While we may believe that consumer debt is no longer as serious an issue in the UK as it was during the depths of the great recession, it is still a major cause for concern among British citizens. According to some statistics, the average UK household will owe an estimated £10,000 in debt by the end of 2016, and this represents a new high in terms of cash liability. This debt includes personal loans, credit cards and overdrafts, so it does not include additional liabilities such as student loan and mortgage repayments. This not only represents a significant level of cumulative debt, but the fact consumer spending drives economic growth in the UK marks this is a serious financial concern for the presiding government.
How to overcome short-term financial difficulties
The issues posed by consumer debt are often short-term, however, as this type of liability is cyclical and not inclusive of any collateral. As a result of this, there are a number of innovative measures that individuals can take to overcome these difficulties and remain frugal. For example: –
Reduce Everyday Expenditure
In instances where you have simply spent outside of your means, the best option is to reduce your everyday expenditure. While it may be tempting to budget effectively by eliminating large, big ticket purchases, for example, this will make little difference to your financial circumstances and simply impact on the quality of your life. Instead, it is reducing the amount that you spend on groceries and bills (including your daily dose of cuppa coffee!) that will have the most prominent impact, while also enabling you to enjoy holidays and other luxuries on an occasional basis.
Consider the benefits of short-term Lending
Short-term lending is the subject of numerous misconceptions, but the fact remains that it can deliver genuine financial relief when used and managed responsibly. Guarantor loans are your best bet as a borrower, as these typically offer lower interest rates than payday alternatives and can be repaid over a longer period of time. Reputable firms such as Trusttwo also offer excellent advice concerning the requirements of guarantor loans, so you can make the most of this capital while borrowing an amount that can easily be repaid within a specified period of time. Be sure to compare the market carefully, however, as this ensures you access the best possible rates and repayment terms at any given time.
Consider monetising a marketable skill for additional income
For those who have a lifestyle that constantly requires them to spend outside of their means, it may be more beneficial to source a longer-term stream of viable income. This is easier than ever in the digital age, where a growing number of individuals are being presented with an opportunity to monetize their marketable skills and earn cash through freelancing. This can be balanced alongside an existing, full-time job, while you will have the autonomy to tailor your schedule depending on how much money you need to earn. This is preferable to securing a fixed, second job, while it also develops valuable workplace skills that can help you to develop a chosen career path.