Breaking budgets can lead to personal debt
16/04/2010Debt caused by over-spending on budgets is becoming a major reason for people’s financial problems, a survey has shown.
The report by loan company GE Home Money discovered that whilst over three quarters (77 per cent) of adults set themselves personal financial budgets, nearly two thirds (60 per cent) of these exceed them.
On average, the over-spend is by more than £150 (£154). One person in twelve confessed to going over budget by more than £300.
The figures do offer some good news, however. Nearly a third (29 per cent) of those surveyed sought to fend off financial problems by sticking to their plan, whilst just over one tenth (11 per cent) actually came in under budget.
Kevin Still, Director of Atlantic Financial Management says their experience is that "the percentage of people actually budgeting is high. This is a key requirement to keeping debt problems under control, but through circumstances outside of your control your disposable income may be squeezed.
"Expenditure shocks like home repair, car maintenance and health problems can have a huge impact on monthly cash flow. Constantly over spending can cause a debt spiral."
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