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How much of your money do you keep? See how to change the balance

Do you ever feel like you have no money to save or enjoy?

Research conducted for the Debt Advisory Service (DAC) has found that one in 15 (7%) people who have unsecured borrowing spend over half of their take-home earnings on repayments each month. These repayments include credit cards, personal loans, catalogue debts, store cards, and payday loans.

On average, borrowers spend around 20% of their income on repaying their unsecured debts each month. 

And for one in eight (12%) people, their housing costs (mortgage or rent) account for half or more of their monthly income.

If you do feel like you are trapped into a cycle of repayments, it can be frustrating, but there are things you can do.

Write a budget

This can sound scary but it doesn’t have to be. A budget is simply a list of your income and outgoings, and can help you pinpoint where you are spending money needlessly.

If you do borrow money, such as on a credit card or through a loan, it’s important you know the true cost.

If you can, don’t just pay the minimum payment on any credit cards. These can be a debt trap.

If you only make the minimum monthly repayments, it will take you much longer to pay off the balance and cost you far more in the long run.

Make sure you understand the APR as well. Interest is usually expressed in terms of APR, which stands for ‘annual percentage rate of charge’ and includes arrangement fees and charges. You can use it to compare different credit and loan deals, for example by using a price comparison website.

Also, make sure you check for any fees, such as late payment, default or settlement charges. These can make a huge difference to the cost of credit.

Get help if you are struggling

Separate research for DAC found that 1 in 6 (16%) Brits consider themselves to have a debt problem, the equivalent of 8 million people across the UK.

If you are struggling with debt, there are free, confidential places you can go for help.

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