I guess that if you asked the man on the Clapham Omnibus (remember him?) about the causes of debt he would answer that it is due to recklessness and greed. Yet that is often so far from the truth.
How to budget and manage money is not a skill we are taught in school – though there is now pressure to change that – but more often than not, the reason for debt is an unexpected change in circumstances. Families on low income are unable to save for the proverbial ‘rainy day’ and when some unexpected event occurs they are soon in difficulty. A common initial reaction is to ignore the constant demands dropping through the letter box – they will go away, won’t they?
Fortunately debt relief charities such as Step Change and our own Money Advice Service are able to step in and take some of the pressure away, dealing with the many creditors, diferentiating between priority and non-priority debts. In addition, teaching the client how to budget to clear their bills and to support them with food when things are desperate.
Take a recent Foodbank client of ours – I will call her Mary. In her words
“I needed help as my husband was made redundant and can now only get part-time work. We had a lot of debts that we couldn’t pay as we didn’t have the full time wage coming in. I was trying to pay the bills and that left us short of food. I contacted the Foodbank and Step Change and a plan was worked out which would enable me to pay the bills and get help with food.
Some of my bills are now paid off and I can keep working towards paying off the bigger debts over time. I’ve now got all my bills in order, from small to large and I’ve been keeping up with the agreed payment plan.
It’s not going to end soon but I can see light at the end of the tunnel and so, thanks to the Foodbank and Step Change, we are so much happier as a family. We could not have done it without their help”