Adele Atkinson, Professor of Practice in Financial Literacy and Wellbeing, explains the cycle of debt during Debt Awarness Week.
Professor Adele Atkinson said:
“Debt hits people hard, creating feelings of shame and guilt as well as financial worries. When people are unable to pay what is due, the pressure mounts, and they face impossible choices.
“Imagine all we need in life is a daily plate of food, and let’s assume that these plates are delivered to us weekly. What happens if, one day, we drop a plate of food?
“If it’s early in the week, we could eat the next day’s dinner and keep doing that until the end of the week. But on the last day, there will be no more dinners, and we will have to wait until the next delivery. Our hunger will have been pushed into the future, but it will catch up with us eventually.
“We could ask a neighbour to lend us one of their dinners, promising to give them one back when we get our next delivery. But then, we will be short of dinners again as soon as our delivery arrives. And if that neighbour asks for a little extra food in repayment, our problem grows.
“What if, instead of asking a neighbour for help, we re-apportion the remaining food over the next few days? This would mean struggling a little for several days but at least we have something to eat each day. After a few days, we will be back to full-size meals. Sometimes, tightening our belts is a viable option. However, if the meals are already so meagre that there is nothing to spare, this strategy is not going to work.
“Now, imagine that once every six weeks, the food delivery includes a bonus meal. Then we could plan ahead and make sure that we use that bonus meal to replace the one we lost. Of course, if we had been better prepared, we might have put the last bonus meal in our freezer! But even without that forward planning, we can see the light at the end of the tunnel and get back on track without suffering from hunger.
“But what if we were carrying a whole family’s meals and dropped them all, or we weren’t in one day to receive the delivery and had to manage a week without food? What if the extra food that the neighbour asks for in compensation leaves us unable to eat for a week or more?
“The problem with debt is that however it starts, it can remain a problem for a long time, particularly for people operating a tight budget. Most apparent ‘fixes’ (such as borrowing from someone else to repay another debt) are only temporary, pushing the problem into the future. If cutting back on expenditure isn’t an option, then it is unlikely that someone will become debt-free without additional income or external support. By increasing awareness of the signs of financial difficulty across society, improving flexible approaches to repayments and debt recovery, and fostering empathy for the overindebted amongst creditors, we can help individuals navigate financial difficulties with dignity and respect.”
Professor of Practice in Financial Literacy and Wellbeing (CHASM)
Professor Adele Atkinson is a Professor of Practice in Financial Literacy and Wellbeing in the School of Social Policy, University of Birmingham.
