Daily Archives: August 14, 2008

Bankruptcy, Checking & Savings, Financial, Financial Management, Financial Services, Financial Solutions, Loans, Money

Financial Consequences Of An Expensive Holiday Can Outweigh Any Beneficial Effects

Responding to a study suggesting that a quarter of British adults have shelved their holiday plans to ease the strain of the credit crunch on their finances, debt management company Gregory Pennington (www.gregorypennington.com) have advised other people struggling with their finances to consider following suit and not risk getting into debt this summer.

The study from CreditExpert.co.uk, the online credit monitoring service from Experian, showed that 43% of those questioned were worried about the impact of a holiday on their finances, yet only 24% have changed their plans.

The study also claimed that 2.8 million British adults will get into debt in order to fund holidays this year – twice as many as this time last year.

A spokesperson for Gregory Pennington commented: “It’s encouraging that many people are considering changing their plans with regards to holidays this year, although it’s still a concern that so many people are still spending beyond their means.

“The relatively easy access to credit in recent years has meant it is now common for people to get into debt to fund expensive holidays, and this debt can become a serious burden if it’s not managed properly.”

The study also claims that 33% of those in the 18-24 age group say that peer pressure often forces them into holidays they cannot really afford. “This is a common problem,” says the Gregory Pennington spokesperson. “We live in a culture where we can take many things for granted, and it seems to many people that includes holidays. But if that involves racking up large debts, it might be best to carry on saving and maybe even wait until next year.”

Of the people attempting to cut back on holiday debts, it was revealed that 19 per cent would be sharing with family or friends in an attempt to cut costs. This figure rises to 37 per cent in the 18-24 age group.

The spokesperson commented: “Sharing is a good way of minimising holiday debts this summer, and some people may be able to avoid getting into debt entirely this way. Certainly, if you are still intending on going on holiday, we advise people to cut costs wherever possible, unless you are completely sure you can afford it.

“The credit crunch is putting pressure on most of us at this time, and there is the risk that unless you are very careful, you could arrive home with potentially unmanageable debts to deal with.”

The spokesperson went on to point out how easy it is to get into debt unintentionally. “Many people book holidays well in advance, up to a year in some cases. Much of this is done on credit, under the belief that they will be able to save up enough money in that time to cover the holiday.

“But the pressures of the credit crunch and rising costs of living mean that many people may be finding it much harder to pay for their holidays than they anticipated. If this happens, it doesn’t take long before the interest begins to add up and the debts could become unmanageable if they are not taken care of quickly.

“We advise anyone in this situation to contact an expert debt adviser, who can discuss your situation and help decide the best plan of action. There are various debt solutions available to suit different situations, including debt management plans, debt consolidation loans and IVAs. Choosing the right debt solution could help you cut down your monthly costs and prevent your debts from continuing to grow.”

Gregory Pennington (http://www.gregorypennington.com/) are a financial solutions company based in Salford Quays, Manchester. The company specialises in a range of financial services, including mortgages, loans, debt help and advice (including debt management plans, IVAs, and debt consolidation).

Via EPR Network
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Checking & Savings, Financial, Financial Management, Financial Services, Financial Solutions, Loans, Money, Personal Finance

Debt Advisers Direct Have Advised The Public To Keep A Close Watch On Their Finances, And To Seek Expert Debt Advice

Responding to recent research suggesting that the number of people who feel they are still managing well in the current economic climate has fallen, Debt Advisers Direct have advised the public to keep a close watch on their finances, and to seek expert debt advice immediately if they are unable to meet their financial commitments.

Mintel, a leading market research company, have revealed that the number of people who see themselves as living comfortably or managing easily has fallen from almost two thirds (64%) in 2006 to just over half (51%) this year, as rising costs of living and the credit crunch put increasing pressure on peoples’ finances.

The research also reveals a leap in those who feel money is tight, despite getting by financially – this figure rising from just one in four (25%) in 2006 to 39% this year.

A spokesperson for Debt Advisers Direct commented: “The fact that increasing numbers of people are feeling the pinch is to be expected, but these figures give an interesting picture of how people are actually coping with it at this time.

“What’s interesting is that 51% of people still feel they are managing easily, which may seem a high figure to some, considering all the stories in the news at the moment,” she continues. “But it’s telling that the figure has fallen so sharply since 2006, which was a relatively good time for the economy.”

The spokesperson went on to explain that the reported fall in confidence could be the first stage of a more significant downturn. “When the economy gets into trouble, the effects can take a while to filter through. Many people are still managing well following the buoyant economy of 2006 to late 2007,” she says. “But as the problems begin to filter through – for example to homeowners struggling to sell their homes, consumers facing higher food prices and bills, etc. – we may well see more people’s circumstances take a turn for the worse.”

The report coincides with Nationwide Building Society’s latest Consumer Confidence Index, which reveals that consumer confidence has taken a further fall, down 18% since July and down 43% since this time last year.

The Debt Advisers Direct spokesperson said: “Consumer confidence can be affected by things like the media portrayal of the economy, but a large part of it does come down to personal situations.

“Even those who have not been terribly affected by the credit crunch will have noticed how quickly the price of food and household costs are rising. And those people are quite right to be concerned about what the future may hold.

“We would advise everyone to keep a close watch on their finances at this time. Budget well, don’t overspend, and try to save where possible. And if you do think you are getting into trouble with debt, seek expert help from a debt adviser.

“A debt adviser will talk you through your situation and help you to decide the best course of action. For example, if you have a number of debts that you are struggling to balance with your household commitments, a debt consolidation loan could help.

“Debt consolidation loans work by grouping all your debts together, so you only repay one creditor instead of many,” she says. “Payments can be rescheduled over a longer period of time than the original debts, meaning payments are lower – which could be a useful way of freeing up extra money for your other living costs. But be aware that rescheduling your debt consolidation loan will probably involve paying more in interest in the long run.

“If you find you simply can’t meet your payments, though, an IVA (Individual Voluntary Arrangement) or debt management plan might be more suitable. If you’re unsure, as with any debt solution, speak to a debt adviser first.”

Via EPR Network
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