h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Sounds boring, but it's sensible. You need to know what you're spending.

As a first step, make a list of all your weekly or monthly outgoings, eg rent, mortgage, gas, electricity, telephone, water rates, insurance, childcare fees (if appropriate), car related costs, loans etc. Make sure you know what they are.

Look at your other outgoings such as food, clothing, holidays and entertainment.

Subtract outgoings from income and see where you are.

Create a budget for your weekly or monthly outgoings and stick to it.

Make a grocery list when going to the supermarket and stick to it. Supermarkets are good at persuading you to part with money on imulse buys are are past masters at the art of putting temptation in your way. It helps to have made a list of what meals you are going to eat during the following week, so that you do not spend money on food and then have to throw it away because you haven't used it.

If you find yourself in difficulties, don't ignore it - it will noly get worse. Tell your creditors your position and negotiate with them. They would sooner have something than nothing. See the Citizen's Advice Bureau, who have advice on credit and debt and whose money advisers may be able to negotiate with your creditors on your behalf. Work out a reasonable offer to repay the money owed.

Prioritise your debts. Your mortgage or rental is probably the most important - you don't want to be thrown out on the street. Gas and electricity can be cut off if you fail to pay.

Don't borrow to pay off your debts without getting advice first - you could just be getting into deeper water.

If you've lost your job - make sure you're claiming all the benefits you're entitled to. Check with a Welfare Benefits Officer. Check with your insurance to see if your payments are covered.

If you are taken to court, fill in the papers and let the court have all the facts. Always attend court hearings and take a copy of your personal budget with you. Make sure you keep copies of any letters.

Oh, I forgot to say in the bit about creating a budget, that you can pay more or less all of your outgoings monthly, including things like gas, electricity, telephone, insurance etc. It makes paying for things easier rather than having to find the money quarterly or annually.

Include in your budget an item for saving as well. Experts say that you should have at least three months income savings (known sometimes as a 'get stuffed' saving. That way, if you lose your job, or have had enough of the one you've got, you have something in hand while you find another one. Aim to save 5-10% of your monthly income, if possible.