Many people are on the minimum salary or below.
Before people are ready for it they may well find that student and postgraduate loans have to be repaid although their income is still not high.
In addition to struggling to make ends meet and particularly when avoiding the bank manager, bank charges due to cash flow difficulties can start eating into limited income if there is an unauthorised overdraft for any length of time.
Multiple accounts
This is the situation in which a trainee has, for example, one account in the town where the trainee used to live with parents, one in the town where they went to university, and one in the town they are now working. Or, they have accounts with different banks.
Trainees and solicitors generally work long, tiring hours and in consequence managing their finances is not done as well as it perhaps otherwise would be.
Without telephone/online banking it may be particularly difficult to keep track of whether bills have been paid, cheques drawn etc as the trainee may have difficulty getting to the bank and be relying merely on monthly statements.
Managing limited finances is especially difficult if there is more than one account and moneys have to be transferred between accounts and/or the bank cannot see that the overall financial position is better that than indicated to them by the only account they have for the trainee.
Lack of communication
Banks know that in the early years of a legal career money may be tight.
Banks may be able to help if they know what the problems are, for example, by giving an overdraft, even on a probationary period, or by freezing interest on an account – in some cases they may even be able to write off certain debts or waive the right to impose bank charges.
Banks can only help find a solution if the trainee gets in touch with them and discusses things.
More often than not, however, trainees avoid the bank manager, perhaps because they fear their credit cards being cut-up or suffering from some other penalty which will make life worst than it is now, or perhaps through fear or embarrassment about their situation. They may not have talked to their peers. They may feel that other people are not in the same predicament.
3 Money Problems and Citizens Advice Bureaux (CAB)
Most trainee solicitors will know something about debt from their training in litigation, and from life as a student. But whilst it is relatively simple to give other people advice, it is sometimes difficult when the problem is your own and you are emotionally involved and subjectively involved. If you feel that you would like assistance with money problems whether debt, tax, or benefits related may find CAB can help.
- CABs have trained money advisors. They can help with guiding clients through dealing with
creditors, prioritising debt repayments, writing letters to creditors etc.
- You should check whether they can see an advisor at a convenient time, perhaps after work.
4 Managing your money – the dos and don’ts
You should do the following:
- Speak to a bank advisor to plan your finances to make the most of your money.
- Put some money aside regularly for gas, electricity and phone bills.
- Cut back on all unnecessary expenses (clothes, holidays, etc)
- Keep a regular check on your bank account, i.e. by phone or using the internet.
- Get a part time job as long as it doesn’t interfere with your studies.
- If you have a mobile phone watch out for high call charges and other costs.
- Plan your finances
- Switch credit cards if you have a high interest rate
Don’t do the following!!!
- Try to avoid buying new course books if you can. Buy second-hand books from students in the year above you.
- Don’t run up an overdraft or go over your overdraft limit without speaking to your Bank Adviser.
- Never commit yourself to a finance company, a personal loan or interest-free loan without checking whether you can afford the repayments.
- Don’t see credit cards as another source of funding.
- Don’t forget to pay your gas, electric and phone bills – make them a priority.
- Don’t live above your means, even if it means you can’t do what everybody else does.
