Finance Experts Predict Consumers to Be Buried in Debt by The End of 2018
The Personal Finance Society has sent out a stern prediction in the form of warning to millions of people who take delight in borrowing and swimming in an ocean of debts. Outrageous bills acquired in December through credit cards prompted this wake-up call as P.F.S expressed concern that these debtors would soon find themselves in “a chasm by the end of 2018”, except they retrace their steps.
Several reasons for this insanity among borrowers were identified. Exorbitant car purchases and rentals, with credit cards, are two determinants, in addition to rising rates of interests and increment in prices of goods which outweigh annual earnings.
The levels of debts have almost gotten to its peak, worse than we have during the 1980s, says a financial expert and the chief executive of P.S.F, Keith Richards. He explained that people have gotten so deep into debt that total individual liquidation is inevitable, and many families will end up putting up their homes for sales.
But stressing this assertion, the result of a new study obtained from the desk of Institute of Fiscal Department Studies showed that 1 out of 7 low-earning families is going through steep debt issues, unlike rich families who recorded only one out 22 families. This shows that poor and average income families are more vulnerable to borrowing.
Keith went on to say that savings will not solve anything because, by the first three months of last year, people only stashed aside 1.9% of their wages for savings while the rest went into financial expenditure. That record was the poorest saving percentage since 1963. Corroborating his points, a note of warning was also sounded by the organization responsible for budget planning that by 2021, the percentage of family debt would have risen to 45%.
You might be a victim of uncontrollable borrowing habit; then we have this financial advice for you.
1. Know what your debts entail
Start by requesting the report of your credit cards and expenses from your bank agents like ClearScore and Equifax. All your loan agreements will be sent to you.
Richards advised people to pay up their debts regularly on a set date with their savings; this will reduce their loans and interest rates. Ensure to put all your expensive loans into one. Moreover, getting a 0% credit card and using it cautiously will help you maintain low debt burden.
Also, use cash on some purchases to avoid using money cards all the time. Always budget your daily expenses too.
2. Set daily saving goals that are attainable
Try saving up at least 1p per day and make sure to increase the amount stashed away every day from 1st January to December 31st. When it’s time to make your account, you will be surprised that not less than £600 worth of coins would have been piled up by you.
3. Make sure that the records on your credits are without faults
Go to any credit agent that knows about credit associating and ensure to clear off any faults and implicating signs in your records, for instance, a situation whereby your name must have been used to file forged applications.
4. Don’t delay your bill payments
Keep to this principle to maintain steady credit records. Don’t keep a robust balance on your card else you will scare lenders away because they will suspect that you won’t be able to pay up at the needed time. Minimise your loan applications in order not to choke yourself of excessive debts. Discard money cards that are useless to you.
6. Free up your unused credits
Spend your savings on needs and avoid wants. When money is spent on wants and cravings such as car purchases and insurance on your house, then it becomes wasted. Instead, settle power and gas bills. Use resources found on MoneySuperMarket.com to make further inquiries on how to cultivate this habit more effectively.
Cancel all your subscriptions and fees that you don’t use or need. This principle will help you lay aside £300 in one year.
8. Update your status details
In case there are previously married couples who had been separated from their spouses or lost them to death, they should ensure to erase the names of their former spouses from all joint banking transactions to detach their own credit records from the one belongs to their former partners. This step will prevent extra debt accumulation.
9. Get ready for unexpected circumstances
Always live for the future and set up shock absorbers in case something goes wrong suddenly like sickness or accident. The best step to take is to get protection and life insurance which will credit your account with some amount of money every month.
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