money management

Money experts concerned about life skills gap

piggy-bank-968302_1920A customer survey carried out by instant online loans website Wonga has led to concerns about the way consumers manage cash and credit. The 2015 customer survey showed that the many members of the public require better awareness of how money works in order to improve their financial well-being. Over 18,000 customers took part in the survey, which found the saving was also a big concern, with a large number of people failing to put away enough cash for the future. The company said that more education about saving and budgeting was needed in order to help people avoid serious debt problems. Wonga said many people were unable to save because of modest incomes, but also cited financial self-discipline as a problem.

Around 43% knew what a credit report was, but over 77% said they didn’t take a good look at interest rates and other charges before applying for credit. However, more than two-thirds of people knew they could obtain an annual free credit report. The company urged consumers to read their credit reports so they could report false information and work out ways to boost their credit ratings. You can read more about the survey by clicking here.

A large number of financial experts say savings needs to be promoted more efficiently so unforeseen financial problems can easily be overcome. Almost one-third of those surveyed said that they put money away each month. Many organisations have conceded that a large number of people simply do not have the means to save due to the small amount of money entering their accounts each month. Wonga said more “collective responsibility” was needed to protect and boost the financial well-being of consumers. They outline responsible credit provision as an important step towards ensuring a more stable credit market. The lender said poor debt management led to a weaker economy for the whole country.

If you have found yourself needing to borrow money, there are many steps you can take to avoid running into problems later on. These include only borrowing money you know you can afford to pay back by the due date, only obtaining cash in emergencies, shopping around for the best deals and reading the small print before you agree to borrow. These details are in the process of being formalised in 2016. You should only borrow from reputable lenders and make sure the people offering you loans are who they say they are. What will happen if you cannot pay by the due date? How severe will the penalties be? It’s essential that you find out this information before you proceed. Short-terms loans are not suitable for long-term borrowing.

Only borrow as much money as you need. The money should only be used for essentials like food or emergency repairs. It should not be used for socialising or unnecessary purchases. Don’t agree to go ahead with borrowing until you’ve seen and gained a full understanding of the loan agreement. Make sure you know exactly how much the loan is going to cost you if you pay on time and if you’re unable to settle it by the due date.

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