A personal spending review could ease debt worries

People in the UK could ease their debt worries by carrying out their own personal comprehensive spending review, it has been claimed.

Credit Action has advised consumers to take the measures in an effort to prepare themselves for how the governments spending cuts may affect them.

The charity claimed individuals could prevent any financial shocks by realising how a change in circumstances – such as the loss of a job or a reduction in benefits – would alter their money situation.

It recommended adults write down all their income and spending practices to give them an overview of their position.

People may discover they have to make tough choices when deciding what they can or cannot afford, or indeed the products they do or do not require, the organisation observed.

It suggested individuals should take action to tackle any mounting debts or unpaid bills – as these problems are not likely to go away by themselves.

People should also look carefully at where their money is going, the body advised, as the interest rate paid when taking out a loan could mean the product is not worthwhile in the long run.

It added Brits must prepare themselves for possible changes – be they big or small – by putting aside some emergency cash.

Joanna Parsley, associate director at Credit Action, suggested people should examine “not only their income and spending, but their debt levels and how they use credit”.

The BBC recently published a case-study of a personal spending review to show how people can benefit from carrying out this financial health-check.

The latest Marks & Spencer Under-18s Work and Money Survey revealed youngsters in Britain are becoming more financially savvy – possibly in an attempt to stave off future debt.

By James Francis