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Banking On Lottery Or Gambling Winnings To Cover Debt Is Risky

by Jim ONeil on March 7, 2012

in Debt

The Co-operative Bank recently released some very disturbing research findings regarding UK consumer debt. Approximately 70 percent of UK adults said they had debt problems, many finding themselves in this situation for at least five years.

Even more alarming is the fact that a lot of them do not recognize the issue until it has become unmanageable.

Study findings indicated that UK consumers accumulate an average debt of £1,247 before they acknowledge there is a problem. According to the Co-operative, these consumers are afflicted with “DRIP syndrome.” They deny that they have accumulated debt, rationalize the reasons for the situation, ignore the issue, and postpone getting financial affairs in order.

Almost ten percent of those surveyed said they have turned to the lottery or gambling in an attempt to eliminate their debt. Others are using payday loans because this short-term financing helps them stay afloat by providing cash quickly.

Unfortunately, some borrowers are unable to repay the loans and roll them over, amassing more debt.

“Debtpression,” characterized by tense feelings, sleepless nights, mood swings, and low self-esteem, afflicts many UK consumers in debt. Experts say that ignoring debt will most likely make the situation worse. By confronting issues now, consumers can begin improving their financial situation and reduce the physical effects of money problems.

Debt issues do not usually go away on their own and gambling or lottery participation can worsen, not help, the situation.

Robin Taylor, The Co-operative’s head of banking, commented that creating a budget and diligently managing the bank account will help consumers get a handle on their finances. The Co-operative website is just one place where consumers can find a budget calculator and financial management advice.

While payday loans may resolve small, one-time debt issues, a more structured approach may be needed for persistent financial problems.

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