According to a new report from the research from credit checking service ClearScore, 45% of consumers spent more money than they planned to over Christmas, with 60% of 18-24 year olds admitting to spending too much.
The survey also reported that 43% of Brits checked their bank balance less than normal. Furthermore, a third of respondents said they didn’t want to look at their bank balance because of increased spending levels.
Ignoring debt that you have acquired over the festive period can be highly damaging. Not only will it likely impact on your entire year financially, but it can hinder your credit score so that you cannot apply for a credit card, car finance, mortgage or even new bank account. Having a poor credit score can take a while to reverse, too.
Online loan website Wonga SA found similar findings in their recent study. They found that 43% of people responded saying they understood what a credit report was (highlighting that around 60% of respondents didn’t know this) and 77% said they didn’t look at the interest rates on credit applications. This has a greater impact on the individual than they might originally think and is worrying. In a financial emergency, where an unexpected bill is presented to you, an individual would want to have savings to fall back on in order to handle the situation. Without such a fallback, you could find yourself applying for high interest loans and getting into a financial dilemma.
It is important to confront debt head on, deal with the issue, pay it off and then learn new spending habits so that you don’t find yourself in that situation again. With much of the country struggling with managing debt, it is the younger generation who need to be educated at a higher priority. The two studies mentioned here both found that the age group of 18-24 struggled with saving money and with tackling debt. By informing this age group about the consequences of debt and how to manage expenses, it can help them make more informed decisions in the future.
Ignoring Christmas debt is an easy thing to do and on one is blaming you for doing so. January seems like a depressing month, with a long time to wait until payday. It can be all too quick and easy to put off credit card bills and payments, but to a detrimental effect. Of course, the ideal situation would be not to have overspent money in the first case (look at a guide on how to stop spending money excessively here,) but once spent, ignoring your financial shortcomings is the worst thing you can do and there is help available. Try the following:
- Create a spreadsheet of incomings and outgoings so you can see a financial overview
- Write down what debts you have and calculate the interest rates
- Figure out how to pay off the debts in the quickest fashion, without crippling other outgoings
- Get the help of a financial advisor
- For more help, go to debt management websites like The Money Advice Service.
By tackling your debt now, you can spend money more intelligently, as well as saving money and encouraging a healthier financial future for you and your family.