Families Forced To Make Drastic Cut-Backs As Debts Eat Up Half Of Income

Families Ditch Luxuries Amid Spiralling Debts

With debts equalling almost half of their yearly income, cash-strapped families are being forced to make drastic cut-backs to their monthly spending as they begin to feel the pinch from the aftermath of the recession, a recent study has revealed.

The average debt figure per family is just under half the annual income of £23,796 at £10, 604, leaving a quarter of families being left unable to pay for holidays and 52% having no budget for children's activities.

The study, by Aviva insurance, found that families, despite a rise of £46 on monthly incomes, are only putting aside £19 a month for non-essentials due to budgets being squeezed with soaring bills, transport costs and food bills.

"Incomes have only risen by £46 since January so to make ends meet, we have found that UK families are cutting out luxuries, economising on spending and reducing the typical amount they save," says Paul Goodwin from Aviva.

The study also discovered that families are relying even more on relatives to help them out financially, with a third admitting to asking family members for money.

So why has the recession aftermath hit families the hardest?

"The government's austerity measures are cutting families deeply. A single person can cut back and live on the essentials or even take a second job to work up some extra income. With families however, it's a different matter altogether," Trisha Doyle, Editor of AOL Money, told The Huffington Post.

"Cutting back, for many parents, can feel like they're depriving their children and if they are forced to work longer hours or take a second job it takes that precious time away from their family, which can often leave parents feeling worse."

4 ways to maximise your family budget

"There's no single easy solution but firstly, don't feel guilty. Keeping a roof over your family's head and food on the table are your biggest priorities," advises Doyle. Here she offers her top tips:

Look at your budget as a family. What are the absolute essentials in terms of your mortgage repayments, childcare and bills? Then consider your budget and work out how much you have to spend on everything else. It may seem like basic budgeting but it will help you to go a long way to understanding exactly what you can afford.

Think laterally. The biggest treat for a lot of kids is actually getting to spend time with their parents. With tickets and treats taken into account, a weekly family cinema trip can easily cost the guts of £80. If you make a weekly movie night in a family event, the kids can get involved, you don't have to fork out for overpriced snacks and you have the added bonus of quality time with your kids.

Look locally for family days out. Look at your local area. There are a plethora of park, centres and museums across the UK that run free children's activities, so do your homework, sign up to their newsletters or Twitter feeds and see what's free in your area. And remember to take your own treats where possible to ensure you're not getting ripped off in the restaurant.

Avoid the Christmas parental guilt trap. Not being able to afford the top toy this Christmas is not the end of the world. Be smart - see how much you can afford and look online for savings and deals.