There's no doubt about it, there is real confusion in the money markets right now. After years of cheap borrowing, the days of easy credit are almost certainly over. Analysts predict that the so called 'credit crunch' will soon start to really bite, as borrowing costs start to be passed on by banks, so we can expect to see higher costs on credit cards, loans and on our mortgages.
However, the good news is that we have compiled our 10 top tips to help you organise your finances to ride out the credit crunch storm.
1) Reduce your debts, and don't take on more!
If you are struggling to repay your debts, then taking on any more is the worst thing you can do.
If you have a mortgage, then consolidating your debts via remortgaging could also leave you further out of pocket - especially because property prices seem to be coming to a standstill.
We've all seen those ads on TV, encouraging you to consolidate all of your debts into "one easy payment", but it's not that simple - most of these schemes turn all of your unsecured debts into a secured one - which means that you really could lose your home.
2) Reduce your outgoings
The Consumer Credit Counselling Service (CCCS) has advised borrowers to reign in their spending and stop flexing their plastic.
3) Tidy up your finances
Sound's obvious, but cleaning up your finances is a sure-fire way of reducing your outgoings.
Perhaps it's that unused gym membership you pay every month, or the over-the-odds satellite TV subscription, you should go through your statements with a fine-toothed comb and cancel those unnecessary direct debits.
Keep a spending diary for a month to see what you are spending and where, and monitor your supermarket spend.
4) Tackle that credit rating
The credit crunch will hurt banks' profits, and they will certainly start passing on their costs for credit. Those with patchy credit records will find it harder to get a loan or a credit card, and will have to pay more if they do. You are more likely to get the best rate for loans and credit cards if you have a good credit rating. There are several ways you can improve your credit rating:
Always close unused or unwanted credit card accounts, even if they show a zero balance.
Pay off more than just the minimum amount whenever possible
Try and set up direct debit payments for loan repayments to avoid expensive late payment charges.
And never miss out or be late with credit card payments
5) Build up a savings account
You never know what may happen in the future, and as a general rule it makes sense to have an emergency fund just in case. Some advisers recommend that you have enough to cover at least three to six month's outgoings.
Don't panic if you don't have that fund to hand right now, you can make a start today by building up your fund gradually.
While mortgage rates might be at a nine year high, savings accounts have broken through the 7% barrier. That's because banks want to get as much money through their front doors.
So start getting that savings fund in place, and save as much as you can as often as you can. An ISA should be your first port of call, as all the interest you earn is free from tax.
6) Tackle your most expensive debts
You should always tackle your debts before starting to save, as the benefits you gain from saving will be wiped out by the hefty rate of interest you're charged on your debts. Only once you have got back into the black should you even think about starting to save.
7) Defer big purchases
We live in a buy-now pay-later culture - and this is one of the reasons why we are experiencing this credit crunch.
If you have any big purchases planned, such as a new car or home improvements, it may be a sensible idea to defer them for a year.
8) Transfer your balances
If you have several credit cards, look into transferring the balances to one or two that have the lowest interest rates, and then get rid of the other credit cards.
By limiting the number of credit cards that you own you will not have to worry about juggling a repayment schedule that you can't afford to keep up with.
Once you have the balances on your remaining credit card under control then try to limit your purchases to things that you really need.
9) Develop responsible spending habits
Once you have given your finances a real spring clean, you should start to develop responsible spending habits.
Remember, every purchase you make, however small, builds up. Buying your lunch every day at £5 a time can work out to be over £100 per month!
Think about whether you can afford things before splashing out, and don't make purchases as soon as you're paid - bank accounts can be deceptive! deferring purchases such as clothes before you're paid? That way you will know if you truly can afford them.
10) Don't suffer in silence
According to the Citizens' Advice Bureau (CAB), debt inquiries are at record levels, and have increased by 20% in the last year alone - a worrying sign that people are becoming overwhelmed by the credit boom.
If you can't afford to make repayments for all your debts, don't worry! Get in touch with your creditors and explain your situation. You won't be the only customer having problems with making repayments and many lenders have dedicated teams to help arrange a personal repayment plan for you.
There are free services available for you to use:
The National Consumer Credit Counselling Service (http://www.cccs.co.uk/) is a registered charity dedicated to providing free and confidential debt counselling.
The Citizens' Advice Bureau (http://www.citizensadvice.org.uk/) also offers free, independent and confidential advice.
The National debtline (0808 808 4000), gives free and confidential advice, and will also send you a free information pack to help you begin to tackle your debt.