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Don’t be in the dark about debt

walletIt’s not easy staying in the black these days unless you’ve a good income. I am lucky that I have (dwindling) savings which I can call on if I’m running short of cash or have an unexpected bill. But I also just try to keep spending under control. That means going without that new book, shirt or whatever until I can afford it – by which time I’ve usually decided I didn’t want it in the first place.

I don’t mean to sound smug and I do realise I’m lucky to have savings and no mortgage. And I was at university long ago, so don’t have a debt from being a student. The most recent report from The Money Charity has some scary debt figures: the average consumer credit (ie not mortgages but personal loans, cards etc) is £7,699 per household or £4,045 per adult. The figure for total household debt including mortgages was £58,119. The typical household has £2,604 outstanding on credit cards which would take 26 years and four months to clear if you only paid the minimum back each month

Of course, if you’ve got a good, steady income and can afford repayments then debt is OK – although keeping a debt on a high charging credit card should be avoided at all costs. However a new poll from Nationwide Building Society found that of those in debt 57% were having problems thanks to the money owed.

Unsurprisingly, most (58%) said they had never tried to get help with their debt. I think this is because it can be so much easier to stick your head in the sand than admit you have a problem: and to be honest, I think I’d find it hard to seek help for debt problems if I had them. However, there are several good ones including the Citizens Advice Bureau, Step Change, National Debtline, the Debt Advice Foundation and the Money Charity. They can help you find out where the money goes and assist you in approaching lenders to ask for help – maybe by suspending interest for a while. What you need to make sure is you use a free charitable service, not a debt management company as their plans could cost you money – charity Step Change says it could be £4,000: money that could otherwise be used to reduce your debts.

And see our getting out of debt guide here

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Monday, 15 October 2018