The most important thing is to avoid unmanageable debts. That means steering clear of credit cards, store cards, or loans that you don't really need. By borrowing in this way you will be charged very high interest and your debt could easily spiral out of control.

To avoid getting into debt in the first place follow these simple rules:

  • Make sure you know where your money is going - keep a note of all your incomings and spending. This will help you decide where you can cut back if you're living beyond your means.
  • Keep some money tucked away - just in case.
  • Be realistic about what you can afford - if you're having trouble paying your phone bill it's probably not a good idea to fork out £800 for a high-definition TV.
  • Pay for everything outright if you can - it might seem like a money-saver if you pay for something over a five-year period, but if the APR is at an astronomical rate you could end up paying double the price.
  • Use standing orders to pay for your regular bills - this will allow you to arrange a specific date for the companies to take the money out of your account, i.e. payday.
  • Before you start saving, spending, or investing, pay off debts. You will lose more money on high interest payments than you're ever likely to make with most savings and investments. You'll be better off in the long run if you work harder at ditching the debt.

If you are in debt please do not ignore it, this will make things worse - seek professional help