To hope that the CofE can kill off Wonga, but think they might struggle?(229 Posts)
I would love to see an end to Wonga, but we already have credit unions, I dont know how we can change the culture.
IIRC, with our credit union, you have to save first, then you can borrow. Maybe that is what is putting people off.
Owllady - at its most basic you need to understand exactly what money you have coming in every month and then you work out what goes out each month.
With the outgoings, look at the absolute can't do withouts first, so that is rent/mortgage, council tax, fuel, water & food. Those are the things without which you can't live in your home. Then you look at all the other things.
After you've done that, you can start looking at whether you can reduce any of your expenditure by swapping providers, changing supermarket etc.
MoneySavingExpert www.moneysavingexpert.com is a great website full of lots of great tips on all of this stuff.
I think food is extortionate too. A small trolley full of food now is near to or over £100 - i dread to think what those large trolleys come to (I wont allow myself to have one anymore just incase I have the urge to fill it up!)
I will oput my hand up and admit I am rubbish at dealing with financial issues but partly it's because I am a carer of a severely disabled child, get very little sleep, have had to give up paid employment to care and dealing with finances comes after the care and all the appointments (and sometimes me getting a better night sleep)
If any of you though have any advice, simple advice, on what would make it easier for me to manage I would be very grateful, thanks
Jux, I think many desperate people wouldn't be desperate if they had a basic understanding of money in the first place. Not all of them, as there will always be that unforeseen crisis, but quite a lot.
I have well educated wealthy friends making similarly unwise decisions to Audrina's Dad. It is all fine while the money is rolling in, but something awful happens and it all goes horribly wrong - when there was no need for it to have gone wrong. Similarly, I work with young people and it frightens me how naïve and clueless they are about money. You can immediately tell the ones whose parents have passed on nuggets of wisdom because the ones whose haven't, literally have no idea how it all works.
Also, we live in such a consumerist, conspicuously consumptive society. People feel that they have to have a ginormous TV, x-box, laptop, ipad, sky tv etc. People will actually get into debt just to have these things. They get themselves into long-term hire purchase agreements, which one at a time don't seem too onerous but before they know it, they've accumulated a lot of them & then their overtime is reduced or hours are cut back or even worse they lose their job & they can't stop repaying all the loans, so money for food gets tight.
My Dad lived and worked in the best of economic times and which had the most social mobility we have ever seen. East-end evacuee one of seven children, practically illiterate, left school at fourteen. Plentiful jobs, never out of work, private (intact) pensions, moved up the housing ladder.
He took 60K out of his house as an equity release seven years ago and wasted it all as far as I can tell because he's still got credit and store cards he's paying off from the eighties and nineties. He won't ring them and say he's a pensioner with one income (mother is in a care home) and renegotiate even though a few are his wife's, and she has no income bar £10 after her care is paid for.
Anyway, he has no idea about compound interest. None. He thinks in twenty years time my sister and I will just pay off the original amount with a few quid on top for the interest and we'll have a nice inheritance. He took it out when house prices were at their peak and the value has gone right down since then. It isn't going to cover it.
But it's not an immediate problem for him and neither is money generally. He hasn't watched Sky in over four years and is still paying fifty pounds p.m for it, too lazy to make the phone call. He also won't consider me helping him claim he was mis-sold the equity release because it would make him look stupid.
It isn't only people in poverty who make daft decisions and yes, desperate times call for desperate measures.
I agree it's not about poor people, but I'm not entirely sure it's uneducated people - though understanding how compound interest works would make a difference I think. No, it's more about desperate people with nowhere else to go.
No one in our country should be in that position. We are supposed to be civilised.
We are trying to shut the stable door after the horse has bolted. You can't expect everyone to think sensibly about money in that way, if they have nowhere else to turn. If that's your choice - or the alternative is the proverbial man who comes round every week and breaks your legs when you can't pay - then you would go to Wonga, wouldn't you?
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... and, as you say, it's even more important the less money you have.
Postbellum you have mentioned something so important! I have been reduced to gnashing my teeth and tearing my hair in frustration trying to work out whether TalkTalk is cheaper than Tiscali, or which energy provider gives a better deal. I wish wish wish that schools would teach our kids how to manage money. Then maybe one of them could teach me ...
To borrow £200 for 7 days costs £19.89 with Wonga. That is about 10% of the total amount borrowed. It is still a lot of money for a very short term small loan.
I don't think it is about poor people, I think it is about uneducated people. As I said further up the board, the less money you have the better you need to be able to manage your finances. Unfortunately, there is no domestic finance education done at school, so you are at the mercy of your parents knowledge. If they don't pass on anything useful, young people leave school clueless. This is a ridiculous state of affairs for a first world country in the 21st century. So many debt problems could be avoided by better planning in the first place.
I agree. I wouldn't use them but essentially you're right. Use them as intended and you won't get burned.
I don't look down on people that use Wonga and I've not accused any of their customers of lacking in moral fibre either.
It's simply a case of elementary math for most cases and I would bet that a lot more hard up people, as per your example, do not resort to Wonga et al. Of course there are extreme examples but it is an exercise in futility to resort to Wonga if you know that you're up shit creek without a paddle.
If you're on half measures and will be for the forseeable future then you will know money is going to be tight. Thus money is going to be more important than any other resource you have. In which case you simply do not piss away money on interest repayments and put yourself in a decreasing spiral of poverty.
The logic is incomprehensible.
It's not a lack of moral fibre but definitely a lack of something - hence why these companies are thriving.
Rob - we borrowed £200 for a week not a month! It was the last week before payday. I think the interest was in the £10-£15 mark, which, as a true 'one off' is reasonable to me.
I've seen an interview with one of the directors (or similar) of Wonga, and can remember he said the interest on £100 borrowed for a week would be the equivalent of borrowing £100 off a friend for that period and then buying him a couple of drinks on the weekend to say thanks. If Wonga is used 'correctly' then that's an accurate way of looking at it really.
Also would like to add that APRs have little value when discussing short-term loan firms such as Wonga as it is an Annual Percentage Rate.
I really don't see that trying to shut down companies like Wonga is the way to go. Cash for Gold, Pawn Shops, Cash Converters, Buy as You View, Bright House and so many more...they are all (lets be honest) generally aimed at the 'poor people'. All have higher percentage rates for relatively low-value loans. Is the answer really to remove them all ? Or should we just be looking at better regulation and caps on this type of industry?
Shouldn't even the 'poor people' be given enough credit to make decisions for themselves?
Gah. I was right first time. Not even going in one ear.
BTW, I completely agree that Wonga is hideously expensive, exploitative and can bring further suffering on people who are poor in the first place.
This doesn't make me imagine that everyone who borrows from them must therefore be either stupid or greedy.
ParsingFancy Fri 26-Jul-13 20:51:58
Last year ATOS fucked up my medical assessment - and admitted this. Nonetheless I spent 12 months on half-pay ESA/incapacity and 5 months on zero ESA.
And there was a subsequent post by someone who would have been unable to feed her baby for a week without a loan.
All of these scenarios have appeared on this thread, and frankly even if they hadn't you would be able to guess they exist. This thread is discussing Wonga and the reasons people might borrow from Wonga, and the possible provision of "other avenues" by the CofE.
Your interest in the thread appears to be simply to turn up and look down your nose at people who might have used Wonga (I haven't, btw) and accuse them of various forms of lack of moral fibre.
Instead of grasping the astonishingly simple fact that sometimes the timing of cash flow does not match the outgoings necessary to keep one alive, healthy, housed, and in a job.
That's not derailing. That's responding/commenting on the typical scenarios that have been discussed thus far. If this thread discussed 5 month durations then the nature of it would have been very different. Of course you would need to consider other avenues as one cannot starve for 5 months.
Ah, but now you've shifted the goalposts. Previously you were talking about a week, hence my quoting your statement.
You clearly have a very different issue and in which case have very different requirements. Wonga is a short term lender so 5 months doesn't fall within their terms of service AFAIK.
<waits for derailing-type answer, as T won't be able to answer that>
Technotrobe, what is the longest period you didn't eat anything at all for?
I've just received a lump sum of thousands of pounds from the DWP who didn't pay me for 5 months.
Are you seriously suggesting that I could have survived 5 months with no food?
Technotropic, I agree with everything you've said. The problem lies with society today and what people regard as essential. I don't believe you need to borrow money for food in this country.
I think you might need to borrow money for food if you have all the mod cons that people now regard as essential. I don't think Wonga could have traded in the seventies but now, the consumerism that exists in society today, is fuelling demand for quick and easy cash.
LEM....you've just made the point I made, which is, a lot of people who use Wonga and have to service the huge APR attached to the loan, can easily spiral down where the debt is compounded by the interest and they end up owing £5k on a £500 loan.......It's complete madness.
I'd argue that people who are disciplined enough to borrow off Wonga and pay the loan and interest off very quickly should really be financially aware and smart enough not to use them in the first place....I know there are exceptions and no offence intended but I'm quite sure Wonga wouldn't be a viable business if it weren't for the people who spend months and hundreds/thousands, servicing relatively small loans off them.
PrettyKitty, the interest you paid for that one month would have paid for 3 quarters of the kids swimming fees (kids swimming is important too in my opinion).
Wonga is a for profit company, It's market driven. As long as there is significant demand, they will continue to trade. It's a very very expensive way to borrow money whether it's for one month or however long.
If used 'correctly' I feel that there is a place for Wonga and co.
We are by no means on the breadline but we used them a couple of months ago...we borrowed £200 for a week. Can't remember exactly but the interest was fairly low. I do have family I could borrow off but I preferred to use a company.
It covered us for the last week before payday after a horrendous month where we had to pay out £500 for car repairs,car tax was due same month of over £100, plus the fees were due for the kids swimming lessons of £100 (please no snotty comments about priorities as that IS a priority for us). It took all of our disposable income plus some and using wonga was actually a completely stress free experience.
I feel sorry for people who get stuck in a debt cycle...but there has to be a certain amount of personal responsibility by individuals. Maybe there should be a cap on these companies...such as maximum debt plus interest can only be x% of an individuals in comings....or a commitment by Wonga to cap interest/fees once the debt reaches x% of the amount borrowed for non-payers.
I do not want to see them close though... They do have a place in the market IMO.
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