Wednesday 10th of February 2010
If your unsecured debt commitments continue to eat a large amount of your income then it could leave little cash over for treats for your kids, although an individual voluntary arrangement (IVA) could prove to be of assistance.
As a parent you may feel guilty that your credit and store card repayments mean that your children get to see very little of your money.
Just under ten per cent of children have a part-time job to earn a bit of cash, Halifax reveals, which could help them afford the treats that you are unable to give them because of the need to service your debts.
If you are worried how previous excessive borrowing will impact upon your loves ones’ futures then you may want to start asking some questions on IVAs to see if they are suitable for your monetary needs.
An IVA can merge your credit and store card commitments into one, monthly, reduced-rate repayment. With less to fork out every month, you may be able to give your kids a bit more of a helping hand when it comes to purchases.
While you may feel guilty about the state of your finances, Flavia Palacios Umana, head of savings products at Halifax, states: "It is very reassuring to see that many children are getting into the savings habit at an early age by working to save up for something special.
"Cultivating these savings habits will stand them in good stead in later life."
It could be the habit of spending money that you do not have which has left you in serious debt, especially if the need to splurge has pushed you towards credit and store cards.
Rather than leaving your kids with a legacy of debt, clearing what you owe through an IVA may mean that in around five years’ time your finances are in much better shape.
Without debt draining your income you could start saving for your kids’ futures, whether it is putting a little aside to help buy a new car, contribute towards a mortgage deposit or help with university costs.
By Mark Waterman
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- An IVA could help you meet your dream of paying off your mortgage
