The number of young people struggling with unsecured debt has tripled since the global financial crisis, recent figures have revealed.
According to figures from Citizens Advice, individuals aged 17-24 possess an average unsecured debt of £12,215 – a crippling amount for those just starting out on the career ladder. Levels of debt were shown to far outstrip levels of income, accounting for 70% of a young person’s total earnings leaving those struggling with financial problems in a precarious position.
Although there was a significant decline in debt attributed to credit cards, more young people are now increasingly dependant on formal loans from banks or looking to family members for support. Student loans appeared to create the biggest issue, accounting for 45% of the rise in debts, a number that is expected to increase in line with higher tuition fees now payable for University courses.
Unfortunately we are now facing a time where debt and financial issues are becoming an accepted norm for young people. With property prices and rents at an all time high, young people struggling with debt are placed on the back foot before they can even think about saving for the future. Fortunately as they progress professionally many will be able to repay the money owed through early borrowing, but what about those who can not?
Failure to manage your finances can have serious consequences that may follow you throughout your life. Addressing debt at the earliest possible opportunity is crucial for those who wish to move forward with their lives and attain the lifestyle and home they aspire to. In most cases this can be achieved in three simple steps:
1. Create a budget
Create a detailed budget documenting all income and your monthly expenditure. This will give you a realistic indication of where the problem lies if you are struggling with your finances. It will also allow you prioritise your outgoings, and identify areas where you can save.
2. Always pay more than the minimum payment
Making the minimum repayments may ease some of the financial burden in the short term but means you will pay more interest. Where possible, try to overpay as this is a much more efficient way of clearing any debt.
3. Ask for help
Often people make the mistake of thinking they are alone, unsure of where to turn or who to ask for help. There are a number of support services out there who offer free debt advice for those experiencing financial trouble. Never assume that you are beyond help or that it is hopeless, there is always a solution ease your financial problem.
Here at Farleys Solicitors our specialist Personal Insolvency department have a wealth of experience advising those struggling with debts and finances. Our bankruptcy solicitors are based in Manchester and can provide tailored solutions based on your personal circumstances. If you’re struggling with debt please don’t hesitate to contact a member of our dedicated team on 0845 050 1958. Alternatively please complete the online enquiry form.