Creating a budget is essential

Families that are struggling to make ends meet and are tempted to dip into funds earning the best savings interest rates have been offered some much needed advice.

David Rodger, managing director of The Debt Advice Foundation, said that many people struggle to find the time to sit down and really think about their income and expenditure but there really is no other option.

He said it may sound like a cliché but that is because creating a clear budget is so important.

"Start by writing down what money you have coming in versus what you have going out and then think about what you have available to spend each week and plan how to pay for the everyday things and also the big things like Christmas, birthdays and back to school," Mr Rodger said.

A report from the Institure for Fiscal Studies revealed that many people did not begin to feel the effect of the recession until after the economy stopped contracting, suggesting that hardship was delayed rather than prevented.

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2011-09-14 16:51:34 © Moneyextra.com