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and can be a significant contributing factor
to mental illness, so finding support is
essential. Falling into debt can happen to
anyone, as Kim’s* story illustrates. Even on
a low wage Kim had managed to live within
her means, but the breakdown of her
relationship five years ago had a catastrophic
effect on her finances.
“When I moved out, my monthly outgoings
soared,” she says. “I had to pay a deposit,
rent, cover all bills myself and buy things for
the flat. That was really the start of my
problems. Then, that same year, I needed a
new car, my two best friends’ daughters got
married – so there were hen nights, presents
and hotels – and, to cap it all, if you’ll forgive
the pun, I needed root canal treatment. All
my meagre savings went on the deposit and
everything else was paid for with money I
didn’t have – credit, in other words. I just fell
into a hole of debt that just got deeper and
blacker. I really couldn’t see a way out.”
Kim eventually resolved her situation by
finding a better paid job, moving into a flatshare and confiding in a relative who was
able to give her an interest-free loan to clear
her bills. “Approaching my uncle was the
best thing I could have done. In an instant,
he set me free, and helped me find solutions.
I’m in my late forties and I hate the fact that
I’m in shared accommodation. It’s a massive
compromise, but there was no other option.
I’ve had to cut my cloth according to my
means and the flat share allows me to stay
on top of my spending.”
Kim’s experience highlights the value of
having an emergency fund – a pot of money
to draw on if necessary. MAS recommends
that we each stash away enough to keep us
going for three months, and while that
sounds great in principle, it remains an
impossible dream for the millions who are
described as “chronically broke, year in,
year out” in Thriving, Striving or Just about
Surviving, a report looking at economic
security and modern work in the UK,
published by the Royal Society for the
encouragement of Arts (RSA) last year.
The survey, which looked at 2,000 British
workers, showed that 41% of respondents
had less than £1,000, and 32% less than £500.
Other studies suggest that the reality might
be a great deal worse: a 2018 study by the
Skipton Building Society, for example, found
that over 60% of 25- to 34-year-olds had no
savings at all.
But why is this? Why do so many of us,
irrespective of income, struggle to save? The
answer, says psychologist Richard Wiseman,
professor of the Public Understanding of“We’re naturally
disposed to go for
the instant hit”