Millions of Hard-Up Brits ‘Don’t Bother to Budget’
January 29, 2015
As many as 21 million UK consumers are failing to set themselves a household budget and finding it more difficult to manage their money as a result.
That’s according to the debt charity StepChange, which carried out a survey recently looking at financial habits around the country to coincide with Debt Awareness Week.
With millions of households in Scotland and throughout the UK finding it tough to make ends meet, the charity group wants to see more of us making detailed budgets and planning our spending more precisely.
StepChange also offers a variety of advice to anyone struggling to cope with debts or with imbalanced finances, starting with the suggestion that everyone should always know what money they owe and to whom.
According to the charity’s research, around 13 per cent of people leave their bills unopened because they’re worried about being unable to afford what they’re being asked to pay or because they’re embarrassed by their lack of financial flexibility.
“Many people are living on the edge of their financial means and even a small reduction in income or increase in living costs can tip them into problem debt,” commented Mike O’Connor, StepChange chief executive.
“It is crucial that people do not feel scared or embarrassed by having a money problem, but instead take positive steps to bring their finances under control.”
According to StepChange, indebted consumers should not always respond to payment demands simply by paying off the creditor that sends out the most or the most threatening letters. Rather debtors should look to prioritise in a more considered way, with essential bills, such as mortgages, council tax or rent arrears, those that should be settled soonest.
Budgeting effectively and identifying ways in which outgoings might be reduced can make a big difference to the financial fortunes of anyone struggling with debts. But 56 per cent of respondents to StepChange’s recent survey said they either have no budget at all or they have one but don’t stick to it. The charity is urging men and women right around the country to work harder to understand the full scope of their financial situation, even when it is a source of real worry and concern.
Another problem highlighted by the organisation is that of a reluctance among many indebted individuals to seek advice and expert support in time to turn things around. Half of people who end up grappling with significant levels of debt don’t reach out for support or advice until at least a year after they first began to worry about the state of their finances.
“Problem debt can hit any of us and seeking free confidential advice as soon as possible is the start of getting back on your feet,” O’Connor concludes.
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