One financial expert has recently spoken out regarding the difficulties consumers will face in switching from spending activities to depositing their hard-earned cash in savings accounts instead.
Online resource Money Maxim’s Mark Bower states that the switch from spending and building debt from activities such as credit card use will not be an overnight one. Instead significant amounts of time will need to pass before a financial re-balancing occurs through the use of high interest savings accounts such as fixed rate bonds.
Mr Bower stated the slow transition is representative of the economic health of the country following the global financial crisis. He added that consumers need to transition smoothly in the coming months from a spending focus to one of paying down debt through cheaper repayment programmes in order to be able to put away cash for the future.
The more consumers begin to rebuild their solvency, the industry expert stated, the more surplus cash will end up being released to go towards a rainy day fund.
Mr Bower’s recommendations follow upon a new Priorities of Life report published by Scottish Widows. The insurer’s survey revealed that 38 per cent of respondents indicated they felt unable to save an appropriate amount throughout this year. Figures from last year were slightly more elevated in comparison.
Additionally, 35 per cent of those surveyed stated that they were dealing with fears regarding the possibility of being neglectful overall with their financial security this year. Again in comparison with 2010 figures this year’s results dropped slightly.
Mr Bower indicated that a re-balancing of personal outgoings needs to be seen as a long-term consumer project. He concluded by stating that over a protracted time period the change in financial focus can aid in rebuilding household budgets and nest eggs for the future.