Financial planning is essential for Brits

People struggling with their finances in the current climate or thinking about getting a payday loan to make ends meet would benefit from help with financial planning.

According to the debt charity Consumer Credit Counselling Service CCCS, financial planning will be crucial in the coming year if Brits hope to make savings and avoid falling into debt.

The organisation said that a recent poll found that 26 per cent of households in the UK are not setting themselves a clear monthly budget, thereby making themselves more vulnerable to high inflation, low wage growth and rising unemployment.

"It's never too late to put your finances in order. Setting a clear budget now is the best way to help withstand the financial headwinds in 2012 and beyond - and will leave you in a far better position to cope with any difficulties you may face in the future," said Delroy Corinaldi, director of external affairs at CCCS.

The comments echo those by Stuart Carmichael, director of the Debt Support Trust, who said that many people are currently struggling to live within their means, so are turning to payday loans to make up the shortfall.

He said that they are a very expensive way of borrowing so people should look at other options first, but often they seem to be the only resort for some people.

"For people who are going to take it out and need it - what we would say they should do is repay it on time and make sure they understand the cost of not repaying it on time, the actual cost of taking out the loan and the repayment," Mr Carmichael explained.

He added that just because decisions can be made in less than an hour does not mean that households should not think long and hard before applying for credit in this way.

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2011-11-23 14:43:26 © Moneyextra.com