Consumers being urged to budget to reduce debt

New research claims to show that over 60 per cent of households have recently borrowed money to pay their bills.

People revealed in a survey that they have dipped into their bank's overdraft facility and/or used credit cards, bank loans, borrowed money from family and friends, as well as pawning their belongings due to financial pressure to meet the costs of paying household bills.

Price comparison site Switcher.ie has issued the findings and stated that the study was carried out for it by iReach Insights, involving 1,001 online interviews with Irish adults.

KEY FINDINGS: 

  • Cash-strapped: over six-in-10 consumers (62 per cent) cannot cover the cost of essential household bills with their regular income

  • People are turning to credit cards, overdrafts and/or loans (43 per cent), as well as dipping into savings (35 per cent) to make ends meet

  • Motor insurance is still the most common cause for financial pressure, followed by rent and mortgage payments, motor tax, health insurance, energy and broadband bills

  • One-fifth (17 per cent) of consumers say they are in debt and worried about it

A spokeswoman for Switcher.ie said: "The findings show that in the last year, over six-in-10 of us (62 per cent) were forced to resort to using credit or our hard-earned savings to pay basic household bills.

"Less than four-in-10 (38 per cent) were able to cover the cost of essential household bills, such as rent or mortgage, insurance, energy and broadband, through their regular income alone.

"This suggests that the cost of living is not only a significant challenge for Irish consumers, but could also be a big factor in their levels of household debt.

"Last year, in order to make ends meet, one-in-four (26 per cent) used a credit card, while 16 per cent used an overdraft, 12 per cent borrowed money from family and friends, and eight per cent used a bank loan."

LEARN TO BUDGET

Switcher.ie managaing director Eoin Clarke said: “We can all take steps to control our spending. Firstly, by creating a weekly or monthly budget and sticking to it where possible.

"Secondly, by taking control of our essential household bills. The fact is that many of us stick with the same providers for years and years, automatically renewing our policies and contracts. As a result, we often end up paying far more than we need to for these essentials.

“Some of the biggest financial headaches - such as motor and health insurance, energy bills, and broadband and TV costs - could be easily reduced if you’re willing to set aside an hour or two to shop around for better deals."

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