If you're in debt, you've probably found that it's never far from your thoughts. Indeed, new research from True Potential Investor has found that 33% of UK consumers worry about their finances at least once a day, with women, single parents and carers among the worst affected.
The research found that women are typically more susceptible to money worries than men, with 38.7% of female respondents worrying about their finances every day, compared with 25.8% of men.
Interestingly, those who work full-time and have an additional way of generating income (such as selling online) were found to worry the most, with almost 45% of this group saying they worried about cash every day, compared with 36% of part-time workers, 34% of the self-employed and 31% of full-time employees working a single job.
Being a single parent can also contribute to money concerns, with 41% of single parents with dependents saying they worried about their finances on a daily basis, compared with 28% of couples with no children, 27% of couples with grown-up children living at home and 35% of single adults with no dependents. A further 40% of respondents living with elderly parents requiring care also said they faced daily money concerns.
Overall, consumers worried about money an average of 3.17 times per week, with 54% worrying at least once a week. Just under 30% of respondents were slightly more financially secure, saying they only had money worries on a monthly basis or less frequently. Some were even so confident as to say that they never ran out of money, with the over-55s the most likely to claim that (22.5%), compared with just 5.5% of those aged 18 to 24.
Perhaps unsurprisingly, the vast majority of money worries were related to debt; respondents had taken on an average of £1,110 of debt in the previous three months, up from £1,093 in the corresponding period in 2016, which appears to add to speculation that a new debt crisis is looming.
The Bank of England recently warned about mounting household debt, and cautioned lenders to consider the risks they could be facing by continuing to lend at the current pace. Borrowers themselves are being urged to make sure they're borrowing responsibly rather than recklessly, but if you're already one of the many who worry about debts on a daily basis, it's time to take action.
True Potential managing partner David Harrison is urging anyone worried about debt to approach it proactively, as a head in the sand mentality can do more harm than good.
"Consumers in the UK are served by a financial sector in which it is, largely, far easier and quicker to get into debt than it is to save for the future," said David. "Thankfully this is changing, [but] our latest findings show just how detrimental debt can be to UK households.
"My advice to consumers is to pay off debts as quickly as possible to get rid of the interest charges. Then start to save that money instead, little and often, investing into something that consistently beats inflation."
Unfortunately, finding a savings account that boasts inflation-beating rates is becoming increasingly difficult in the current climate, but you still have a couple of options – namely high interest current accounts and regular savers.
Regular savings accounts could be particularly suited for this purpose. Once you've paid off your debts, you could put the money you were previously making repayments with straight into a regular saver, and you won't even notice the difference to your monthly budget. The fact that you're required to make a monthly payment should encourage you to get into the savings habit, giving you a valuable financial buffer that can help prevent future money worries.
High interest current accounts could be another option, with these accounts offering more flexibility in terms of access, and you can still add to them as you see fit. You'll typically have to pay in a set amount each month in order to get the headline interest rate and won't be able to save more than a few thousand pounds, but for rates of up to 5% with Nationwide, they could be worth considering.
If you're struggling with debt, follow these steps to become debt-free, and hopefully reduce your money worries in the process
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