With everything from credit cards to overdrafts readily available, it’s perhaps no wonder that many people find themselves slipping into debt. While borrowing more than you can afford or can pay back within a reasonable time may seem somewhat irresponsible it has become a way of life in the UK for many reasons, so let’s take a closer look at what causes Brits to go into the red and how debt consolidation loans can help get your finances back on track.
A Tough Financial Climate
Since the major financial crisis of 2007 and 2008, it’s fair to say that the economy has been sluggish to recover with unemployment and stagnant wages being a reality for many people of working age. This, of course, has had a knock on effect on personal wealth with families struggling to afford housing as well as basic necessities such as clothing, water, electricity and food – in fact, food bank usage has been reported to be at a record high with 1,109,309 emergency food packages delivered by the Trussell Trust from 2015-16 alone.
Such figures reveal that the fight against poverty is very real. People are doing what they can to survive and while there’s sure to be those who rack up debt to help fund a lavish lifestyle, the majority are seeking extra cash just to get by – after all, what do you do if you’re hungry and there’s nothing in the fridge?
Can’t Save, Won’t Save
“Look after the pennies and the pounds will look after themselves,” is a saying which highlights the importance of saving, but when money is tight, putting funds aside for a rainy day can seem like an unrealistic dream. A lack of cash combined with dire Bank of England interest rates can simply make the prospect of opening an Isa or savings account unappealing – especially when it’s hard enough to get through to week without spending every last coin in your purse.
That said, you don’t have to save large amounts of money each month for the sum to soon add up. Setting up a Direct Debit where funds are automatically transferred to a savings account when you’re paid can help you accumulate a nest egg – and this may come in very useful in the future. Similarly, if you’re in need of financial guidance, there are many money-saving and budgeting apps ready to download that could stop you from getting into increased financial trouble.
Believe it or not, taking out a loan or getting into temporary debt can also be helpful in the short-term. If you owe money to many different people, for instance, it could be a good idea to consolidate this debt and take out a fixed rate interest loan to help you pay it off quickly – without accumulating additional charges. While you’ll be borrowing money temporarily, a loan of this kind should help you settle your outgoings promptly and in a hassle-free way.
Debt is certainly a way of life in the UK, but not all debt is as bad as it sounds and there are ways to get yourself back on the straight and narrow.
Disclaimer: As I am not a qualified financial advisor if in doubt about your finances please seek out a financial advisor.
*This is a collaborative post*