This is simple. Never get into debt. Except for student loans and home loans - i.e.mortgages). OK, and credit card debt that you are ready to pay off the following month.

If you do have debts your money management must include a plan to pay them off. Put this another way. Borrowing on its own is not a solution to anything. But borrowing backed by an achievable plan to pay off the debt plus interest is a possible way forward.

We admit, you may borrow to make an investment in your future (see below). But borrowing does not solve a spending problem. You have to earn more or spend less. E.g. turn down the heating, take a second job, learn to cook. None of these is easy but taking on more debt (or failing to repay your existing debt) just defers a solution and makes it harder.

What you need is help. We strongly suggest you seek it at your local office of Citizen’s Advice.

Credit cards

A carefully managed credit card can allow you to borrow a slice of your monthly spending for one month interest-free. Seems like a free lunch.

But the sting in the tail is you have to manage your balances to avoid being wacked with interest rates of 15%-30% when you fail to clear the balance off monthly. Which means you have to spend time and effort managing your account. And mismanaging your account could lead to impairment of your creditworthiness.

You could use debit cards only, via an app that displays the balance on your account whenever you sign on. However debit cards surrender some protection delivered by Section 25 of the Consumer Credit Act.

In summary, manage your cash to maximise the interest you receive on balances, but taking account of the strain on your time and skills and the risk of a credit accident. Interest-bearing credit card debt is the most stupid of all financial arrangements.

Home mortgages

……are different because you are securing an essential asset - a place to live. You have a choice between paying for the use of somebody else’s house (renting) and buying (borrowing money to do so) renting and buying. If you chose to buy you will have an interest and repayments schedule which must be included in your spending plans.

Student Loans

….are also different. For two reasons:-

• you are not borrowing to spend but to make an investment in your future, and

• there is an unsual technicality: repayments are flexed against your future salary - one measure of your capacity to repay. So you are not caught in the iron grip of a fixed repayment schedule.

But they are also complicated, and the terms can change every year. Consult the student finance section of gov.uk.