What is financial quicksand and how can we help ourselves get out of it?

Have you ever found yourself slipping into bad spending habits online, that you just can’t get out of? You could be experiencing financial quicksand

Money. It’s one of those taboo subjects that many of us feel uncomfortable talking about. According to one 2020 survey from the Money and Pensions Service, 29 million UK adults don’t feel comfortable talking about money, despite 48% worrying about their finances recently.

With concerns around growing inflation, and the impact of rising costs on households, there’s never been a more important time to better understand our finances – and to feel able to ask for help.

What is financial quicksand?

Popularised by Citizens Advice, the term financial quicksand is used to refer to the slippery slope of online spending. Companies influence us to make spending decisions in both deliberate and subtle ways. By introducing risky or longer-term spending commitments to us when we’re already checking out online, it can lead to financial commitments we aren’t fully considering. And by the time we realise? We’re already in too deep, spending more than we can really afford.

Financial quicksand can include different kinds of spending, such as:

By Now, Pay Later (BNPL) schemes

When you click to delay payments, or split one cost into smaller, monthly payments, you are entering into a BNPL contract. Many people find themselves agreeing to these without fully understanding what they are signing up for (e.g. the total amount of payments, interest rates, or even late fees).

More and more online retailers are offering BNPL options once you’re already trying to pay – making those ‘six easy payments’ sound much more enticing (and often just one click away).

Research undertaken by Citizens Advice reveals that one in four people regret using BNPL schemes, two in five struggle to meet repayments, and one in three miss or make late payments. Worryingly, two in five of us who have used BNPL didn’t realise it until after the sign-up process.

Online gambling

Apps are often easy to access, taking minutes to create an account. For those who experience gambling addiction or want to limit their spending, protections (maximum spending limits, forced breaks) can be difficult to access, or may have a delay in being applied.

Closing accounts can be tricky, whereas money can be deposited with just a single click. Many apps even accept Apple and Google Pay, meaning you don’t need to enter your card details at all. This can make tracking your spending much harder, meaning you’re more likely to fall into gambling debt.

Subscriptions services

Often offering free trials with just a couple of clicks, cancelling subscriptions can be extremely hard. You may need to directly call a customer service line, but finding the number isn’t easy through the website’s FAQs or menu, and only has limited availability. Or perhaps they have a complex chat system that requires you to jump through hoops with buggy chatbots sending you round in circles.

Many subscriptions turn into automatic payments unless you click to cancel in time, and some companies avoid using the word cancel altogether, to make things even more difficult to navigate.

How can you get unstuck?

It’s important to remember that financial worries will only get worse if you try to ignore them.

Buy Now, Pay Later can feel tempting, but try to consider the impact on your future budget. Is it worth the extra monthly expense over coming months? Or would it make more sense to save and then purchase a fun item later? Reserving BNPL schemes for bigger purchases where it may be necessary (e.g. to replace broken white goods) can be more helpful – just ensure you are reading all of the T&Cs (and compare prices with other retailers) before you click ‘buy’.

If you are an online gambler, using deposit limits and ‘time spent’ reminders can be highly effective. Despite only 10% of users making the most of these, more than 70% say that these tools help them to stay more in control of their gambling.

For subscription worries, make sure to note down the exact length of any subscriptions before you sign up. Setting reminders for their end dates (and allowing yourself buffer time to get in contact) can help to avoid unexpected payments and charges.

Help and advice

Speaking with Citizens Advice can be a great place to learn more about dealing with debt, and where you can turn if you have any big financial worries. Other sites and charities offering free advice and guidance include moneyhelper.org.uk, nationaldebtline.org, and stepchange.org.

Remember, that times are tough right now, but watch out for tempting offers that are too good to be true, and take a moment to recognise if you’re stepping foot into dangerous financial territory. Reach out if you need help – you don’t have to stay in financial quicksand alone.