Personal Debt – Lesson Learned?
The Recession is over according to Government officials and the UK is making a slow recovery, but have we learned our lesson?
In recent years personal debt has risen to unprecedented levels, £3.2bn to be exact, and some experts have claimed that this has been a factor in causing the Recession.
Excluding their Mortgage, the average person in the UK owes in excess of £6,000. In fact, in 2008 there were more credit cards in the UK than people.
The average person's £6,000 debt is spread across credit cards, loans and overdrafts, with loans accounting for a significant proportion of the debt.
A recent survey suggests that people are borrowing so much in order to purchase such things as cars, holidays, gadgets and home furnishings. The average person has used £646 of the £6,000 to pay for home improvements. In short, despite various warnings from the Government and leading economic experts which call for people to manage their finances responsibly, people are getting themselves into debt in order to satisfy their wants rather than their needs
However, perhaps one of the most concerning findings of the survey is that approximately 25% of people use credit cards or overdrafts to meet the cost of everyday living, paying for such things as petrol or food. Sadly, the prediction is that this may become the case for many more people as price increases predicted in these areas become a reality
If all of the above isn't enough cause for concern then the following fact may well give you nightmares: 42% of people are now relying on credit just to make it to the next payday, running out of money as early as the 20th of each month. Ironically the most common reason quoted for this financial difficulty is the need to meet highly expensive credit card bills. Clearly, if this is the case, the vicious circle of debt that many people in the UK have fallen into may prove to be harder to break than first thought
Considering all of the above it seems apparent that some people in the UK continue to borrow irresponsibly for the sake of satisfying their wants and whims. Those people are testament to the fact that to a worrying extent we have become a nation of consumers concerned with the here and now and blind to the financial consequences.
On the other hand some people who have behaved responsibly with their finances have simply become helpless victims of the economy, losing their jobs, seeing a sudden drop in their investment income and a hike in the cost of living. These economic victims are simply clinging to credit as part of their monthly battle to keep their family financially afloat
Unfortunately, which every explanation you accept as the truth or feel is more likely, the simple fact is that either way the outlook is not good. If we as a nation have any hope of regaining control of a tumbling economy, we need to first learn a very important lesson:
Whether we pay now or later, we still have to pay
If this is the case, perhaps we have failed to learn our lesson.
Questions and Answers
With so much advise out there, how do you know which advise is the best and which is right for you. The truth is no advice can be ranked best. Advice regarding your finance should be based on personal circumstances.
There is no doubting that the Credit Crunch and resulting recession has elevated the importance of the role of an independent financial adviser. With the ‘unexpected’ never too far away, in terms of job security and current financial wellbeing it has never been a more critical time to consult with an IFA to really maximise your present and future business or personal financial matters.
There are actually 3 essential classes involving personal analysts.
With the rise of the internet and people thinking they can do it all themselves and save money, the role of an independent financial adviser is actually more important than ever. There is so much information out there, and so many people who like to call themselves experts but really are not, that building a relationship with an adviser is a real advantage.
Independent Financial Advisor can help their clients achieve their financial goals in the most cost-effective manner, because they are able to represent many insurance and financial companies.
Finding a new financial adviser can be a daunting task. We hope you will be able to use the following ten questions (and suggested answers) to ensure that your new adviser meets your needs.
One of the main hurdles that most individuals have to get over when it comes to achieving financial freedom is personal debt. There are a number of things that can help you to create financial obligations for yourself--and there are also a few ways to keep your money in order so that you can become eligible for the major purchases you've always wanted.
Do you have a tough time getting debts from your customers? Maybe it's about time to employ a collection agency in Los Angeles. This will deliver much more convenience on your company's debt managing.
Debt is technically the amount of money owed to a company, person or association. It can be a form of services, goods or cash. Debt can be represented by secured and unsecured loans such as credit card, personal loan and car loans.
Debts refer to amounts owed to someone or to a company. Unsecured loans usually spin out of control and lead to multiple debts. People have a hard time avoiding getting credit cards and applying for loans because of the various companies that offer low interests.
The debt consolidation process is usually sought after by people that are trying to avoid filing for bankruptcy while settling all their outstanding balances. This is traditionally a process offered by specific lending institutions that take all outstanding balances and roll them into one affordable and lump sum balance.
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Payment Protection Insurance has been the subject of vast amounts of media speculation in recent months.
Life insurance is a hugely popular type of Insurance. Many people purchase this type of Insurance at some stage in their life and as such most people have an understanding of the basic details of how this type of policy operates. Despite this understanding many people purchase Life Insurance and end up paying higher monthly premiums than necessary without ever knowing that this is the case. You could be one of these people.
Mortgages can be extremely confusing and sometimes mentally navigating this topic can seem almost impossible. However, for most people their Mortgage is the biggest and longest financial commitment they will ever have and having at least a basic understanding of some simple facts can make a huge difference
Whether you're trying to save money for a specific purpose or would simply like to reduce your outgoings, have a look at our expert tips for saving money.
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