How to solve money problems * solutions to money problems * how to solve money worries * increase income * reduce household bills

Knowing how to solve your money problems and actually doing it are very far removed from each other. Simply by consolidating all your debts into one loan or applying for an individual voluntary arrangement will only solve your money problems if you change your spending patterns.

If you don't change your attitudes to spending and borrowing, you will be back, deeper in debt and trying to solve your money problems again within a few years.

Go to the start of this article about money problems.

The UK population's debt problems have compounded over the last decade, encouraged by low interest rates, rising house prices enabling people to release equity by way of remortgaging, store and credit card companies encouraging people to spend and irresponsible lending by banks, building societies and finance houses.

Property owners, have never felt richer, as every year, their house process have increased, probably more than they actually earned in the previous year. However, instead of looking at these property increases as a long term hedge against inflation and possible retirement fund, many have been encouraged to release the equity in their properties by way of income.

This is like selling your house to pay the rates.

Money on credit has never been so accessible and easy to obtain and as a result, 40% of the UK population now have money problems to varying degrees. House repossessions are at their highest, bankruptcies are on the increase, the Government has felt it necessary to introduce legislation in the form of individual voluntary arrangements to help people in debt and the banks are making record profits amounting to double figure billions.

The whole of the UK economy is built on borrowed money and living on borrowed time.

If you wish to solve your money problems, you will most likely need to do one of two things to begin with.

• Consolidate all your debts into one affordable monthly payment. Advisable if you are seriously intent on sorting your money problems out once and for all.
  
  

• However, if your unsecured debts amount to more than £15,000, you owe this amount to more than three creditors and you can genuinely not afford to service these debt, then an individual voluntary arrangement would be an option you should investigate.

Having got yourself into a situation where you can manage your finances, you need to take further positive steps to ensure you never place yourself in a vulnerable situation again.

• Who in the right mind borrows the equivalent of half a year's income on a new car? Someone with low self esteem, someone who feels the need to impress, someone who is prepared to put themselves in debt just to be seen driving a status symbol. Who are they kidding? Only the other idiots who measure success in this manner, certainly not the people who follow this advice. If you want a nice car, get yourself in a situation where you can afford to pay cash. All things are possible if you follow this advice.
  
  

• Stop whinging about how little you earn. If you are on a low income; do something about it. There are ways of earning additional income, working from home that have the potential to earn far more money than you are earning now. Stop moaning and take steps to start earning money from home.
  
  

• If you need to make a major purchase - wait. Do you need it now? Can it wait until you have saved enough to pay cash. If you wait and pay cash, the likelihood is it will cost 75% less than if you borrow on finance.
  
  

• Do something about reducing the cost of your telephone, gas and electricity bills. Switch suppliers, this one offers the opportunity to make free calls to any UK landline telephone number all day, every day.
  
  

• But don't just stop at changing your telephone supplier, do something about cutting your electricity and gas bills as well.
  
  

• Even changing the food you put in your shopping trolley could save you £2,000 per annum. £40 per week saved, every week and a healthier lifestyle too. Healthy living equals a healthy bank balance. Manage your debts by managing your diet.

You need to get yourself and your money problems sorted and sorted quickly.

If the Bank of England were to raise interest rates by another couple of points, you could see an end to the buy to let market. It could even result in the part time landlords dumping properties back on the market. A flux of properties coming back on sale would most likely result in a drop in property prices and we would have a free for all. Not as serious as the property crash of the early nineties but sufficient to cause major problems for most borrowers.

The argument of course is that interest rates will be nowhere near as high as in the nineties. However, back in the nineties people weren't able to borrow five times their income and house prices have risen at a far greater rate than salaries.

Back in the nineties, the average house price was about two and half times the national average wage. Today it is about six times the national average income. As simple recipe for disaster and a potential time bomb.

There is no time like the present to put an end to your money worries.