Good budgeting ‘the key to successful debt management’

Those seeking to put together a successful debt management plan may be beneficiaries of good household budgeting, which one expert has said is something many neglect to do.

Founder of the Money Magpie website Jasmine Birtles stated the average person does not usually sit down and work out all their incomings and outgoings, but said doing so can make a big difference, by revealing how little a person or household can live on.

She remarked: “Then you will find out what money you’ve got left over and you have to decide, of that, how little you can live on so that you can put the rest into paying off your loans and credit cards.”

By doing this, people will be able to gradually reduce their debts, Ms Birtles stated.

For many people, making a budget is something often left until they are in a bad financial situation.

Those getting help to put in place a debt management scheme can make the most of skilled advice, which will indicate what sort of matters to take into account.

Another benefit of good budgeting that has recently been noted is the way people can set aside a little money for sudden emergencies, which can otherwise plunge people into debt.

Research by Legal & General recently revealed around 30 per cent of households have to find cash unexpectedly for bills each month such as fixing broken-down cars or household aplliances, with the average amount being £178.

Executive director of savings at the firm Mark Gregory warned this can “push families into debt” unless they have some money set aside for emergencies”.

By Joe White