Britons need to respect money, expert urges

Consumers need to learn how to respect their money if they are to take control of their financial situation.

This is according to Justina Rosu, owner of the financial advice website Her Money Matters, who noted individuals have to make sure their house is in order if they are to avoid debt problems.

Speaking to So Feminine, Ms Rosu said she cannot "emphasise strongly enough" just how important it is to take care of finances. A study from the Payments Council carried out last year found only five per cent of people rank financial planning at the top of their to do lists, which demonstrates the scale of the problem. 

Be sensible

Not everyone is going to have a great deal of financial acumen, however, that should not stop them from being sensible in how they arrange their money. For example, regularly checking bank statements is a great way to keep tabs of spending. 

On top of this, disposable income and bills should be separated, as doing this reduces the chances of people spending money on needless purchases that should actually be earmarked for essential household expenditure.

"Set up an account especially for your bills and have all direct debits and standing orders taken from this account. Know your full monthly contribution towards all your bills throughout the year and put this amount in your 'bills' account each month," Ms Rosu remarked. 

Using credit

Recent research by Confused.com discovered 12 per cent of Britons have been turned down for credit in the past three years. For many of these people, it was because they have already amassed significant debts and therefore are seen as high risk.

Ms Rosu advises individuals to only use a credit card if they are confident they will be able to pay it back in full at the end of every month. This way they will not incur high interest rates or surcharges for late payments.

Britons should also decide on a credit limit that is applicable to their lifestyle and keep it at that level, rather than letting banks push it up and up without first consulting them on the move.

Master the art of saving

Of course, if the UK can become a nation of savers, debt problems would be a thing of the past. Ms Rosu stated that everyone should be saving and identified three key areas for investment.

Firstly, people should take the time out to enhance their own skills, as boosting their abilities will make it much easier to make informed decisions about the future of their money. On top of this, individuals with significant resources should consider investing in both stocks and shares and property. 

Finally, no one should be afraid to seek guidance if they are struggling financially. While it can be easy to ignore problems, nothing will get sorted if all people do is stick their head in the sand and hope their issues go away.

By James Francis