• Budgeting gives an accurate picture of your financial position. It will almost certainly demonstrate that money is not being spent according to the priorities and will highlight where changes in spending habits can be made and, possibly, where savings can be made.

• Budgeting also helps make money go further. The fundamental aim of budgeting is to ensure that basic needs are met and that, where necessary, steps are taken to get you out of debt.

• A budget can be a very effective brake on large impulse spending.

• Budgeting can help prevent the running up of debts to the point where contractual payments can no longer be maintained.

• It will help to reduce stress levels.

Evaluate your standard of living. Advertisers are constantly telling us that, as consumers, we should happily gratify ourselves today with no thought of tomorrow. Following this route exposes you to enormous risks, particularly if you use credit to finance your standard of living.

As millions of people have eventually found out to their cost, there are no longer many, if any, guaranteed jobs for life. When evaluating how you live you need to think about what you would do if your circumstances changed dramatically.

Develop some form of cushion to help cope with a negative change in circumstances rather than spending to the limit.

Set out your financial goals - these may include such things as a pension, savings accounts for the children, etcetera. Then prioritise these and try to establish how long it will take to reach these goals. Bear in mind that all your goals will not be achievable immediately, but you may need to start planning for them now.

If you feel your situation is spiralling out of control, start to buy everything on a cash basis.

When you are thinking of buying something that is non-essential ask yourself whether it is something you or your family really need or whether it is something you just want.

Don't be afraid to haggle over prices, especially if you are paying cash. A cash customer is in a much stronger position to bargain than a credit customer.