Deal with debts before thinking about saving

Fri, 15 Jul 2011

Brits with debt problems should address those issues first before even thinking about saving for anything.

This is the advice of the Money Advice Trust (MAT), which claimed that many people working out their finances will realise their incomes do not cover their outgoings.

MAT spokesman Paul Crayston explained that there are a number of options available to those who find themselves heading towards debt and the threat of repossession .

"What you need to do is sit down and budget how much you're bringing in each month and how much you're having to spend each month - if those two sides don't match, you're going to have to consider a more formal solution," he said.

Mr Crayston advised considering using a Debt Relief Order or presenting creditors with a budget sheet and a request that they freeze charges until you are in a position to pay.

Those who have a little left over each month should use that cash to pay off debts, rather than saving, as interest accrued on loans and credit cards is much higher than that gained in savings accounts.
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