According to Aviva research, the average British family has over £10,000 of debt before mortgages. Here, we look at the most common reasons why debt mounts up and ways to overcome it.
1.      Spending more than you earn
This is the main reason people get into debt. A few overspends here and there soon add up. Track your spending throughout the month and curb it if you can see your overdraft approaching. Starting a month in the black rather than the red feels so much more comfortable.
2.      Not working to a budget
Using a budget to define how much you spend is a simple solution to avoiding any overspends. Those who do not use a budget invariably fall into debt. It may seem boring, but once you have set it up, keeping to a budget is easy and spotting a bargain can even be fun.
3.      Not saving
We never know what life holds for us so saving for a contingency fund is very important. In this economic environment, redundancies are all too common and pensions are not always guaranteed to suffice, so saving can help to safeguard our financial future. Find a high interest savings account, or a tax-free ISA, to make your money work as hard as it can for you.
How to get back on track?
These three financial mistakes will only lead you into debt, so taking stock of your financial situation now rather than later is critical. The good news is that there are always ways to improve your finances.
1)      Reverse bad habits
The obvious advice is to reverse the habits from the list above.

  • Make sure you spend less than you earn each month.
  • Keep a budget for monthly bills, household objects, food shopping, socialising, holidays etc. This will ensure you spend within your means.
  • Start saving whatever you can, even if it’s every £2 coin you get or the change you receive each time you go shopping. You won’t notice its immediate absence and you’ll be surprised at what you have built up.

2)      Sell unwanted belongings to make more money
The easiest way to earn a bit of additional money is to use what you have. You no doubt have many old belongings that you no longer want or need – but someone somewhere will want them. Why not have a clear out and earn yourself some extra cash at the same time as decluttering your home?
Remember, time is money as they say, so don’t delay. Start your financial planning today.