As consumers continue to do battle with the oppressive pressures placed on their finances by the credit crunch and rising inflation, making a stringent budget has been identified as a principal course of action for those looking to make cutbacks.

In recent comments, the Fair Investment Company has claimed that while many people shy away from drawing up such money management agendas, doing so can help to rescue household finances from the jaws of the crunch and bring spending back under control. The financial advice site suggested that effective budgeting may be increasingly important for Britons as the costs of petrol remain at near-record levels and food prices continue to escalate.

Daniela Gieseler, spokesperson for the group, reminded consumers that all is not lost in the battle against inhibitive living expenditure. “There are a number of things you can do to practice damage control and limit your financial fallout from the credit crunch, such as cutting back to save pennies where possible and practicing good money management,” she explained.

In addition to setting a budget and cutting out unnecessary areas of spending, Ms Gieseler urged people to limit their reliance on credit cards in an effort to avoid interest fees charged on such products. She explained that while people may have credit available, that does not mean it is necessary to use it. For those who are inundated with offers from card providers when they pick up their post each morning, the website iterated the importance of demonstrating a strong resolve when it comes to resisting temptation.

For those who have racked up debts on credit cards in addition to other areas of financial commitment, taking out a debt consolidation loan may prove an attractive way to get finances back on the straight and narrow. In stretching repayments over a longer period, consumers may find they are able to manage their budgets more effectively and reduce the likelihood of defaulting on a payment.

“Try switching to a zero per cent balance transfer credit card to clear the others and repay it before the offer runs out and the interest shoots up. Or, try using a prepaid credit card that does not offer the temptation of credit usually associated with a credit card,” the Fair Investment Company advised.

Above all, the firm urged consumers to face the facts about their financial situation and make sure they read bank accounts, bills and credit card statements to avoid finding themselves in a worse situation than they had expected in months down the line. This was identified as the most important course of action on the way to becoming money savvy. However, it claimed that too many people ignore the state of their finances, putting themselves at risk of limiting their future access to loans and credit because of missed payments.

Back in July, Zurich also warned that workers who fail to take their finances by the horns could find themselves working well into retirement because they ignored the need to put money aside for the future.

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