Topic 1 personal financial stability

1.1 The importance of sustainable personal finances

This is important for both individuals as well as the global financial economy. Sustainability in this context means achieving and maintaining a balance between personal income and expenditure. For the short, medium and long term. This will allow individuals to satisfy their needs and acheive their wants and aspirations. 

Much of the blame of the financial crisis that led to the world wide economic recession is attributed to bankers who are accused of encouraging people to take on mortgage loans and other debts that they could not afford to repay. Many financial experts say that the people who themselves took out these loans should share some of the blame. They should have been limiting their borrowing to an amount they were sure they could pay back. 

Since the financial crisis there has been high level of personal debt. It has stayed at around £1,400bn. Such a high level of personal debt in the uk might be sustainable as long as the economy is growing and unemployment is relativly low.  After the financial crisis unemployment went up and peaked at about 2.8 million. 

The result of getting into deeper and deeper…