The truth about bankruptcy
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Taking on a second job and cancelling insurance policies are among the steps some people are taking to save money.
It’s obvious that when money is tight, you need to earn more or cut back on spending.
But it is also possible the fear of financial meltdown could push you to make a decision that is wrong for both you and your family.
Debt Advisory Centre, the debt advice and solutions provider, has carried out some research* which shows that nearly two thirds of the UK adult population have made sacrifices - either personal or financial ones - because their family finances are tight.
But while many have compromised on non-essential spending, or made cutbacks that don’t have long lasting effects, others have made sacrifices that could have a huge impact on their lives or those of their families.
Money saving actions
Of those who have given something up to save money, the biggest proportion (41%) have sacrificed having a holiday, while just over a quarter said they had sold possessions to raise cash.
So far so good: holidays away from home are nice but not essential, and presumably the possessions sold to raise cash fall into the same camp.
More drastic steps include those who have taken on extra work to boost their income, while a few have taken in a lodger.
However, more worrying are those who have cancelled insurance policies to free up cash - potentially leaving themselves and their families unprotected if the worst happens.
Some have even decided they must return to work to earn cash rather than staying at home with their children. Others have been forced to move into smaller homes to save money.
There's more information for homeowners in our Debt Help for Homeowners Action Plan.
Money saving alternatives
Before deciding to take one of the more extreme measures to ease the strain on your finances, it might be a good idea to make sure you have explored all the alternatives.
Write down all your spending, from the once a year - such as holidays, TV licence, house and car insurance - to the everyday - coffee, cigarettes, newspaper, train fare, sandwiches for lunch. Is there anything you can cut out or replace with a cheaper alternative without causing too much pain?
Have you also checked that you’ve got the best prices on gas, electricity, landline and broadband? Switching to the cheapest deals on all of these could collectively save you hundreds of pounds, especially if you haven’t changed energy providers before.
If you are struggling with bills, our guide to dealing with energy debt may help.
The chances are that if you have to make big sacrifices to keep your finances on track, you also have problems with debt.
One of the quickest ways to save and get in control of your money is to pay off this debt, especially very expensive unsecured payday loans, unauthorised overdrafts and credit card debt.
But if you have been struggling with debt for a while, it may be time to seek help.
Debt Advisory Centre may be able suggest a solution such as a Debt Management Plan to help you get back in control of your finances. Fill in the form and we will call you to talk about your options.
*Consumer Intelligence research carried out a survey of a representative sample of 2,940 UK adults from 9th to 16th October 2013. Calculations are based on a UK adult population of 50.18m, according to ONS figures.
by Sarah SymonsBack to blog home