Debt is a serious problem. It is not just a problem for those unfortunate enough to be struggling with financial difficulties, but for all of us - debt costs society £8.3billion. These costs come in the form of additional health care costs, increased welfare spending, and reduced workplace productivity.
Payday Loans have become a hot topic and a regular feature in the British press week in, week out. The market has grown significantly and although the Office of Fair Trading (OFT) have no official figures on exactly how much the sector is worth it estimated it at around £900 million in 2008 with Consumer Focus estimating the total value of loans made in 2009 at £1.2 billion.
The much reported research by Pew Charitable Trusts, Payday Lending in America: How Borrowers Choose and Repay Payday Loans, notes that some fifty-eight percent of payday loan borrowers have trouble meeting monthly expenses at least half the time, and a worrying seventy-eight percent of borrowers rely on information from lenders, not independent market analysts or comparison sites, when choosing to borrow money.
Pocket money is a great way of introducing children to learn financial literacy from an early age. Giving children the opportunity to earn more money through additional chores will help children begin to understand the financial benefits that come from hard work. Furthermore, it is imperative that we also teach our children about their role as a consumer.