1. Use your savings

Think holistically. It only makes sense to have savings and debts at the same time if your savings are earning a better after-tax return than the debts are costing you. Rarely is this the case. Even offset mortgages, where your savings are used to reduce your mortgage, may cost more than you think because there are often cheaper deals available on other types of mortgages.

2. Speed up your repayments

The sooner you repay your debts, the less they will cost you. So don’t just make minimum repayments on your credit card. Pay off as much as you can afford each month. If you have personal loans, regular overpayments may not be feasible, so try to build some extra savings in a separate account, such as a cash Isa. Once you have enough, clear the loan with one payment. You may have to pay an early redemption charge, but it is often worth repaying the loan early nevertheless.

3. Control your spending

Are you living beyond your means? If you sink into overdraft at the end of the month, the answer is probably yes. To find out where all your money is going, start to keep a daily record of your spending. Think carefully before you buy anything: ask yourself whether it is really essential. Cut all non-essential spending and channel it into clearing your debts. Buy cheaper brands, where you can, and pay in cash to prevent yourself from sinking further into debt.

4. Draw up a budget

A monthly budget can help you to keep control of your finances and spot ways of making cutbacks. The Consumer Credit Counselling Service provides useful tips on preparing a personal budget at www.cccs.co.uk.

5. Switch credit cards

Clearing outstanding credit card balances should be a priority, but interest charges slow the process. Transfer your balance to a card with a 0 per cent introductory rate for at least six months, such as those offered by egg, Virgin Money, Nationwide or Tesco. That way, every penny you pay your credit card company will help to reduce your balance.

6. Switch to a better bank

Interest charges on some overdrafts are very high. If you are paying 10 per cent or more, and if you spend much of your time in the red, you should think about switching. Don’t assume that just because you are in debt, you are locked into your current account. Alliance & Leicester's Premier or Premier Plus have 12 months interest-free overdraft and then charge interest at only 6.9 per cent thereafter.

7. Switch energy and phone companies

Find out whether you can save money on your energy and phone bills by switching your provider. Websites such as www.uswitch.co.uk will tell you the cheapest providers in your area, based on current usage. If your mobile bills are high, consider pay-as-you-go and limit yourself to a certain sum each month.

8. Increase your income

Consider overtime, an extra part-time job two or three evenings a week or letting out a room in your home to a lodger. Under the rent-a-room scheme you can earn a tax-free £4,250 per year.

9. Sell your possessions

If it’s good enough for Sir Elton John, it can work for you. Somebody may be prepared to pay good money for all that junk in the attic. Auction unwanted items on www.ebay.co.uk or rent a pitch at a local car boot sale.

10. Move in with relatives

It may be a horrible thought, but as a last resort you could consider moving back to live with your parents to give yourself some breathing space.

Finally, if you have already tried out these tips and feel you are not making any headway with your debts, do not panic. There are a number of free debt counselling services that can help you. Try your local Citizens Advice Bureau (see telephone directory), the Consumer Credit Counselling Service on 0800 1381111 or National Debtline on 0808 8084000.

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