According to GE Home Money Home Lending, 77% of adults have set themselves a monthly spending limit but of these, 60% said they go over their budget every month, with an average over-spend of £154. One in twelve admitted to exceeding their budget by more than £300 per month.

But some people are doing their best to only spend what they can afford – the research found that 29% of people manage to stick to their budget, while 11% spend less than their budget. So it is possible to keep your finances under control but for some it might be harder than others.

Chris Tapp of Moneybasics.co.uk says: “It is heartening that millions of Britons set themselves a monthly budget but the regularity with which they exceed these limits is extremely worrying. Easy access to cheap credit has conditioned many to believe it doesn’t matter if they spend too much as they can always borrow to meet any shortfall. Sadly it is this type of thinking that has trapped thousands in a cycle of misery and debt.”

If you are one of those who can't keep to the budget, talk to a professional mortgage adviser about using some of your home's equity to safely and sensibly get your finances under control. The days of easy credit are long gone, but good, well-sourced credit is still a perfectly viable option.

SOURCE: GEMHL, Moneybasics.co.uk, 15/04/10

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People pinning their retirement dreams on downsizing their property or using their existing equity will be in for a shock. They might find that they do not have as much equity as they think and they will certainly underestimate how much you need to comfortably see yourself through your retirement.

According to Standard Life, a combination of a fall in house prices and annuity rates has dealt a double blow to many, with the average pension pot from downsizing only providing £43.50 a week income. It says banking on downsizing your home or using a secured loan to generate sufficient income is a potential retirement disaster unless you have also made provision elsewhere.

Andrew Tully, senior pensions policy manager at Standard Life says: "Our recent research shows many people are still pinning their hopes on using property to generate their retirement income, favouring this asset class over savings accounts and pensions.

"However, our analysis shows many people need a reality check to get their long-term financial planning back on track. The old adage of not putting all your eggs in one basket has never been more appropriate."

Talk to a financial adviser about your long-term plans. They will show you that while your home is an important asset, you need to do more – that means increasing savings, making sure to do all you can to reduce debt and thinking about pension provisions. Home equity will play a crucial role in many Brits' retirement plans, but people have to have more provisions set aside.

SOURCE: Standard Life, 07/04/10

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According to the research by Unbiased.co.uk, by the end of 2008, the public were conscious of their debt levels and working hard to repay what they owed, with £1.68 being repaid for every pound they saved. But these virtuous repayment habits of 2008 failed to continue, with the borrowed amount creeping higher by the start of 2009 and increasing throughout the year.

Overall in 2009, Brits borrowed a staggering £28.2bn worth of non-mortgage debt with only £71.6bn being saved. People are once again turning to short-term solutions to help them get through the month. The rest of the borrowing came from safer equity release, but this is still proof that people are not listening to professional financial advice when it comes to saving and borrowing.

Karen Barrett, chief executive of Unbiased.co.uk says: "While we may be officially out of recession, these latest figures highlight that consumers are back behaving as they did before the onset of the credit crunch, even though the economy is still not back to full strength. This trend of lower savings levels highlight a real concern for the public's future financial well-being, especially as these falls in savings levels haven't resulted in the public paying off an increasing amount of their debts.

"While many believe we are over the worst, there is still a lot of consumer confusion out there right now, and it is vital people seek professional advice from a financial adviser to enable them to strike the best balance between borrowing, saving and other aspects of their finances throughout these difficult times."

SOURCE: Unbiased.co.uk, 01/04/10

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Credit card debt in particular is very expensive to manage. According to Defaqto, with a typical APR and minimum payment plan to pay off a £1,000 credit card balance would take nearly 15 years at 9.9%, 21 years at 15.9% and more than 37 years if the rate was at 20.9%.

David Black, banking specialist at Defaqto, says: “The dangers of making low minimum repayments cannot be emphasised enough. Someone making a minimum 2% monthly repayment on a £1,000 balance on a credit card charging 20.9% APR would take 37 years one month to clear the balance."

It doesn't help that many credit cards demand you pay off the cheapest purchases first, leaving the bigger, more expensive payments stuck on the card – simply, there is no upside to credit card debt.

So get out of the credit card debt cycle and talk to a professional adviser about moving all your debts onto a secured loan. By using your home's equity you can be free of the burden of debts with huge repayment rates and instead enjoy one, affordable rate that will give you the time and the space to finally save instead of just spend.

SOURCE: Defaqto, 18/03/10

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According to Callcredit, one in four people between 35 and 44 years say that a drop of just £300 in monthly income would cause them to default on their mortgage payment. This is simply not enough of a cushion and means millions of Brits are up to their necks in debt.

The research also showed a noticeable reduction in the proportion of people paying off their credit card bills in full each month with one in twenty people who previously paid their bills in full now paying just the minimum or a fixed amount.

Graham Lund, managing director of Callcredit says: "These statistics are extremely alarming. A significant proportion of people, many of who may have families to support, are living on a financial precipice, where just one negative event, such as a reduction in paid overtime or an unexpected expense could have disastrous financial consequences."

If you are on the edge, talk to a mortgage professional. They can help you find ways to use your home to ease your burden – by consolidating your debts into your home's equity then you can give yourself some room to pay off credit card and personal loan debt rather than just manage it. You can also give yourself a bigger buffer than £300, so if something does happen, you can be safe in the knowledge that your finances will remain stable.

SOURCE: CallCredit, 12/03/10

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According to insolvency body R3, a quarter of debt management plans will last ten years or more, even though the plans are meant to be a short-term repayment plan between an individual and their creditors.

Peter Sargent president of R3 says: "Debt plans can play an important role in offering a manageable solution to individuals who are able to pay back their debts. However, the sheer length of some plans indicates that the amount of debt these individuals have is too large – these inappropriately lengthy plans people become slaves to their debts."

Having to bow down to debt for years is not the answer – it might mean a decade of no credit and no hope. But by consolidating your debts into one manageable secured loan you could avoid the years of pain. One low payment means room to pay off debt rather than just manage it and it means a better financial life.

Talk to a mortgage adviser about avoiding debt slavery and instead be free of your debt burdens with a sensible, manageable secured loan.

SOURCE: R3, 05/03/10

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A secured loan is a loan on top of your mortgage, sometimes called a second mortgage. In the past they were commonplace and many people took them out while credit was cheap and spending was easy.

But now, in the wake of the deepest recession in modern times, secured loan lending has all but stopped. Most lenders thought it too risky to offer people even more credit on top of what they already had to handle debts. Also, many people became repossessed or at least got into financial difficulties thanks to having an extra loan on top of their mortgage.

But things have changed in two years. People are much more realisitic about borrowing, less people are spending beyond their means and more people want to get serious and sensible about their debt management.

That's why secured loans are still a viable option. There are still lenders out there who will happily lend to people who want to use the financial products to consolidate their unsecured debts and have a plan to pay off the secured loan in a timely manner.

But those lenders will only offer people a second mortgage if they have a water-tight plan. They will only lend to them if their application is impeccable and they will only lend after the borrower has spoken to a mortgage expert. In the wake of the financial crisis, the watchword is caution and safety, but if you can prove both then a secured loan lender may be happy to help you consolidate your debts and safely manage your money.

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Since 2006 as the economic downturn took hold, credit card rates have steadily increased, with the average rate today hitting a 12 year high of 18.8%, according to Moneyfacts, and now they are higher than they were at the end of the nineties.

Michelle Slade, of Moneyfacts says: "The UK continues to suffer from a high level of unemployment and providers are worried about the increased risk of customers not repaying their debts. This increased risk continues to be passed on to both new and existing credit card customers through higher rates."

The website says that borrowers with £5,000 debt on the card, who just repay the minimum each month, will now repay an additional £2,289 over the life of the debt than they would have in February 2006.

Of course, on top of that there are charges such as balance transfer, cash withdrawal and foreign transfer fees also continuing to go up, leaving unsecured debt customers paying more across the board.

Andrew Hagger of Moneynet.co.uk says: "Just because you sign up to a card with an attractive rate, it doesn’t mean it’s going to remain that way, with increasing numbers of customers receiving notification that their rate is being hiked even though they are adhering to the terms and conditions of their agreement.

"With the UK suffering from a surge in unemployment and the potential of more job losses to come if public spending is curtailed, just as with unsecured personal loans, it’s no surprise to see rates remain stubbornly high."

If your unsecured debts are rocketing and becoming even harder to manage it might be time to move your unsecured debts onto your mortgage. By consolidating your unsecured debts onto your secured asset you may find you pay a lower rate. That means you have more money each month to pay off your debt, not just service it. Talk to a mortgage expert about moving your debt to a cheaper, safer alternative.

SOURCE: Moneyfacts.co.uk, Moneynet.co.uk, 16/02/10

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The paper recently reported that one of David Cameron’s rising stars had her house repossessed over an unsettled debt of £324,000. Adeela Shafi opened the 2008 party conference and tipped to be an important MP if the Conservatives came into power this year.

But that did not stop her mortgage lender seeking a county court judgement over £324,000 owed by her after she missed mortgage payments. This led to a judge deciding that the home had to be repossessed. But her miseries didn't end there – the paper says that the property had to be sold for a knockdown price of £250,000 and now Shafi is liable for the remaining £74,000.

This tale highlights two things – one, if you do not keep up repayments on your debts then you can lose your home, whoever you are. And two, if you get into serious difficulty and receive court judgments then you need to find some expert help fast to stop the courts taking your home.

If you are struggling with your mortgage or any other secured debt, talk to a financial professional before you lose your home. It doesn't matter who you are or what job you have, defaulting on your debts is a serious issue.

SOURCE: Mail on Sunday, 06/02/10

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The Consumer Credit Counselling Service recommended insolvency to 39,663 of its clients – that's an annual increase of 93% in overall insolvency recommendations.

More than 20,000 people came to the charity and were recommended bankruptcy, nearly 12,000 were recommended Individual Voluntary Agreements and more than 7,000 offered debt relief orders in the last 12 months.

Delroy Corinaldi, CCCS director of external affairs says: "Although there has recently been positive signs in the economy, our figures highlight the high numbers of people with unmanageable debt, for which insolvency is the most appropriate solution."

There is no doubt that those people who came to the CCCS were in need of an insolvency, but it needn't get that far. Insolvencies are literally the last throw of the dice and are very difficult to come back from. Between that first red letter through the letter box and insolvency there are a world of options to consider.

If you are struggling with your secured and unsecured debts, talk to a mortgage adviser about those options before you run out of them.

SOURCE: CCCS, 04/02/10

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