Successful budgeters have a trick up their sleeves unknown to their friends and relatives who are continually in debt claim loan brokers Interfinancial Limited, and that trick is The Daily Allowance Rule.
Through their online loan broking system, www.allaboutloans.co.uk, Interfinancial discovered that there was a key difference in budgeting between those customers seeking secured personal loans and those taking out bad debt consolidation loans.
Abbi Rouse, Credit Verification Officer at Interfinancial says: "We asked our customers a few key questions and found an interesting difference in budgeting skills between those who were seeking secured loans and those who were looking to consolidate bad debts.
"Whilst our home improvement loans clients were particularly savvy about budgeting, those with poor credit history had never thought of working out their daily spending allowance."
21 per cent of Interfinancial secured loan clients who responded to the survey admitted to having worked out at some point just how much of their income was available for them to spend on a daily basis and then budgeting accordingly. These clients were familiar with the idea of taking their regular outgoings (such as rent, mortgage or fuel bills) from their income and dividing the remainder into a Daily Allowance.
The news was not so good for those with a history of CCJs, bad debt loans and missed payments, however. Of these clients, only 3% had ever considered working out their disposable income this way, preferring instead to buy now, think later. This will come as no surprise to debt counselling organisations who regularly help people sort through their financial muddles.
"I think its clear that those with a history of bad debt are unaware of how much of their income they have to spend," says Rouse. "These people are continually falling into debt when their outgoings exceed their income. This only reinforces the message from organisations like CAB that financial ignorance is costing the nation dearly in terms of high credit interest rates and poor credit ratings."
