution

and charge you a lot of money.

So if you can get a credit card and borrow

a bit of money every month and

pay it back at the end of the month,

then you're showing them that you are a responsible borrower...

Now, you two love a bargain, don't you?

I do. Yes, you love a bargain.

But bargains aren't always what they seem, are they?

Absolutely. That 70% off you see on a website,

maybe when you're doing your vampire shopping in the middle of the night,

and, you think, "Ooh!" You focus on the discount.

Now, I know that Kim and Paul like to go and stay in hotels.

When I go on online hotel booking sites I am shocked, frankly,

by the level of sales pressure that they put on you by saying,

"47 other people are looking at this room.

"There are only three rooms left.

"You'd better book, you'd better book."

I find it really difficult to resist.

Kim, that's the sort of thing I believe you probably get swayed by,

isn't it? That really clever marketing,

telling you how the rooms are going quickly and

how many people are looking at it.

Yes. Definitely. Sat at home on my own of an evening, Paul's at work

and I think, "Oh, that's great.

"Quick, there's only one room left, I need to book it,

"I don't need to discuss it." But we've decided now that,

before I do anything or buy anything, and the same with Paul,

we'll have that conversation. We said in the film that

we need to communicate more about our spending habits.

With all the good advice you've been given,

do you feel more confident about getting Alex in that extension?

Yeah. Yeah, definitely.

We have talked endlessly since filming.

We've decided it's got to happen this year and we're putting plans in

place for it to happen, so watch this space.

Well done, both of you. Keep up the good work.

And keep saving.

It's all about saving.

And if you've got something you're saving up for and you'd like help

from one of our money-saving experts, e-mail us...

But if you are after some simple budgeting tips,

here's a good place to start.

Our website has everything you need to sort out your spending.

We've teamed up with the Money Advice Service to bring you

easy-to-use money-saving tools to plan your budget,

calculate the cost of your car or credit cards,

and give your money a complete health check.

Download them at...

And Claer is still with us to answer some of your questions.

Lauren wants to know, what's the best plan for saving for the future?

Is it a pension or is it property?

Well, actually, it's both.

Lots of young people especially think they have to save up to get on

the property ladder and that they shouldn't worry about a pension,

they should defer that until they get older, put everything into the

plan for the house, but that's actually the wrong thing to do,

because it's the pension contributions that you make

when you're really young that have got the most time to grow

and compound away and become even more valuable when you're old,

so you definitely shouldn't put off starting a pension because you're

saving to get onto the property ladder, even if you can only

pay in a small amount, it will really reap the rewards over time.

Danielle says, I've been with my bank for 15 years and I feel loyal

to them. Is it bad to stick with the same bank for so long?

Well, many people do.

In fact, one survey says that people are more likely to get divorced from

their partner than they are to split up with their bank, but,

like any relationship, it's all about give and take.

What's your bank giving you?

Are they giving you a decent rate of interest?

What are they taking from you?

Are they charging you a high fee, for example, for your overdraft?

These of all the things that you've got to look into if you are

considering changing your bank account.

Also, you might want to make some extra money.

Many accounts will offer you ?100 or more if you switch

within a certain time frame to them and others have got other deals,

like a great mobile banking app that can help you track your spending.

So these are all things to consider.

Thanks a lot, Claer, some great advice, there.

And thank you to all our guests today as well.

And not forgetting you at home, too.

We hope you've picked up some more money-saving nuggets to help your

cash go further. Until the next time...

Cheerio. Bye-bye.

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