One in four consumers is in urgent need of a financial plan if they are to avoid falling into debt in 2012, the Consumer Credit Counselling Service (CCCS) has warned.
The debt charity issued its warning following a survey by the Institute of Financial Planning earlier this year which revealed that one in four Britons (26%) are not setting themselves a clear budget to stick to each month.
The CCCS says that those who do not set themselves a clear budget are more likely to fall into unmanageable debt as high inflation, low wage growth and rising unemployment threaten to make 2012 a difficult year.
James Falla, senior debt expert at Beat My Debt agrees.
“With unemployment now at 8.3 percent the highest it has been since 1996, people need to take more care than ever of their financial circumstances. If things do go wrong then the majority of people will not be able to count on earning more money to resolve the problem. The age of have now and pay later must be put behind us” Falla said.
Why is saving important?
Falla added that the people most likely to be able to overcome the financial problems caused by increasing living costs and falling incomes were those who managed their money to stick within an expenditure budget they could afford.
On top of that he urged people to save money for a rainy day where ever possible. “If the unexpected happens and your income falls you will be in a much better position to ride the storm and keep from falling into even greater debt if you have savings to help” he advised.
“No-one ever said that saving is easy. But if you understand your income and expenditure budget and put in place a plan to save building up a small nest egg to fall back on can become a reality” Falla added.
The CCCS says in its recent Debt and Household Incomes report 6.2 million households were identified as ‘financially vulnerable’, and that financial planning could play a key part in helping struggling Britons survive the difficult times ahead.
