Young people and debt

If you are struggling to make ends meet and you are spending more money than you earn, you need to do something about it. Getting into debt could affect you for years to come.

If you are under 18, you are unable to apply for credit cards, overdrafts, personal loans and hire purchase schemes, that said you could fall into debt in other ways, such as borrowing from friends or your family.

No matter how old you are or what your level of debt is, it is important to understand how debt can mount up. It is also important to know how to deal with debt problems if you ever face them in the future.

Recognising debt

Most people who are in debt often make the mistake of ignoring the size of the problem, hoping that it will just go away. Unfortunately, debt has a habit of hanging around and getting worse, so it is important to recognise the warning signs at an early stage, for example:

  • You are always short on cash
  • You constantly close to your overdraft limit

Do something about it!

The earlier you start to tackle your debt, the easier it will be. If your financial situation is in danger of becoming serious, do something about it now. For free and impartial advice contact an independent advice agencies such as CAB .

The worst thing you could do if you are having money problems is just ignore it. It is often the case that people assume they will be able to pay off their debt when they start earning more money, but anything could happen. Some debt will incur interest charges and late payment fees which can increase the size of your orginal debt which could double the amount orginally owed.

What can you do ?

If you are in debt, it might be that you have lost a grasp of your finances. For example, do you know exactly how much money goes in and out of your bank account and how often?

Start by looking at your recent bank statements and find out where you are spending your money on things you could easily do without. By getting rid of these, your cash flow situation will get better quite quickly.

If your situation is looking more serious and you owe money to a number of people or companies, you need to have a budget and organise your various debts. Once you know how many debts you have and the total of each one, you can start to prioritise the most important ones and start to pay them off.