Consumers facing budget management challenges in 2012 may be dealing more with loans than credit cards in comparison with the recent past.
This is because new seasonally adjusted figures from the Bank of England have indicated the balance of unsecured credit shifted in November 2011, with no increase in credit card borrowing.
Although this was not too dissimilar to recent months - with a rise of only £0.1 billion in September and October and a fall of the same amount in August - the figure for other loans and advances rose by £0.4 billion, compared with no change in October.
The shift - coming as it did in the month before Christmas – may suggest that consumers were opting for new loans and overdraft use to fund extra festive spending, rather than putting it on plastic.
Of course, without a seasonal adjustment the figures may be much higher as many will have been tempted to use credit to fund more present buying.
However, the reality may be the same for many consumers, who will face increased debts and greater strains on their budgets.
For those who have an overdraft, staying out of it for as long as possible each month after the salary has gone in could help keep interest down, so a budget planner may be useful in helping consumers to plan the bulk of their spending for later in the month. At the same time, good budgeting will be needed to ensure the overdraft stays within its limits, as an unauthorised one may incur large charges.
And for those with a loan, monthly payments may be a simple affair, but once again managing money well may be essential to ensure the funds are there to pay it. At the same time, loan repayments will take a chunk of income away, a situation that can increase the strain on resources.
There are, of course, many ways a budget planner can identify potential savings. One may be leisure pursuits. If some consumers are unwilling to give up going to the cinema, football or nights out with friends, there are alternatives.
A poll by Moneysupermarket.com noted that going to the gym is one of these, with 68 per cent saying they would either not renew their membership or not take up one, choosing to find other ways to be fit and healthy instead.
