Thursday, January 15, 2009
Category:
Consolidation
Recent news from Abbey reports that disposable income has dropped 29 per cent compared to two years ago. The majority of Brits are regularly having to make sacrifices in the run up to payday and current accounts are empty on average 5 days before pay day. As Christmas draws closer, 29 million say that they will have to make sacrifices.
Based on their own research, Abbey found that Brits are now spending around 75 per cent of their monthly wage on essentials. Hardly a surprise, the main dent for the majority of us Brits is due to rent or mortgage payments with nearly a quarter going on this alone. Household bills and food is costing an average of 16 per cent each.
Around 29 million Brits will be making sacrifices over the next few months to help them get through this costly time of year. Initially, the most likely pleasure to go is socialising, with 43 per cent of us giving up going out when we’re running low on funds. New clothes and cosmetics are next to go with 17 per cent and 6 per cent of us giving these up. Some people are even happy to give up food at the end of the month rather than give up anything else.
Commenting on the survey, Steve Shore, Director of Banking at Abbey, said: "A staggeringly high number of people regularly fail to budget effectively each month and end up running out of cash before their next pay cheque. With disposable income down and Christmas almost upon us, planning your finances carefully has never been more important."
When it comes to budgeting, those living in the North of England were found to be the worst as 67 per cent regularly run out of money in their current account before the end of the month. Best at budgeting are said to be those living in Scotland, just 48 per cent forgo purchases as the end of the month draws closer. The poorest planners were found to be youngsters. 81 per cent regularly run out of money in their current accounts before the month ends. The best budgeters are reported to be 55-64 year olds, just over half of which run out of money before the month ends.
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Homeowners who have overspent on store cards and credit cards in the run up to Christmas could consider consolidating these in the new-year with a secured loan. One of many options to
consolidate debt, a secured loan can be repaid over a term to suit the borrower, potentially reducing monthly outgoings. It should however be remembered that repaying borrowing over a longer term may increase overall interest charges.
