Rein in your spending, warns investment group
Earnings are growing at the lowest rate for ten years and but household expenses are going up, according to a new study.The report by the Alliance Trust Research Centre warns that people are refusing to pay attention to financial facts and spending more than ever, out of sync with their salaries.Shona Dobbie, head of the Alliance Trust Research Centre, said: "Far from never having it so good, we've seldom had it so bad, with homes squeezed by lower earnings growth, higher mortgage repayments and chronic council taxes, to name just a handful of issues."While the economy may have bounced back from its depression last winter, many families are still overstretched but not cutting down their spending accordingly.Alliance Trust want families to see that they cannot maintain their current levels of spending - their Financial Reality Index, which measures of whether households should be spending more or less according to the economic climate, indicates that British families are still 18 per cent below the "financial comfort zone"."British families continue to borrow big and spend bigger which confirms this reality just isn't hitting home. "It's only really thanks to recent economic growth and lower utility prices that we've seen even a mild improvement in the predicament facing households," said Ms Dobbie.
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