Can Sound Debt Advice Help You Survive the Recession

Unfortunately, Britain was not ready for the recession which has hit us with fill force. If you are one of the thousands of people in this country which have been affected, debt advice could be the way forward.

In general, UK citizens were better off in 2007 than they were 20 years earlier. Average household net assets more than doubled, in real terms, between 1987 and 2007, to reach an average of £113,000 per person. The problem is that debt levels have increased at a faster rate. Figures state that total household debt in the UK increased more than threefold, between 1987 and 2007.

For more information on debt management, and a number of other professional debt solutions, such as an IVA, simply call Chiltern Debt Management on 0161 927 3388 today.

One survey, quoted in the ONS report, found that people were already finding it more difficult to manage with their income, and that more people were struggling with debt problems in 2007 than in the previous three years.

Some individuals still had relatively little inclination to save for the future. In a poll from 2006-7, 60% of people under pension age felt that investing money in property was the best way to save for retirement. However, only 8% owned any property assts, other than the family home. Two-fifths stated that they would rather have a good standard of living today than save for retirement. This feeling of 'living for today' was stronger among those with no current pension scheme, the report says. Living for today, and wanting everything now, is a key factor in the cause of the current financial crisis.

Saving up for an expensive purchase, as our parents or grandparents did, is no longer the norm. Easy access to store cards, credit card debt and loans has enabled us to live for today, more than ever before. This has inevitably resulted in financial disaster. Consumers are unable to manage their finances, with debt problems that are escalating out of control, and they are turning to debt management companies, for help and advice, in ever increasing numbers.

For more information ondebt management and a number of other professional debt solutions, such as an IVA, please call Chiltern Debt Management on 0161 927 3388 today

The key to managing your money effectively is time. The more time you are prepared to put into managing your finances the greater the return on that investment. The “I want it now” mentality is in direct opposition to this.

The sooner you start managing your own money, the more effective the process becomes. Many people begin to think about managing their finances far too late in life. So rather than managing their money, they end up trying to manage on the money they have left. In general Money Management Programmes ask four questions: What are your financial aims? What money do you have available? When do you want to achieve them buy? And what risks are you prepared to take to reach your goals?

The answer to the first question should be more far-reaching than most imagine. Having a place to live may appear to be essential rather than a financial goal.

Yet buying a house is usually the biggest financial transaction that most people undertake. The amount of money invested in a property will have significant implications in any money management programme.

Lifestyle questions

Identifying financial targets will also help people to answer lifestyle questions. If an expensive car, luxury holidays, or keeping up to date with fashion is an essential part of life, then there will be less money available for savings and investment. Good money management does not prevent you from going on holiday, having a descent vehicle or being fashionable; it merely sets priorities, and puts a cost on your choices. Once the goals are set then timing questions must be dealt with. Retirement is an obvious concern, but when do you want to finish working? What about existing liabilities and commitments? As you look into the future your funding timeline will become known. You can start to assess your savings and investment needs.

How successful you will be at meeting those timing goals will depend on how much left-over cash there is once you have paid for your day-to-day living expenses. The free cash is available for financial planning. But let'’s not forget your existing assets and liabilities. These could be restructured, refinanced or may be sold to release funds, or reduce expenses.

Investing spare cash

Once you have identified the amount of surplus cash you have, you then must decide where and what to invest in. That will require specific advice, but before seeking guidance you should answer the question, what risks are you prepared to take to reach your goals? It is important that you acknowledge your own risk profile. The greater the risk you are prepared to take with your investment cash the larger the reward. There is an important balance to hit.

Having answered the questions and set in place your money management plan it is crucial to monitor and review progress. Perhaps your day-today expenses budget has now increased. Perhaps your earnings are higher than predicted. Perhaps some of your goals are too ambitious. It all takes time, but time does not cost anything and yields much.

Deal with your debts

If you are in serious financial trouble, unable to afford monthly debt repayments, then now is the time to deal with you debt problems. It is important that you seek professional debt advice, and establish what your options are. Your financial problems could be solved with a Debt Management Plan, where a licensed debt counsellor will take over the management of all of your unsecured debts and, by negotiating with your creditors, help you to reduce your monthly payments and eventually clear your debts. For higher debt levels, an IVA (Individual Voluntary Arrangement) may be more suitable, and may allow you to clear your debts in as little as 60 months.

At The Debt People we are licensed to give debt help to clients that are struggling to pay their debts and are now in need of debt advice. As a voluntary member of trade body DEMSA, our debt advice procedures and debt management plan have received OFT code approval. This means our debt management plan exceeds the service standards required by law.

For more information on debt management, and a number of other professional debt solutions, such as an IVA, simply call Chiltern Debt Management on 0161 927 3388 today.

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