I have put this guide together primarily because I am currently getting a lot of enquiries from people who are feeling the pinch from the credit crunch and they are asking for ways to get through it with the minimum of long term consequences. Now please understand that this is not a quick fix and it does take a lot of hard work and a great deal of sacrifice but if you are prepared for both then this will help. Remember we are a nation of borrowers and not savers and it is for this reason alone that we all find ourselves in this position.

The first thing that needs to be done when facing a financial crisis is to acknowledge that there is indeed a problem that needs to be dealt with. It is all too easy to just bury your head in the sand and hope that it will go away but that is obviously not the solution. Likewise, borrowing more to cover your present debts or trying to consolidate them with a loan is just extending your troubles. Borrowing more is not the solution. It is the reason why you find yourself in the position you are. The plan is to work with the resources you have and use them in the way that is most beneficial to you. This will instill a confidence in you and a greater understanding of the importance of living within your means. You will begin to see the true value of money and not just treat it as a commodity.

The reason why people are finding the going tough at present is because they have been spending what they don't have and borrowing far more than they should. Things might be different if the markets were not so unstable but that is not the case. Borrowing is much more difficult now due to more stringent checks and if you find yourself in the position for a loan it will undoubtedly be at a higher rate.

The best thing to do is draw up an income and expenditure sheet. In one column you tally up things such as your salary, bonuses, benefits, basically anything that you have coming in monthly. In the other column you list what you pay out monthly. This will consist of things such as your mortgage, fuel costs, outstanding loans, groceries etc... but remember that it should contain only items that are necessary for month to month living. That means no fitness club membership or subscriptions to sky sports and the like. By cutting your costs you will be on the road to saving. When it comes the time that you do finally book that holiday you will appreciate it all the more because you have saved up to be in the position to afford it.

The next thing is to reassess your outgoings. Look at ways of reducing the costs, such as changing your mortgage or remortgaging. I would never recommend interest only mortgages as a long term option, but if it is just to bridge a gap until you are back on your feet again, interest only for a while is an option. Better to meet interest only mortgage payments for a while than to fall behind completely and be looking at even more trouble. At least you will be able to keep up your other outgoings also. Once you have your finances in better order again, you can revert back to your repayment method.

You can also look for cheaper credit cards, a lot of credit card companies have put up their interest rates recently. However they are still offering reduced rates for good quality new customers. With that in mind don't stick with your provider if they have decided to rip you off you should have no loyalty there.

Another option, although by no means a recommended one, is to join together all your debts into one, either onto your mortgage or as a secured loan. This is definitely a last resort option, as it will mean you eventually have to pay off a lot more money. Only consider this if you can see no other alternative or if you think there is no way out. Although your monthly payments will be a lot less, you will be making those payments for a long time to come. Nevertheless, if you think that as things stand you run the risk of falling behind or even losing everything, this alternative could be your only realistic way out.

Look at your utility bills to see if there is any money to be saved there. Obviously by turning off lights and knocking down your heating a degree or two you will save some money, but there are other more effective ways too. Check out other service providers, particularly heating, gas and phone services to see if there is a better offer available to you. Almost everything you need for your home can be consulted online, so browse and see what's on offer.

I understand there may be some people out there who have gone beyond the advice I have detailed so far and now I will get to you and what you can do. First of all most peoples biggest problem when they are in a bad situation as far as their finances go is a complete over commitment to debt. I agree that over recent months everything has become more expensive but that said most people would be OK if it wasn't for the debt that they have be it credit card debt car loans HP or mortgages, it has all just become too much I for one recognise that.

The best way towards finding a solution to the problem, and I know I may be stating the obvious here, is to communicate with the people that did the lending. I know I said that this would seem like the obvious thing to do but some people would not give this idea the first consideration. The recurring problem in my line of business is that people have an innate fear of talking with the people they borrowed money from in the first place, preferring someone else, maybe more professionally qualified, to deal with the situation. I can only say that if a financial adviser makes the contact as opposed to the client then the outcome may not be favorable.

So start by get all your statements together along with your income and expenditure and get in touch with the lender. Make sure that all your facts are straight be prepared and you should get the result you want. In addition be realistic, if you are supposed to pay the lender 300 per month don't think you will get away with 10 pm . Whatever you do decide to pay them make sure it is a fair distribution between all the lenders of your disposal income, failure to do this will result in them not accepting your proposal, in addition be prepared to tell them what you are paying other lenders so they understand that you are not short changing them.

You must be willing to explain to them how you have found yourself in your current situation and will need to be able to propose how to get out of it. Have your income and expenditure correctly detailed showing how much you need to pay out each month. By coming up with a realistic calculation of what you can afford to pay back, you should be able to reach some agreement with your lenders. Try to come up with some sort of hope for a solution. Let them know that as soon as one debt is paid off, you will be in a position to pay more of their debt off. By creating this hope your lenders will be far more likely to look on your proposal favourably. All a lender ultimately wants is their money back, so if you can reassure them that his will happen, you should find them helping you on the road to financial recovery.

So to summarise, you need to change your spending habits, cut your costs down to the bare minimum you can do this by researching the things you have to pay for such as your utility bills etc. Also research you credit cards and loans etc to get your self on the latest best deals. Consider a remortgage or secured loan to consolidate everything. And finally if you are at the last resort get your debts together and start ringing your creditors and making deals with them, but do your homework beforehand. Above all lenders like contact lots of contact ring them before they ring you and you will be better off straight away.