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The best way to keep your kids’ finances looking healthy in future is to start teaching them about the causes of debt as soon as possible. You should probably also make sure that your children know where to get debt help if they ever need it in future.

Three top suggestions for money-savvy kids:

Pocket money

Giving your children a set amount of money every week – and no more. They’ll soon learn to think carefully about what they want to spend money on.

Make them work for it!

Older children in particular will benefit from doing chores round the house in return for some extra cash. This teaches that money only comes to those who work for it.

Get the piggy bank out

Children need to learn that if they want something special, they must save for it. This ensures that they won’t grow up with a ‘buy now, pay later’ mentality.

Get them while they’re young – kids are brilliantly adaptable and will easily learn the basics of managing their money.

Many of us are facing up to the harsh realities of Christmas spending and are worried about the amount of debt that we have accumulated.

During the first few weeks of 2008, consumers were bombarded with demands for payments from creditors and the ‘wake up call’ for debt advice started to ‘ring in’ the New Year.

As people struggle with regular utility bills, larger credit card debt is starting to take its toll and people are struggling with spending amnesia as they try to work out where all of their hard-earned cash went! Many have faced the New Year with a bleak financial future ahead of them. It is now time for them to seek debt help and face their debt demons head on.

It is not possible to undo all of the debt that was accumulated during the holiday season but the New Year is a good time, to get to grips with a debt mountain and put your finances on a more even keel.

But how can you get rid of that Christmas debt?

A consolidation loan is an ideal way to stop the barrage of demands from creditors. You simply gather up all of last years debts and consolidate them into one, affordable low interest loan which is simply paid off each month. Any money saved could be used to build up a savings plan so as spending habits can improve and consumers have an account with something to show for their hard-earned weekly wages and a more improved credit rating.

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.”

As interest rises, it leaves income behind and householders can expect to gain £100 billion worth of debt simply from interest charges.

Figures are estimated to top the £100 billion mark, which will be the highest figure ever recorded for interest payments. Families are currently losing £1 in every £8 in interest alone for the use of goods and services.

Mortgage payers will contribute to around £72 billion pounds in interest charges and £28 billion will be soaked up in interest from loans, overdrafts and credit card debt.

There are around 25 million families in the UK, which equates to an estimated £4,000 paid out per household, in interest related debt.

The debt mountain in England is the highest in the developed world and these figures explain why so many families are declaring bankruptcy or requiring the assistance of an IVA. The age bracket of those experiencing the highest levels of debt is between the ages of 30 and 45.

However, people continue to live the ‘high life’ on credit whilst becoming a slave to their wages which, in most cases, is swallowed up in debt before the money even reaches their bank account. If things get too much, there is always another credit agreement begging to be signed which pushes the financial constraints of an individual to the limits.

The figures above should cause people to sit up, take notice and seek debt advice so as they can work to a budget which will allow them to stay afloat, when the rest of the nation is sinking into debt

All sense of responsibility has gone out of the window. UK consumers have plunged themselves into debt and are sinking hard-earned cash into interest repayments rather than their bank accounts.

Our savings ratio is at its lowest level ever and has plunged us right back to the 1960’s when there was a spending ratio of 2.1. This means that we are only saving £1 for every £50 that we spend.

So why has the savings ratio slumped so rapidly?
The Office of National Statistics (ONS) has blamed this collapse in savings on rising interest rates, tax inflation and additional household expenditure. All of this results in an increase in debt repayments which people try to repay on wages that do not fall in line with inflation. As personal debt rises, more and more people are declaring bankruptcy.

House prices have also risen over the past decade, which has created an illusion in our minds that we can spend for today and reap back the benefits in bricks and mortar. This can force people into serious financial ruin if they run up additional debt alongside mortgage repayments. These non-savers could be in for a short, sharp shock if the property market goes into meltdown

People should start clearing their outstanding debt now and make a vow to save a healthy set sum per month to avoid being entangled in the next financial whirlwind.

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.

There’s only a few hours left until the end of the year – have you made your New Years resolutions yet? If you spent the most of 2007 worrying about your debt problems, commit to making 2008 the year you get rid of debt!

Resolution 1:
Get debt advice. Talk to a debt counsellor about your finances and see what options you have. Why do you need advice? There are many debt solutions, but the one best for you will depend on your personal situation. A debt counsellor can give you advice based on all the information you give them about your income, expenses, lifestyle and debt.

Resolution 2:
Decide how you are going to get out debt and take action! Whether that be by contacting banks and lenders for a consolidated loan, looking for a debt management plan, talking to an Insolvency Practitioner about an IVA, or visiting your local court for bankruptcy forms.

Resolution 3:
Make a budget (and stick to it!). Don’t let the same debt traps follow you into 2008. Plan out all your incoming payments and expenses and budget your finances. Once you have all your expenses written down, it’s easier to see where all your money is going and where you can make changes – for example, moving into a house with lower rent. Read our advice on increasing your income and reducing your debt for some further advice.

Resolution 4:

More than seven million people in the UK keep a current account secret from their partner, according to research. It's long been known that debt and finances are a main cause of fighting and problems between couples, but this new research shows that the problem goes much deeper than that.

Abbey National bank discovered 12% of the population now keep a secret account in their latest survey, with the highest proportion belonging to those in the 25-34 age bracket. There seems to be a lack of trust when it comes to money in many relationships, which can breed from many reasons. Quite often in relationships, one partner may be careful with money whilst the other isn't. If one of the partners feels the other is irresponsible with money it can be an extremely frustrating time. The frustration is only escalated when the couple hit financial hardship and find themselves looking for debt solutions like consolidated loans, and the spendthrift of the couple feels like they are suffering from their partners financial mistakes.

The survey found that the 16-24 age group were the most honest, followed by the 55 plus group. It also found that account secrecy did not discriminate between the sexes, with both men and women admitting to hiding accounts.

Additional research on money and relationships by Financial Services Authority (FSA), has found three quarters of British couples find money the hardest topic to talk. Perhaps the fact so many people are keeping a secret stash has something to do with it.

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!

While Santa is preparing for his annual stint of popping down the chimneys, now is a good time to start reducing your debt levels as Christmas is coming full steam ahead.

Start working out a healthy budget plan and put money aside for the gifts that your children have in mind. It is also a good idea to set aside a separate fund for your food and drink indulgences over the holiday season. This will prevent you from seeing in the New Year with a mountain of debt problems.

Out of desperation, many people open store cards when the Christmas spirit starts to kick in. Anxious shoppers become immersed in a buying frenzy and somehow think that Santa will bail them out when things get tough.

One good way to save money is to start buying gifts now, rather than wait until closer to the day. This way you can start paying off and managing your debt before Christmas day has even arrived.

If you are shopping online, check that you do not pay over the odds for postage and packing. A multitude of transactions with individual postage costs can make even the smallest of purchases an expensive commodity.

Another way to curb debt is to ensure that you are up to date with all of your bills. Ask your bank if you can have an interest free overdraft for two months from December to January. This will allow you to clear any exuberant debt accrued over the festive season and allow you to remain credit worthy in the New Year.