One of the most difficult things to achieve in this modern fast paced life is to balance our finances. Many young folk will look at their peers and assume they must keep up with them, the FOMO situation, short for fear of missing out . . . is prevalent amongst this group. The need to keep up to date with the latest mobile phone or belong to a particular social group with more expensive habits can start folk on to a path to ruination. The overwhelming desire to fit in and keep up with trends comes directly from tv and social media advertising and influencers – the consequences of this is very often the start of debt that gets out of control. What starts off as buying too often on credit cards with their own undesirable interest rates if the debt is not cleared at the end of the statement period. It is so easy to think that money will be coming in and the minimum payment looks so much more attractive than paying off the principal sum. After a few months, because the spending always continues, there is no breathing space for clearing the original debt, often they take out short term loans to cover the credit card debts – tempted by the ease of borrowing, the participant rarely looks at the small print, or if they do, they gloss over the massively inflated interest rates and punative actions should the debt not be managed. This is where visits to government backed advice agencies get involved and guidance and applications to the finance companies become very serious business.
The failure to reset one’s finances properly early on creates problems with borrowing later on just when mortgages are needed. Starting adult life with good financial practice pays off every time.