According to figures from money charity Credit Action, average household debt including mortgages is £55,483 with the UK as a whole in £1.459 trillion of outstanding personal debt.
The recession has also added to consumers’ financial woes, with a staggering 1,880 people made redundant each day between January and March 2012. If you want to take the first steps towards tackling your debts, try some of the tips below:
Set a budget
Identifying your incomings and outgoings, and how much you have left over for discretionary spending, will help you have a tighter rein on your finances.
Setting aside a fixed amount for savings, mortgage payments and other essential spending will also help you avoid overspending. If you need further support to manage your debts, you can compare debt management options with Money Expert.
Pay in cash
Avoiding charging items to your debit and credit cards and using cash on a daily basis instead will mean that your balance will always truly reflect what you have in your account. Whether you decide to withdraw a daily or weekly amount of cash for items such as travel is dependent on your individual needs.
Set up a direct debit
Setting up a direct debit to pay utility bills or other fixed payments will mean that the money left over in your account is solely for discretionary spending and will help you avoid amounting interest or fines on lending. The majority of businesses also offer a small discount for making payments by direct debit.
Asses your finances regularly
Although setting a budget at the beginning of the year is a great way to get your finances in order, this amount should be regularly reviewed as your needs change. For example, you may need to set more aside in winter to allow for the festive season or in the summer, when most people take their annual holiday.
Simple ways to save money
Shopping in discount stores, using money off vouchers and renting out unused space in your home are all simply ways to make savings that will boost your household budget in the long run.