- Sunday, 28 February 2010There is a "crying need" for British consumers to be provided with more financial education, it has been suggested.
According to Ed Bowsher, head of consumer finance at lovemoney.com, more people with overdrafts are failing to understand the damage to their balance and credit histories that a 19 per cent interest rate can do.
He was commenting in response to research from moneysupermarket.com indicating that five million Brits are permanently in their overdrafts - a factor that could lead more people requiring
IVA help.
Mr Bowsher said: "The secret to good budgeting is knowing where your money goes. Get out your old bills and payslips. Figure out how much is coming in and going out."
He also suggested that consumers should keep a diary of their spending and note down all the purchases they make each month, "right down to a Mars bar or an apple", in order to ascertain which are unnecessary expenses.
According to the moneysupermarket.com, one in ten people live in their overdraft, with 38 per cent having fallen into the red at some point during the past year.
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