Beat Debt Guide

Archive for the ‘Personal Debt’ Category

The Chief Economist for The Bank for International Settlements (BIS) has written a report that states that most of Western Europe including Britain could cause a major crisis at the heart of the global economy as they and other countries such as USA and Japan are chastised for their levels of national debt.

The BIS said the UK’s structural budget deficit will be 9pc of GDP next year, the highest in the advanced world.

They say that Labour’s plan to consolidate the budget deficit by 1.3pc of GDP annually for the next three years is not enough and consolidations along the lines currently being discussed will not be sufficient to ensure that debt levels remain within reasonable bounds.

This analysis helps the Tory claims that markets will not wait patiently for the unlikely event of fast growth to pull us out of the deficit and action needs to be taken quickly. Now that the election day has been announced we will have to wait and see which approach we will be left with but if Labour get to power again, I suspect according to this report, we should be worried.

In either scenario, it’s going to be tough so the best advice I can give is to get your own finances in order and reduce your debts – so don’t delay – start today!

According to a Natwest Survey in an annual poll which surveyed over 10,000 12-19 year olds across the UK the Britrish teenagers are becoming more money savvy.

- Over two thirds of the 10,000 teenagers surveyed say their money management skills have improved during the recession

- Boys are more likely to save than girls – 33 per cent compared to 24 per cent save all or most of their money

- Teens in the North East are the biggest savers while those in the East Midlands worry most about money

- The highest future salary expectations are in London.

It’s good to see that some good news is coming out of the recession and hopefully these teenagers will never need to Beat Debt if they keep out of debt.

New research from moneysupermarket.com shows that five million people (10% of the country’s adults) are permanently overdrawn.

Believe it or not this figure is down from last year when it was 17%.

Kevin Mountford, head of banking at moneysupermarket.com, said “With rising inflation, it is going to be difficult for many to break the habit of living in the red and it may be that more people will fall back into this position as living costs increase.”

So sort your finances out. Endeavour to get out of the red and back into the black. Don’t let your credit cards bills, loan repayments and mortgage payments take over your life. I’ve mentioned before what needs to be done so will not repeat it here. Don’t delay start today!

The Financial Services Authority (FSA) has revealed that the number of new repossessions in the third quarter of 2009 reached 14,000 – a 2.8 per cent rise on the previous three months.

Not a very cheerful statistic for this Christmas but if you’re concerned that you may be becoming part of the statistics make sure you are in control of your finances and have your debts in control.

Assess your own finanaces, look at your income and expenses, create a budget and keep to it. Never give up.

I hope you all have an enjoyable Christmas and New Year.

uSwitch.com have stated that millions of people have applied successfully for credit cards without being asked to prove their income according to the survey.

It is reports (and actions) like this that will lead this country and individuals into a crisis. If people stretch beyond what they can realistically afford then there is a danger that not only will the country go into a recession but the individuals with debt will suffer more than those who have a good grip of their finances.

Get a grip of your finances, start a budget, check your income and outgoings and take steps to ensure your future is bright regardless of the state of everybody else finances.

James Ketchall, a spokesperson from CCCS, said that issues such as high student loans have contributed to a relaxation in attitudes towards debt.

“Once people are used to the idea of debt then its easier for them in the future, to take up credit cards and personal loans, because the stigma has already been removed by taking out student loans during university,” he said.

To avoid falling into debt he stated that ensuring there was “a tight reign” on outgoings was vital.

“It’s important for people to realise that they need to be able to pay back what they are borrowing,” he added.

As stated previosuly on this site, make sure you have good control of your finances so that you can be in better shape moving forward into the future. If you are already in debt – then work to Beat Debt, starting today!

Gordon Brown last week gave his 11th Budget speech and would you believe it, he’s still speaking those words…

….And by holding firm to our commitment to maintain discipline in public sector pay, we will not only secure our 2 per cent inflation target but create the conditions for maintaining the low interest and mortgage rates that since 1997 have been half the 11 per cent average of the previous twenty years. And we will never return to the old boom and bust.

Now forgive me for being cycnical, but surely the good times can not role on forever?  If they do then great.  Just think how much better it will be if you didn’t have a mountain of debt.

However, if the economy does start to stutter and we end up in a recession then even more reason to make sure you’re ready to beat debt and get on top of your personal finances.  Whether it’s mortgage arrears, credit card debt or struggling with loan repayments, make sure you stop and take a look at your finances so that moving forward you yourself don’t go bust!

Somebody I was speaking to today said he was relieved to have paid off his mortgage.

Despite wishing, like many other people, that I was in the same position I asked him why.

He said that the country can not go on like this and that there is going to be a “big bust” after the boom years despite Gordon Brown’s mantra of no more boom and bust.  I have to say I agreed with him.

Fair enough I hear you say but what can we do about it?  Admittedly you can’t control what the government does (though they are elected by us so perhaps you could have a chat with your local MP) but you can control your own personal finances.

If you are fortunate enough to be able to pay off your mortgage your outgoings should be substantially reduced.   Remember that if you have other debts it is best to pay off the debts with the higher rates of interest first.

I would suggest that if you didn’t make a New Year resolution that you make February the month of reviewing your personal situation so that if when the economy goes into a spiral downward trend you are better placed to deal with it and come out of it financially healthier.

The country is getting more and more into debt.  Individuals are getting more and more into debt.

Are you one of the individuals who has got more and more into debt?  Have you already spent too much on Christmas presents?

This is just a warning.  Things are going to explode soon… it can not carry on like this.    People are living in one glorious bubble of living life on “credit”.

The government is continuing to spend money like there is no tomorrow.   If we,  as individuals, continue to do the same it will be all the more painful when this run of spending hits the buffers and the economy goes downwards and there is nobody to borrow money from.

Take note, if you know you have spent too much on Christmas then consider taking some items back for a refund and buy smaller presents or better still, if really struggling, make something – be creative – it’s all the more personal.

Remember, Christmas is not about lots of big presents.  It’s the thought that counts and I wish you all a happy festive Christmas whatever your circumstances and wherever you are in the world.

The BBC News website has stated that:-

People in the UK are borrowing on average almost twice that of citizens in other western European countries, a report has found.
Unsecured UK lending, such as credit cards, was £216bn (319bn euros) in 2005 – more than a third of all new non-mortgage borrowing in Europe.

The average British resident owes £3,175, business research firm Datamonitor said.

Total UK personal debt, including mortgages, is about £1.2 trillion.

The report, which looks at the market for borrowing via personal loans, hire purchase, credit cards and overdrafts in 16 European countries, said that the UK had an “insatiable appetite for credit”.

The average European owed just £1,558 in unsecured debt.

Is this country heading into a sprial of debt?