Debt advice: Save for unforeseen events

Consumers seeking to avoid running out of money should keep a fund set aside for emergencies, it has been claimed.

Speaking to the Australian, Lisa Montgomery, head of consumer advocacy at Resi Mortgage Corporation, offered free debt advice to people concerned about their finances.

She suggested that the simplest way to avoid unwanted debt is to prepare for unexpected occurrences and expenses.

Ms Montgomery said that by reducing discretionary spending for six to 12 months and saving the extra finance, consumers can quickly build a pot for a rainy day.

"A sudden event such as job loss may see us delay bringing our expenses in line with a reduction in income and, out of convenience or necessity, we let debt fill the gap," she commented.

"The sooner you adjust to your new reality the better off you'll be."

Earlier this week, Beccy Boden Wilks, spokesperson for the Money Advice Trust, urged consumers to prioritise their bill repayments in order to avoid major debt troubles.

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2009-10-14 13:54:17 © Moneyextra.com