Money: We'll Pay Tomorrow If We Spend like There Isn't One ; as Credit Cards Fuel a Consumer Boom, Melanie Bien Looks at How to Live within Your Means by Juggling Debts
Bien, Melanie, The Independent (London, England)
Although we are supposed to be worrying about an impending recession, it hasn't stopped us shopping. High-street spending rose in September, according to figures from the Office of National Statistics, with sales of clothing and footwear up 0.8 per cent, and department stores enjoying a 0.7 per cent rise. Only food sales were down - and even then just by 0.4 per cent.
And Morgan Stanley Consumer Banking Group says there is no sign of a slowdown. Britons expect to spend an average of pounds 689.37 on their credit cards in the next three months - with people in their forties splashing out around pounds 1,000. "Long gone are the days when credit cards were only used for major purchases," says Tyrrell Schmidt, UK head of Morgan Stanley's Consumer Banking Group. "Our latest research underlines how central the credit card has become to the way most UK consumers manage their daily finances." As plastic is increasingly used to pay for everyday items rather than special events such as holidays, many of us are spending more than we can really afford. Instead of saving until we can afford something, we think nothing of running up debt.
Even if it is tempting to splash out on the plastic, particularly in the run- up to Christmas, an uncertain job market and the threat of recession mean it might be sensible to restrict spending to within your means.
"Start by facing up to reality," says Donna Bradshaw, director at indepen- dent financial adviser Fiona Price & Partners. "Don't just pay the minimum off on your card each month and carry on spending. Once you know your real position, if it is really serious and you are finding it difficult to manage, go to your creditors and explain your situation. If you tell them upfront they will be more amenable."
If you get into financial difficulties, the first step is to see whether you can work out a repayment solution on your own. Most people should be able to do this unless they have very severe debt problems. Calculate your net income and outgoings and see how much is left to pay off what you owe. You need to deal with priority debts first - those which, if left unpaid, would have serious repercussions.
The next step is to get in touch with your creditors and ask if they would accept smaller payments …
Questia, a part of Gale, Cengage Learning. www.questia.com
Publication information: Article title: Money: We'll Pay Tomorrow If We Spend like There Isn't One ; as Credit Cards Fuel a Consumer Boom, Melanie Bien Looks at How to Live within Your Means by Juggling Debts. Contributors: Bien, Melanie - Author. Newspaper title: The Independent (London, England). Publication date: November 4, 2001. Page number: 10. © 2009 The Independent - London. Provided by ProQuest LLC. All Rights Reserved.