Wednesday, April 29, 2009
Category:
Personal Finance Tips
According to new research by Fairinvestment.co.uk, Brits are being penny-wise amid the currently challenging economic conditions.
In fact, the study revealed that 44 percent would save any extra money that came their way. This indicates a careful approach to personal finance as credit becomes less attainable.
Just 10 percent of those surveyed said that they would spend any extra money in their possession on luxury items such as CDs, clothes and make up. In contrast, 26 percent view paying off debts with such extra money as being of paramount importance. A further 6 percent would use this money to make overpayments on their mortgage. However, 12 percent would put this money towards essentials including food and utility bills.
Chartered financial planner at Fairinvestment.co.uk, Sharon Bratley, commented: "It is good to see that saving is important to so many people. However, although having a financial cushion is wise, it is also wise for people to pay off any debts they have first, which are likely to be charging high interest rates, and then save any extra cash.
"The low percentage of people who would choose to spend any extra cash on luxuries is also encouraging and suggests that Brits are being more careful with their money.
"Making overpayments on a mortgage, if allowed, would also be a smart move in the current financial climate, as house prices are falling, the more equity a homeowner owns, the stronger position they will be in if they have to re-mortgage any time soon.
"And, as the average savings account rate falls to near zero, paying off the mortgage early may work out more profitable than putting the money in a savings account.
……………………………………………………………………………………………………
Those homeowners who have chosen spending over saving and as a consequence have mounting credit and store card debts, could consider consolidating these debts with a secured loan. Secured loans are one of many options to
consolidate debts and this option could potentially lower monthly repayments. It should however be remembered when consolidating debts that this may increase the amount paid back overall and extend the repayment periods of debts.
