As many as five and a half million people in the UK are struggling to budget their finances, with a further three million admitting they don't eve…
As many as five and a half million people in the UK are struggling to budget their finances, with a further three million admitting they don’t even have one, according to new research from thinkmoney.
The research found older generations are more likely to budget, with 46 per cent of the over-55s surveyed saying they are highly organised when it comes to managing their finances. However, younger generations tend to struggle with budgeting, with only 27 per cent of the 18-34 age group saying they were organised.
Interestingly, twice as many men said they did not budget at all – eight per cent of male respondents said this, compared to just four per cent of females.
Of all the respondents, 31 per cent put their money into a separate account, while another 31 per cent ‘mentally’ put their money to one side. Some 23 per cent – equating to 12 million people – do not do anything and choose to stay indoors just to make sure they don’t spend money they need to pay for bills.
Ian Williams of thinkmoney said: “With so many bills to keep track of, a busy lifestyle can mean it’s easy to miss something – and mistakes can cost people dearly, in terms of overdraft charges and fines for rejected payments, not to mention the impact on their credit rating.”
Mr Williams stated that expenditure falls into two basic categories: essential bills and spending money. It appears while some people are using separate accounts to manage their money, others are doing it mentally or not at all, which could lead to financial difficulties in the future.
With people struggling to manage their budgets, more people are now spending more money than they have coming in. This means they are likely to use their overdrafts or fall into credit card debt.
Individuals who are paying out so much each month to several companies they owe money too could be missing out on savings. By taking out a debt consolidation loan people can release more money each month that can be spent in other areas.
By Amy White
Find out more about money management on the ClearDebt blog.