7 Reasons

Tag: Owe

  • Guest Post: 7 Reasons Why You Should Get A Grip On Your Finances

    Guest Post: 7 Reasons Why You Should Get A Grip On Your Finances

    here’s no denying the country is in a pickle. The latest figures show that 1694 workers are getting made redundant every day and the downturn is the longest the UK has seen in more than 100 years.

    Little surprise then than many households are turning to borrowing money to try and make it through to payday and keep a roof over their head. However, spiralling debts can be difficult to escape from in the long term, even once the country’s economy eventually picks up.

    It can be very tempting to rely on credit cards and loans to help make things easier but here are seven reasons why you should sort out your finances and steer clear of debt where possible.

    7 Reasons Why You Should Get A Grip On Your Finances

    1.  You will end up with less and less money. Unless you are lucky enough to secure a 0% interest credit card, the charges added to money borrowed can make the amount repayable much more than the original debt. This means that more and more of your income will be swallowed up by repayments, leaving you increasingly reliant on borrowing, a vicious circle, which is almost impossible to escape.

    2.  Existing on borrowed money encourages you to live beyond your means. In the majority of cases, it is possible to survive on the income you receive, even if you have to make some adjustments to your lifestyle. Relying on payday loans and credit cards stops you making the necessary spending cuts and allows you to spend more than you have.

    3.  It is difficult to keep track of what you are spending. If you simply slap everything on your card, you may well be in for a nasty surprise at the end of the month. By paying for everything with cash, or your debit card, you can keep tabs on your bank balance throughout the month.

    4.  You will be seen as a poor credit risk. If you have lots of credit cards which are at their limit, many lenders will be less likely to offer you more finance – a real problem if you are trying to get a mortgage or a car loan. More recently, one lender has said that any applicant with a history of payday loans will automatically be refused.

    5.  You might sleep better. Having to survive on a reduced income is not much fun but is less worrying that juggling money to pay off your lenders. Anxiety over how to pay debts is one of the leading causes of insomnia.

    6.  Your financial situation will improve. Your financials will improve more quickly when the economic downturn in the country is over. Once the double dip recession ends, there will be more job opportunities and cheaper goods in the shops. If you are still crippled by debt repayments it will take a lot longer to feel the benefits.

    7.  Sorting finances now could help to improve your financial situation in the future. Even if you aren’t waist-deep in debt, it can be easy to blow money by being disorganised. Taking the time to sort through your finances, cancel unnecessary direct debits and draw up a budget may well just be enough to make life more comfortable.

    Baines & Ernst is a leading provider of debt help and advice to people with money troubles. The company has helped over 100,000 people to escape the pressures of debt and provide solutions including Debt Management Plans and IVAs.

  • Guest Post: 7 Reasons To Keep Track Of What You Owe

    Guest Post: 7 Reasons To Keep Track Of What You Owe

    Everyone knows that borrowing money is not a good idea but sometimes it is a necessary evil to get you through a major mishap, such as the boiler going bust or the car breaking down. However, a recent study revealed that many people have no idea how much they owe, preferring instead to bury their heads in the sand, proverbially, not literally. Although it might be more comfortable to kid yourself about how much debt you have, here are seven reasons why it isn’t a good idea….

    7 Reasons To Keep Track Of What You Owe

    1.  Not knowing how much you owe will stop you getting back on track. You can’t budget effectively. Even if you only opt to pay the minimum on your credit card each month (which is never a good idea unless you are absolutely skint) you still need to know how much will be debited from your account. Having no clue about the repayments mean you are not budgeting and are simply crossing your fingers and hoping you have enough cash.

    2.  You will damage your credit rating. You might not have sufficient funds in your account to cover the repayment. This means not only a black mark on your credit file for a late payment but if you are on a special deal, you may have to kiss it bye-bye. Failing to pay on time allows the credit card company to revoke the terms and apply not just charges, but a higher level of interest.

    3.  Being unprepared for an unexpected bill could mean you fall behind in other financial areas. Even if you do have the money in your account, it could have been earmarked for another expense, such as your mortgage or rent. Getting caught unawares of another bill could leave you with not enough money to pay for your essentials.

    4.  Misleading information could spell bad trouble. If you need to declare your financial circumstances, perhaps on a mortgage application or maybe you are opening a new current account; you could be accused of fraud if you provide misleading information about what you owe. Claiming ignorance is not considered an acceptance defence. You could find yourself not only rejected but blacklisted making it almost impossible to get accepted by any mainstream provider.

    5.  You could end up in a spiral of debt that you find hard to get out of. It could drive you into taking extreme measures such as relying on high-interest payday loans, or even worse, going to a loan shark, for money to get you through the month. For most, this is a downward spiral from which it is difficult to escape.

    6.  You could find it hard to get additional credit in the future. If you are relying on credit every month, you may well end up going over your limit. In many cases your lender may not reject the transaction but will slap you with charges and any future creditor will view you with extreme caution. You may also find your credit limit suddenly slashed; most lenders reserve the right to do this if they feel you are not managing your account properly.

    7.  Ignoring debts will only make your situation harder. You might not want to know how much you owe, but if you don’t take a deep breath and face the facts, how will you tell when your debts have become unmanageable? If your financial circumstances are less than comfortable, totting up how much you owe to all your creditors can make you feel anxious. However, there are a lot of ways to get help but unless you take the first step and acknowledge that you can no longer manage your debts, you will be forced to struggle on alone.

    Baines & Ernst specialising in helping people get out of debt with affordable debt solutions including Debt Management Plans and IVAs. All them for expert debt help and advice today.