Feature

After almost a month of parties, gift buying, drinking and general celebrations, many of us welcome in the New Year with an excruciating credit card bill to pay off, let alone the hangover to sleep off.

The media continues to broadcast the bad news: that there is more personal debt than ever, that the number of voluntary bankruptcies continues to rise year on year, yet just when we should be slowing down a record year is recorded for high street retail.

Last year Citizens Advice bureaux dealt with over 1.4 million new debt problems, the equivalent of 5,300 debt problems every working day, and the figure is expected to rise in 2007.

Now even if you’re not up to your eyeballs in debt there are some good practice guidelines to follow, to ensure that you pinch the pennies where appropriate. If you want to dump the debt this year follow these tips:

• Check that you are not missing out on money that you should be getting in benefits or tax credits, tax rebates or allowances. Your local CAB can help you with this.
• If you are considering taking out a loan, make sure you shop around and get the best deal. Look out for low interest rates.
• Be wary of consolidating your debts, get advice and don’t put your home unnecessarily at risk. Defaulting on a loan secured against your home could mean you lose your home.
• Plan to build up an emergency savings fund by saving a regular amount each month.
• Shop around for the best savings rates and check regularly that it is still the best deal available.
• Check out tax efficient ways to save money like cash ISAs (Individual Savings Account).
• Be wary of low interest credit card transfers. Check the terms and conditions carefully.
• You may be losing money by sticking with your existing bank, shop around, it‘s simple to change.
• Don't automatically renew your car/holiday/house insurance without comparing prices.

For fact sheets on debt and other money issues go to www.adviceguide.org.uk.