Sunday 14th of November 2010
Individuals who are overspending each month may decide to start asking individual voluntary arrangement (IVA) questions if their debt burden becomes too much of a weight on their shoulders.
Roger Edwards, proposition director at Bright Grey - the protection specialist - said that despite the period of economic decline the country was going through, people's spending shows "no sign of waning".
He noted that this is mainly a result of Brits being unwilling to give up their spending habits even though the average salary falls short of the amount they require to fund their lifestyle, while other people may be overspending as they have no choice.
Mr Edwards' comments follow research published by his firm that almost seven million individuals' outgoings each month amount to more than they are earning.
According to the study, people are demonstrating that they have little regard for the relation between the amount of income they receive and their expenditure.
The investigation showed ten per cent of the population do not know the total they are paying out compared to the sum of money that is coming in.
"Whilst Bright Grey is not suggesting people change their lifestyle or spending habits, we do urge consumers to be aware of their finances so they can enjoy their lifestyle without having to worry about going into the red," Mr Edwards commented.
By making a note of all incomings and outgoings or holding a meeting with family members to discuss their financial situation, people can plan for the future, he observed.
Those who already find themselves deep in debt as a result of their overspending may decide to seek IVA answers in order to wipe their slate clean and start again.
Earlier this week, president of the insolvency trade body R3 Steven Law told Brits who are experiencing a time of extreme financial difficulty that seeking early advice about how to deal with their situation is the best way to resolve their problems.
By Rachel Powell
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