Saturday 30th of January 2010
The average household could save up to £5,000 a year by carefully planning a budget and making sure people are getting the best deals they can, a claim suggests.
According to moneysavingexpert.com, families who spend an entire day sorting their finances out could help make headway into their debt, although an individual voluntary arrangement (IVA) may prove effective for those households with debts of more than £15,000.
Special attention should be paid to credit cards, Martin Lewis, money saving expert, says. Households which rely on more than one credit card can find that an IVA answers such a repayment demand.
An IVA can merge these different balances into one, more affordable and manageable repayment.
IVAs can also freeze the often sky-high interest rates on plastic which may push families further into the red, increasing their reliance on credit.
"It’s always surprising to see quite how many different things you spend cash on. Worse still is how much money you truly spend on them. Yet there are always ways to save," Mr Lewis says.
While an IVA can take around five years to repay debt, once finances are back on track, individuals may find it easier to save for the future, giving themselves a fresh start.
By Hayley Jones
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA could be best way to repay unsecured debts
