Debt management plans ‘need focus’

Those who want to make a debt management plan work need to be focused on working out exactly what the nature of their financial situation is, an expert has advised.

Managing director of Yvonne Goodwin Wealth Management Yvonne Goodwin said: "Make a list – what you've got coming in and what your outgoings are, including the costs of servicing your debts. This is essential to find out whether your debts are a problem."

The problem arises when incomings are less than outgoings, she explained.

Ms Goodwin added that it is vital to face up to all aspects of a debt situation, however unpalatable that may seem, stating: "Don't bury your head in the sand, don't leave the envelopes unopened – it won't go away, it will only get worse."

Such an approach will help tackle the problem and ultimately free people up to get on with their lives, she concluded, suggesting that in time this will mean people who have become debt free can put their money into savings instead.

This last consideration, however, is something people should look to only after they have resolved their debt problem, Justin Modray of candidmoney.com recently emphasised.

And he noted that many people currently need every spare penny to ensure they avoid "drowning in debt", due to the financial strain that is being placed on many family budgets.

People in this situation are facing contrasting fortunes to those who already have savings, Mr Modray pointed out, as the latter group can fall back on these as a means of covering their outgoings.

By James Francis