Financial planning is key to avoiding debt

People worried about debt problems have been advised to take note of their expenditure and live to a workable budget.

Paul Crayston, media officer for the Money Advice Trust, told people who may be interested in pay day loans that they will not be able to allay their concerns until they fully understand their financial situation.

"Very broadly, everyone needs to have a thorough personal budget sheet or family budget sheet which means they understand ... exactly how much money is coming in and how much money is coming out every month," he explained.

Following this, he suggested that those who have been considering pay day loans may cut back on excessive expenditure in some areas, in order to find more money for essentials.

Mr Crayston said that worrying about debt is very stressful but insisted that the worst thing people could do is bury their head in the sand.

A recent study by the Institute of Fiscal Studies revealed that people with less money experience inflation much more acutely than those who are better off.

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2011-06-16 13:36:42 © Moneyextra.com