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Debt a 'top 5' savings goal

By Matthew Plant

24 May2021

Piggy bank What are you saving up for? A wedding? A new car? To pay off your debts? New research indicates that they're all in the top 10 - but could you guess the order they come in?

Lloyds TSB has just published figures that provide some insight into why people save. Its list of 'savings goals in order of popularity' claims that holidays are the number-one reason people save up, followed by: house, car, debt reduction, rainy day, wedding, Christmas, university, children and birthdays.

So debt reduction comes in at number 4. That's pretty high up on the list, when you think about how many different things we all need to spend our money on.

But in times like these, it's no great surprise. There's a lot of uncertainty, especially now that we're officially back in recession. Employment, mortgage rates, rents, petrol, food prices - they all have a major impact on our personal finances, so it's hard to prepare for the future when we're not sure what changes to expect.

So it pays to be cautious - and paying off debts is a good way of doing that.

Owing less on things like credit cards can make it much easier to cope with any financial 'shocks' you experience, whether that means your income falling, your expenditure rising - or both.

You'll have lower payments that you actually need to make each month. You'll pay less interest in the long term. You could even have the option of borrowing more if you run into a real emergency and need some credit to get by.

Image iStockPhotos / malerapaso

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Tags: debt, Lloyds TSB, savings, recession, employment, bills

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