Pre-crisis debt playing key role in current finances

British people's current finances are still being heavily impacted by their spending decisions before the global downturn of 2007/08, according to the Resolution Foundation.

Matthew Whittaker, senior economist at the organisation, told bbc.co.uk that many people could be heading for so-called debt peril, which is when a household spends more than half of its income on debt repayments.

“Even if we take a somewhat rosy view of how the economy will develop over the next few years the number of households severely exposed to debt looks as though it will double. But the levels of debt built up by families in the pre-crisis years are such that even relatively modest changes in incomes and borrowing cost assumptions produce significantly worse outcomes.”

In 2007, the number of people in debt peril was 870,000, but the Resolution Foundation predicts that 1.1 million will be in this situation even if interest rates do not rise above three per cent by 2018. The base rate has been at the historic low of 0.5 per cent since 2009 and is expected to rise once the economy has recovered sufficiently, causing huge changes, particularly to mortgage repayments.

In a press release published on resolutionfoundation.org, the chief executive of the think tank, Gavin Kelly, suggested the government is not making this issue enough of a priority, as it is set to become a major problem in the coming years.

Boxing Day bargain hunters queue from 3am

Shoppers began to queue as early as 3am in Scotland for the Boxing Day sales, as the traditional post-Christmas shopping frenzy showed no sign of disappearing in spite of times of austerity.

According to telegraph.co.uk, this year could well see record levels of spending, which may come as a surprise to some, given how austerity cuts are being rolled out by the government and salary levels are still not growing with any great gusto.

Predictions by the Centre for Retail Research (CRR) suggest that

Budgeting tips: at the start of the month

Budgeting is not sexy, that is a fact. But there is no question that it is a vital part of organising your finances.

Everyone gets into financial difficulties from time to time – whether it is dipping into an unauthorised overdraft, taking out a payday advance or even needing a full-on loan paid back over a number of months or years.

While this type of thing will happen to the vast majority of people during their life, some nifty budgeting could prevent it becoming a regular issue. So what can you do at the start of the month to budget for the time leading up to your next pay check?

Write it all down

All budgeting really involves is setting out what you need to pay for and what you would like to pay for alongside your income. By doing this at the start of the month, you can note down big expenditures further down the line and reel your spending in at other times to accommodate these costs.

For example, knowing that your quarterly water bill will arrive around the middle of the month and rent at the end could impact your spending capability. If you can, move this cash to another account straight away or make a note of how much you need to have in your accounts on these days.

Once you have everything down – utility bills, travel costs, food, sports clubs, rent and of course a little spending money – then you can have a good idea where you are financially.

Allow a buffer

One problem that many people have is they will underestimate costs. There is a saying that suggests people do half the work they intend to do and double the play. Replace 'work' and 'play' with 'saving' and 'spending' – a pretty accurate picture of lots of bank account histories!

They key is to overestimate costs when budgeting and/or allow a buffer of cash aside from your normal spending that can be used if a bill comes out of nowhere or if you end up spending more than you wanted to on a weekend.

The problem with these buffers/overestimated costs is that when combined with your normal spending, your projected outgoings will exceed your income. While this is not the greatest feeling, it is not time to panic or get depressed. It is however time to cull a few expenses.

The cull

Maybe you could stay in one weekend and concentrate on doing 'free' things – there are more of these activities than you think – or walk/cycle to work for a week. Just be sure to meet your essential outgoings like bills first.

The goal is for your overestimations to leave you in the black at the end of the month, so when you hit payday you can either treat yourself or just give yourself a more comfortable time the following month – and in that way, your budgeting from the beginning of 'month one' can set you up for the months and years ahead.

Payday Pig marketing messages – playing fair

Nobody likes to get pestered when they’ve already said they are not interested – whether that is a salesperson in the street or an email marketing campaign that seemingly will not stop.

At Payday Pig we are completely committed to playing by the rules set out by the Information Commissioner’s Office (ICO), which is an independent authority seeking to protect people’s privacy and uphold ‘information rights’. So if you are getting emails from us and you don’t want them, please unsubscribe from our lists by following this link.

It takes ten days for the request to be processed, so if you get a message after you have asked to unsubscribe then it may be that we are still processing your request!

Email marketing

Email marketing is a minefield in some ways because we – as a company – are trying to reach as many people as possible who may benefit from our service, a payday loan. When we reach these people and they get the cash they need to make it to payday, then all those emails sent out by our affiliates to so many accounts become worthwhile, in a way.

On the other hand, for those people who are not in a position to need a payday loan this email marketing becomes annoying spam – well, unless they suddenly need some cash to tie them over! – and we aware that there has been criticism from some people who have received a lot of messages and were unable to unsubscribe.

All we can say is that we are doing all we can with our affiliates to make sure that every request submitted on the unsubscribe list is processed. Just like any company, all we want is to have satisfied customers.

Happy customers

Every month we have thousands of customers who are satisfied with the service we provide, which is there to help those who get into short-term financial problems and just need a relatively small sum of money to keep them afloat.

In a difficult economic climate, this type of situation can happen to anyone. So even though there have been issues relating to people getting emails that they did not want – it is satisfying for us to know that there are plenty of people out there who did get the email they wanted. Namely a confirmation that they would be getting the payday loan they wanted.

If you are getting emails you do not want, please visit the unsubscribe page so that we can stop you getting these messages.