Debt growth ‘fuelled by social spending’

New research has highlighted the extent to which many individuals are building up significant levels of debt as a result of social spending.

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New research has highlighted the extent to which many individuals are building up significant levels of debt as a result of social spending.

Figures compiled the Money Advice Service have shown almost half (48 per cent) are in this position, with the typical 'social debt' among this group standing at £1,260.

The worry of not wanting to appear "tight" or "stingy" was shown to be a factor in this behaviour for 58 per cent of respondents, while 36 per cent cited a lack of self-control as the main reason for their actions.

In total, social pressures to appear generous and affluent added £341 a year on average to the amount individuals spend during social occasions.

As a result, 20 per cent of respondents to the study stated they have had to cut back on food bills because of overspending on socialising, while nine per cent have not been able to pay essential bills due to their profligacy.

Overall, two-thirds (67 per cent) of those taking part in the research say they will buy rounds of drinks fully expecting to spend more than they will receive back from their friends during a night out, while 35 per cent of people stated their belief that those who do not buy rounds are being "stingy".

Being unable to say no to social engagements in general is another reason for overspending among many people, with 25 per cent stating they go out for meals they know they cannot afford and 17 per cent have been on a holiday or break in the last 12 months that they did not have the money for.

Jane Symonds, financial expert at the Money Advice Service, commented: "Most of us spend a little more than planned every now and again, whether it is buying a few more drinks than we expected to on a night out, or getting a taxi home at the end of the evening.

"I'd urge anyone in debt, due to their social spending, to take action now to avoid getting any further into the red and instead work at clearing it. You'd be surprised at how empowering saying 'no' can feel when you see how healthy your bank balance looks, and you can spend the money on things you really value or need."

Indeed, individuals keen to rein in their outgoings have been offered several tips to reduce the amount they spend on socialising if this area of expenditure is putting them into the red each month.

The first is to be up-front and honest with both with their friends and themselves and tell them that while going on that holiday abroad or out for the meal to celebrate someone's latest promotion would be nice, it is simply something they cannot afford right now.

Withdrawing cash can also be a good way to reduce the amount spent on a night out, as leaving one's cards at home and setting a pre-night out budget by taking out a set amount in advance will ultimately limit the amount people are able to spend.

Posted by James Francis

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