FAMILIES should talk about the debts they have incurred over Christmas in order to avoid getting into a spiral of loans which they can never pay off, according to a financial expert.
A new report by insolvency trade body R3 found that five million British adults were considering taking out pay day loans in the next six months, while a Which? study found that nearly half of people who had already done so were unable to repay them.
Money management trainer Vivi Friedgut said: “The festive period is often a time when families spend beyond their means and as a result look into January to settle their debts.
“This year, many households are already dealing with debt even before Christmas, with many taking out payday loans just to afford the basics such as food or getting into debt by over-using credit cards to purchase gifts.”
The former private banker has written a book called Money Smarter, aimed at helping families to become more confident with money, and said making a new year’s resolution to be more careful with money could help people to avoid problems throughout the year.
“Money management should be taught from a very young age because it’s the only way to adequately prepare young people for a world where they are swamped with financial products and ways to spend their money,” she said.
“Personal finance should be taught in school as part of the syllabus and open, honest discussion surrounding cash should be encouraged at home. Money Smarter was created to stimulate and contribute to that discussion.”