Where possible, steer clear of debt and consider whether a loan or credit card debt is absolutely necessary. It may seem like the easy solution to your money problems, but a loan can all too easily become a huge weight you just can't get out of.

Recent research by MoneyExpert.com reveals that six and a half million people in the UK have had to consolidate their debts in the last three years, in an attempt to keep their finances under control.

And with personal loan debt almost four times higher than last year, Britons, on average, have to work 70 days solid to earn enough money just to pay off the interest on debt, let alone re-paying the actual debt itself, according to new figures from Unbiased.co.uk.

'It is always a good idea to consider alternatives before taking out a loan. If you have some savings, then dipping into your nest egg is likely to cost far less than borrowing money, even if it is a low-cost loan,' says David Kuo, Head of Personal Finance at Fool.co.uk.

'Additionally, delaying your purchase and putting away some spare cash is bound to work out cheaper in the long-run.'

Butler-Bowdon recommends avoiding debt, but when you do, ensure it is to create or buy an asset that will generate income. Keep your borrowing at an absolute minimum and keep your payments affordable to prevent falling behind.

It may be easier to simply accept the first loan you see, but sticking with your current bank and failing to shop around could cost you!

Do your research

'Learn as much as you can about financial principles and how to save and invest. Nothing learned here is ever wasted,' says Tom Butler-Bowdon.

Yet the majority of Britons are in the dark about a range of financial issues. For example, most have no idea what their credit rating actually is. Although 67 per cent of consumers know their credit rating has declined in the last year, 41 per cent don't know that the way they use credit cards affects their score, according to Equifax.

And two thirds of Britons do not have an ISA, the majority because they incorrectly believe that you need a large lump sum to open one or that they won't be allowed instant access to their money, according to a report from Nationwide.

'ISAs were introduced ten years ago and yet some people still do not understand them,' says Matthew Carter, director for savings at Nationwide. 'Anyone can take advantage of tax-efficient savings.'

For more money saving and personal finance tips, advice, news and videos, visit www.financedaily.co.uk

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