Think Money

Think Money

September 23, 2011 11:10 ET

A Careful Budget Could Reduce the Risk of Debt Problems

LONDON, UNITED KINGDOM--(Marketwire - Sept. 23, 2011) - Financial solutions company Think Money has advised consumers about the importance of a carefully planned budget to help improve financial security and reduce the likelihood of facing debt problems in the current climate.

The comments follow research by supermarket chain Morrisons, which found that 51% of its customers now check the price of every item before they buy. The supermarket's chief executive, Dalton Philips, said that customers were becoming increasingly 'professional' in their shopping habits - indicating that many people are becoming more 'hands-on' about saving money.

More encouragingly, the findings also revealed that spending on credit cards fell by 8% in the last six months, showing that shoppers are becoming more debt-conscious in the current climate.

An expert at Think Money commented:

"It's reassuring to see that consumers in the UK are becoming more proactive when it comes to reducing their shopping bills - particularly as we continue to see many people's finances squeezed by rising living costs and falling disposable incomes.

"Reducing your weekly food shopping bill could improve your finances slightly, but it's important that these cutbacks are included as part of a wider budgeting plan - which could help you to make your money go even further and reduce the risk of debt problems.

"Indeed, some people end up falling into debt because they haven't planned their finances in advance, and find they have to turn to credit cards and other forms of borrowing just to cover basic living costs. However, a well-planned monthly budget could give you the reassurance that all your expenses are covered - not to mention providing increased financial security in these uncertain times.

"Bearing this in mind, people should take some time to plan their finances at the start of every month. Work out the total income you receive in your account every month: including your salary and any benefits you may get. Then, work out all your essential monthly outgoings: so all your priority living costs, such as food, utility bills and your rent/mortgage, and anything else you regularly spend money on.

"If you subtract all your outgoings from your total earnings, you'll be left with your disposable income. If you already have any unsecured debts you're repaying, this money should be prioritised in your budget for your repayments - so you can be confident that you won't struggle to make them each month.

"It's a wise idea to put whatever disposable income you may have left into savings - which could help you to cover any unplanned costs you may face, such as your car breaking down or your washing machine needing repairs, and give you an 'emergency fund' to fall back on should you face any costs you haven't budgeted for."

"Anyone having difficulty repaying their debts should get professional advice as soon as possible."

Notes to Editors

Think Money is one of the UK's leading financial solutions providers, delivering a comprehensive range of financial solutions, including loan, insurance and banking solutions.

Think Money defines its mission as 'To educate, rehabilitate and advise on all aspects of financial management'.

For more information, visit the Think Money website at http://www.thinkmoney.com/.

Or visit Think Money's debt consolidation section: http://www.thinkmoney.com/debt/debt-consolidation/.

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