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I am a smoking; ironically I am also in debt. I have always thought of smoking as an expensive habit, but until today, I never realised the extremity of wasted money. I t really is in comparison to reaching into my pocket, pulling out a five pound note, and setting it on fire.

I scoured the internet for a calculator to inform me of the
cost of my addiction and the results, based on one packet of twenty a day, average price of £5.20, were £1898 a year.

To start getting out of debt, I need to become smoke free. There is help out there to stop smoking, but there are also little known debt charities. Debt Helpshould come in the form of free impartial advice. Stopping smoking is one of the first steps to becoming debt free and continuing to be so.

If you have the constraint not to spend it, how about putting the money every day, that you would spend on a packet of cigarettes in a jar, and watch the money mound up.

If you’re missing the repayments on your loans and credit cards there are some things you should think about before looking for debt solutions. Missing payments can lead to a bad credit rating which will affect your future chances of being rewarded credit, so it is important that you think your options through.

Budget planning is your most potent tool in fighting debt. You need to know exactly how much money you have coming in and how much you have going out. If you know your budget well you may be able to make some cut backs to better afford the repayments and make sure no more are missed. If it isn’t possible to make changes to your budget you could try speaking to the companies you owe money to. It may be possible to have the payments lowered, but it is likely that in doing this you will be making payments for longer than originally agreed.

If you are unable to free up some money to make the payments then you might consider approaching a Debt Consolidation, but it is worth remembering that once you are with such a company you cannot get other help. You are placed into a contract and the arrangement is placed on your credit rating. The amount you pay is also greater than you total debt, as they charge interest. If you are in a large amount of debt this may be the only way of affording your repayments, but it should not be taken as a light option. If you miss repayments on their contract, there are no further options of help.

If at all possible, attempt to control your debt within your own budget, before looking for more official help.

Debt can be a de-motivating factor in a person’s life that can keep one from getting a good night’s sleep. It doesn’t mean that debt should be never ending spiral. There are several methods to escape from debt. Here are some important starting points towards Reducing Debt:

1. Discover you’re Budget,
A breakdown of the monthly outgoings and income is the excellent starting point to reveal the root causes of where your money is going. The first thing it will tell you is how much actual money you are actually pulling in (or losing) every month after you take away all the expenses. If there is a net gain, you can use this net gain to pay off debt. If there is a net loss, then you’ll need to go back to your budget to figure out what expenses are drying up your income.

2. Differentiate between ‘Core’ expenses and non-essentials
Now that you have a breakdown of all your expenses, you need to scrutinise the need for each and every one of them. One way of doing this is to categorise them, into essentials, such as food, mortgage, water, utility bills, etc and non-essentials, shopping, eating out, etc. This first pass allows you to identify where you don’t need to spend money on. The next step is to slim-down your expenses. Now that you know what you need to spend to survive, find out if there are ways to cut down on those numbers (eg: cut-down on phone bill by getting a better deal?). Keep in mind that the objective of this step is to come up with the highest possible monthly net GAIN rather than a loss.

As house prices continue to scale upwards, the middle class are faced with two options, debt from an over-inflated mortgage or a council house.

London Borough Council has been flooded with applications for social housing as families seek accommodation options that they can afford.

Many middle class professionals are finding it more and more difficult to cope with Debt accrued from a lengthy mortgage. Add to this the increases in council tax and stamp duty and even more are handing in the towel and seeking alternative accommodation.

As the housing market demands more and more from buyers, those with their hearts set on owning their own home can expect mortgage rates to increase, and by 2026 a foot on the property ladder will demand ten times the average salary.

London’s increasingly high prices are making it impossible for people to live and work in the capital, as the country becomes divided between the ‘have-nots’ and the ‘have-lots’. The only way to keep the country balanced is to increase the number of homes available for social housing.

London Councils calculate that at least £1.3 billion is needed to supply additional homes for families in the capital. This price will cover 70% of accommodation needed for social housing. Compared with 2006-2008, the amount needed to help curb homelessness has increased by 50%.

The only way to reduce debt for the elderly is to increase their state pension by at least 50%. Debt help should come in the form of free impartial advice. There are 'not for profit' organizations and charities that want to help you find the right
Debt solutions.

At present, a retired couple need at least £208 a week to survive and a single pensioner needs a weekly sum of £131. This is a stark difference to the £139.60 for a couple and £87.30 that a single pensioner currently receives. These figures show that one in five pensioners are living way below the poverty line, and this figure will continue to increase over the next five years.

Although pensions have increased slightly, this rise does not fall in line with the personal needs of an elderly person. It has been estimated that a single OAP needs to budget around £33.20 per week for food and a couple need at least £63.70. Add to this the cost of travel, special diets, energy costs, housing repairs and other personal needs, and there simply isn’t enough money to cover all of their expenses.

It is estimated that 40% of pensioners have a disability and these would require an even higher increase than those who are fit and able.

With the situation as it currently stands, pensioners will not be able to enjoy the relaxation and peace of mind that they so rightly deserve. They will not enjoy a good quality of life in their golden years, and will spend their retirement worrying about Debt and how to make the pennies stretch.

The British state pension is one of the lowest pensions in the developed world and for many; it is simply not enough to live on.

For many of us, debt is just a way of life but for others, the fear of debt entering their lives can be a nightmare.

Introvert spenders are often embarrassed by their carefulness with money and fear that people will label them boring and unadventurous.

Many are just born with an inbuilt tendency to be careful with money and, as children will often save their pocket money rather than blow it on magazines, sweets or toys. As a child, Laura said “My uncle would often become upset with me because he would give me money to buy myself a treat but I would always save it.” Maybe, even as a child, Laura new that frivolity with money could lead to debt.

Laura says that deep down she knew that saving would buy her the things that she wanted. She dreamt of owning a posh home and nice clothes. When she grew older, she purchased that nice home but never overstretched her mortgage.

Laura describes herself as someone who is not interested in taking huge gambles with money and her self-discipline helps her to stay out of debt. She says that she only purchases the things that she absolutely needs and will shop around for the cheapest and best bargains. She is always aware of the cost of living and will even end phone calls quickly if they are running up the bill. She also uses energy wisely and efficiently and every electrical appliance is turned off if it is not being used.

People have described her as being ‘stingy’ but she likes to think of herself as a solvent person in an insolvent world.

Debt can take the shine off life. Getting debt help is the first step to becoming debt free

Within the next three years, a lone parent whose youngest child reaches the age of seven, could be forced into debt when the government transfer their income support to jobseekers allowance and expect them to seek work.

Over 40% of 750,000 single parents will be classed as actively looking for work and will be expected to show that they are conscientiously looking for employment, by providing proof of applications. Surviving on a single wage to support a family without encountering serious debt problems is difficult already, and there is much speculation that taking away income support for many single parent families will make debt inevitable.

Claimants, who have been unable to find employment within one year, will be expected to take part in community work or their benefits will be stopped completely.

At present, over 295,000 single parents claim income support for children between the ages of seven to sixteen to support their family and avoid falling into debt.

From October 2008, single parents will no longer be able to claim income support when their youngest child reaches twelve years of age. By 2010, this age limit will be reduced to seven years of age. Instead, they will be transferred to jobseekers allowance.

Kate Green, Chief Executive of the Child Poverty Action Group is absolutely appalled by the decision which could mean debt for many a UK family. She says, “Taking money away from families who are already poor, will simply increase poverty and many children will have their health and well-being put at risk.”

Having your bag stolen could leave you in debt for at least six days as it is a lengthy business cancelling credit cards, filling in paperwork and paying for new keys to be cut.

When emptying out the contents of one man’s briefcase, in comparison to a woman’s handbag, it was surprising to find that a man would suffer more financial loss if he were to have his briefcase stolen.

Nearly three quarters of men carry bags in some form, whether it is a briefcase, rucksack, satchel or even a supermarket carrier bag. These are filled with approximately £319 worth of goods. Woman shoulder the contents of a smaller £255 worth of items.

Having said this, what about the bag itself? Many people are partial to the odd designer label and will spend anything from a few hundred pounds to a thousand pounds to clasp a piece of class.

An expensive handbag left on the front seat of a car is a sure fire way to lose it. Some insurance companies provide cover for up to £300 for the loss or damage to a handbag and its contents but if you are uninsured, you will be left with the debt on your shoulders.

We often carry expensive items with us which may have cost us more than we could afford. This could give the wrong impression to a thief who may believe that these items can easily be replaced. Always keep valuable items well concealed and attach them to your shoulder or hand as though they were sealed to you with glue to avoid making yourself a target to theft. Simple precautions could save you having to go through the stress - not to mention causing yourself unnecessary debt problems.

Everyday, people call the Debt Advice Trust asking for answers on a wide range of debt issues. The festive season may be over for another year, but how long are you going to be paying it off? If you put most of your Christmas expenses on credit, you'll probably be asking:

“What is the quickest way to clear my credit card debt?”

It only takes a second to run up debt on your credit card - but can take years to pay it off. This is a fairly simple question, with a fairly simple answer - although it can be hard in practice to clear debt:

Don't increase your credit card debt by continuing to spend! Cut up your cards if need be. Make it your New Years challenge to live within your means without taking out a new credit card or spending on ones you already have.

Make paying it off your priority! Consider if you can cut back somewhere on your expenses and use that money directly to pay it off, for example if you buy a magazine once a week, give it up for six months and read online magazines or borrow them from friends or the library. That extra few pound a week can make a big difference when you multiply it over a year.

Should you Consolidate? If you have high interest credit cards and short term loans, you could think about consolidating them with one debt consolidation loan. How does it work? You find a loan with smaller interest and smaller monthly repayments and pay off all your individual debts so you just have one loan to pay back. Talk to the Debt Advice Trust for advice on whether it will help with your debt.

When debt is starting to take a hold, it is easy to sink further and further into depression but Alison Brixton from Kent, shows that there are positive ways to lift yourself out of debt and back on the road to financial freedom.

Alison had four credit cards, three store cards and had run up a substantial amount of debt. She could have easily thrown in the towel and let the debt collector do his worst but instead of feeling sorry for herself, she thought up innovative ways to clear her existing debt by November 2008 and to restore her financial independence. Instead of heading toward an IVA - she's now headed toward a debt free future!

Wherever, Alison could see a lucrative opportunity, she took the initiative and gave it a go. During the summer, she invested in two bouncy castles and hired them out at events. When the summer was over, she re-sold the castles for exactly the same price as she purchased them and made a profit of £2,500, which immediately went on her outstanding debt.

She claimed back all of her bank charges which allowed her to reduce another £1,700 of accumulated debt and also switched her utility suppliers to more economical alternatives.

Alison loves a bargain and has a penchant for rare, collectable records. She started purchasing sought after albums at car boot sales and selling them on eBay, this also brought the pennies reeling in.

The simplest ideas are often the easiest way to bring in extra cash, start reducing debt, and prevent you having to enter a serious debt solution. Who knows, you may even have a lot of fun along the way!