Prepare for unexpected expenses and save yourself from debt
People in the UK are accumulating a large amount of debt, as they do not plan for unforeseen circumstances, which can eat away at their finances.
It has been estimated that the Brits spent over £45 billion on unexpected bills during the last year.
Nearly 80% of people interviewed admitted that they did not put aside savings for unexpected expenses such as birthdays and car maintenance. This makes a dent in their budget and thus causes financial stability to waiver, as people usually have to run up debt to cover the expense.
The consequences of unexpected debts
Most people admitted that when these unexpected expenses occurred, they relied on their credit card or dipped into their overdraft to bail them out. The consequences? Further charges from the banks for taking their accounts into the red, and extra interest charges when that credit card payment is missed. Those extra couple of bills could be enough to push your finances into a state where a debt solution is your only option.
How can you avoid unexpected bills pushing you into further debt?
An instant cash account will allow you to put aside a little extra cash to prepare for the unexpected. A fund with a balance of around twelve weeks worth of salary will form an emergency aid to cope with whatever unexpected surprises life can throw at us. But
A good way of managing a savings account would be to always make a point of paying yourself first. Savings should become a number one priority and an achievable set sum should be set and adhered to every month without fail, as prevention is always better than cure.
But that, of course is easier said than done. When you're in debt, the last thing you can think about is saving! Yet most financial consultants recommend that people should have at least £500 saved as an emergency fund, before they even start to pay off debt. This way, when the unexpected does occur, a consumer is not driven into even bigger debt.
Already deep in debt?
For some people so deep into debt, saving may seem like an impossible option, while bankruptcy looms over your head. If unexpected expenses have pushed you further into debt, why not call the Debt Advice Trust for impartial debt counselling over the phone? It could your first step toward a debt free future.
