We’ve known that we’ve been heading this way for some time, but recent data has highlighted that the problem has increased by 20 percent in the last five years and the rate of decline is now worse than what it was 35 years ago. As a collective unit, the people of the UK are borrowing more than they are putting away.
The news basically means that we are heading towards a spiral of debt. Nobody has any money in the form of savings which consequently means people are borrowing more to fund the gap, and the cycle goes on.
People need to get on an even keel as soon as possible because once the debt spiral is entered, they will more than likely never be able to get out of it. It is often the case that if people have started borrowing more than they can afford in their twenties, this practice will haunt them right until their retirement and they will never be able to get in front of their finances.
It’s easy to say that people should never spend more than they can afford but with price rises hitting people from all angles people cannot be blamed for getting into the odd spot of bother.
People should be honest about any financial predicaments that they are in. If people are struggling to put money away and are living on the breadline, they need to reassess all their incomings and outgoings and try to find a strategic way to minimise spending.
Things such as cutting back on food and energy bills, if possible, will help. Both these things, if not constantly monitored and adjusted on a monthly basis, will eat into every spare penny of hard earned cash.
Comparison sites are the best tool to ensure you are not paying more than you should be, and as for food bills, people should switch supermarkets and alternate where they shop to see if any savings can be made. Even if it is just a case of swapping some branded products for the supermarket’s own range, it could be the difference between £20 per shop which would mean an extra £100 per month saving to plow back into the debit account – it’s that simple.
Whilst we appreciate that people are feeling the squeeze and are struggling to juggle the figures and balance the books, we also have a niggling feeling that the reason people are borrowing more than what they are putting away is that they don’t appreciate the seriousness of the savings issue.
In generations previous, people understood that as soon as all necessities were paid for, the rest of the money that was left over would be plowed straight into savings. Nowadays, that mentality has changed. People use the money to socialise and have a lackluster attitude to saving. It’s like people think they’re too young to think about the future and want to live in the here and now.
On one hand, there is nothing wrong with this attitude; if people earn their money it is only fair and proper that they should be able to enjoy it. But some grown-up mentality should also take precedence. People are living longer into retirement, so a decent portion of finance needs to be easily accessed once out of work. Many people are still not putting into pensions either, which is something that absolutely needs to change.