Take a deep breath and face down your finances

Let’s be honest: no-one really enjoys going through their bills or making a budget. But it’s important to do so – and even if you find you are in debt, it’s possible to turn things around easily and for free.

What to do if you’ve overspent

Let’s start with a quick fix! If you’ve ordered goods or services online then in most cases you have a 14-day window during which you can change your mind, cancel the purchase and return what you’ve bought. So if you’ve got buyer’s regret from the sales, just get in touch with the retailers and cancel the order.

Keep your budget basic

Confronting your spending can be depressing. So keep it brief when making a budget.

Give yourself between 15 to 30 minutes maximum to make a mini budget that covers your main incomings and outgoings each month. Don’t do this in silence – that makes the whole experience stressful!. Pop on some music or stick the television on in the background. Set a timer on your phone or clock too so you know when to pack the budget away and get on with something more fun.

If this seems a bit overwhelming, StepChange has a simple budget template on its website. This is the industry standard ‘income and expenditure form’ (I&E) that financial or utilities firms will ask you to fill out if you need support with your bills. So do this once and you won’t have to do it again.

What happens next?

There you go – you’ve done the hard bit! Give yourself a break and take a day off budgeting. But set aside some time in your diary in the next day or two to seek help.

If you have no money left over each month, or what you have left will not cover an emergency, then you are by definition in ‘financial difficulties. This means all regulated businesses are obliged to come up with solutions tailored to your individual circumstances to help you get through the situation. This might involve anything from reduced payments to creative ways to help you reduce your expenditure.

Even if you have some money left over each month but not enough to cover an emergency - like the car breaking down or an unexpected bill - then you may also be considered to be in financial difficulties. Don’t try to figure this out yourself though. Contact the businesses you owe money to and ask them to help you.

If you only need a few months to get back on top of your cash, speak to your bank to see if they can give you a temporary overdraft or a payment holiday on any money you owe them. Your bank has an obligation to do what it can to try to help and not make the situation worse.

Your bank isn’t going to write off everything you've spent, but it can give you a break on charges and interest until you're back on top of your finances. If your bank or credit provider refuses to help you, or makes the situation worse, make a complaint to the Financial Ombudsman for free.

If you need longer-term help, then StepChange can step in and negotiate with your creditors.

StepChange will ask you for that budget information you’ve already prepared and will set up a tailored plan, working out what you can afford to pay each month. They then contact all your creditors on your behalf.

Watch out for businesses online that claim to be official debt management services, but charge a fee. And don’t be fooled by firms offering ‘easy’ IVAs or bankruptcy solutions. These options don’t magically sort out your debts and they can leave you without credit and with limited resources for years.

Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist. For more from Martyn, visit this link