As a nation we are increasingly worried about out finances, not surprising considering the current economic uncertainty and talk of recession. The key according to the experts is to stop worrying and do something about it.

Abbey Insurance says half a million Brits spend over 25 hours a week worrying. 67% fear their house and its contents are at risk, while 48% worry about money.

Research carried out by monesupermarket.com found that 30% of Brits don’t think they can cope much longer financially. It says UK consumers owe more than £1.3 trillion on loans, credit cards and overdrafts, and while these debts are rising, the ability to cope with repayments is declining.

"Just 16 per cent of Brits said they had no financial worries, indicating people from all walks of life and income levels are feeling the pinch from rising bills and taxes,” says Tim Moss, Head of Loans and Debt at moneysupermarket.com.
“Consumers are now going to have to deal with spiralling debts and increasing food prices alongside the rapidly changing credit environment,” says Jamie King Director, IDT Finance. “Credit is drying up and the sooner spenders realise this and become more adept at saving and spending their own money…the more likely it is they’ll escape financial woe.”

Tim Moss of moneysupermarket.com agrees: "Anyone starting to worry about their financial situation shouldn't bury their head in the sand – problems are easier to tackle when addressed early. People should start by gathering their paperwork and working out the true scale of their problems. From there they must prioritise bills and pay the essentials such as mortgage or rent first. Non-essential items such as magazine subscriptions and pay-TV might have to sacrificed.”

But warns John Hall, Chief Executive newtomorrow.com don’t make any rash decisions, look at all the options available. “Often, the desire to recover the situation as quickly as possible can lead to the wrong choices – making things even worse. There is no fixed route to recovery for everyone, the solutions need to be tailored to each individual and will depend on the types of debt, the amounts outstanding, available assets and the amount that can be paid off each month.”

For example, he warns against taking out another loan to pay off creditors. “Further borrowing is unlikely to solve the situation...and consolidation loans often come at a price – high interest rates over many years with your home as security. Consolidation loans might stave off the wolves for a while but it is unlikely to provide an acceptable long-term solution.” Instead he suggest talking to existing creditors.

Shopping around on the internet can also help you find the best deals on insurance, loans, mortgages and credit card rates and it is always worth consulting a professional on the best ways of managing money and clearing debts.

“Seek advice,” says John Hall. “There may be other solutions and it is important to understand how the debt accumulated and what has to change to make sure debts are repaid without causing problems down the line.” Independent advice is always available from organisation such as the the Citizens Advice Bureau or the Consumer Credit Counselling Service.