There is no denying that Britain is slowly emerging from the recession which has troubled us for over six years now, although the full effects of our much vaunted economic recovery are yet to be fully felt. The financial crisis and the stagnant period after, where we were forced to watch helplessly as our economy decayed around us, was a very difficult time for millions of households. For many, planning ahead for the future financially was a far off dream, a luxury if you will, so busy were we with keeping our heads above water as the costs of living continued to soar around us. These price rises, coupled with stagnant wage growth and mass redundancies, made survival the primary focus. But now that our economic recovery is underway, it is now time to start thinking ahead and face the task of not only taking on our debts but rebuilding our financial security.

Now paying off debt, especially when you have lots of it, and building an emergency fund is all too easy to say but rather more difficult to actually do. With official estimates showing that our disposable incomes have dropped by anywhere from 30-50%, it is a fact that our still high costs of living make the prospect of rebuilding our finances prohibitive at best. Here are a few tips on what to consider if you are planning on improving your financial situation.

Budget, budget, budget

This is perhaps stating the obvious but creating a budget really is the first place to start when embarking on any kind of financial planning. Drawing up a budget will allow you to paint a clear picture of what you’re essential spending (rent, bills, food, transport, childcare, debt payments) costs are and how much you are spending on them vs. your income. Anything left over after this is your disposable income, which can be used towards building an emergency fund and for leisure purposes, of course. If your essential spending is far too high, creating a budget will allow you to pinpoint exactly how much you are spending on what, and then act accordingly.

Check your credit score

It is very, very important to check your credit score from time to time, so that you can check up on what debts you have and how much you owe to each of your creditors. Any credit cards, loans, store cards, mortgages, etc, will be visible, as will any defaults or CCJs that may be lurking.

Demonstrate your stability and settle

Admittedly this is typically a more suitable move for the older among us, but settling yourself at home and work and then staying there will add a calming and stable influence to your life. Your credit score will benefit from this more stable approach too, as lenders will consider you a more reliable prospect.

Avoid short-term loans and cut-up your cards

Short-term loans are undoubtedly convenient and do provide a temporary relief when you’re faced with mounting financial commitments. But make no mistake; the short-term benefits of short-term borrowing are outweighed by the potentially disastrous costs that you will pay for the privilege of borrowing in this way. Short-term loans, such as payday and logbook loans, are very expensive methods of borrowing and should be avoided if you’re not convinced that you’ll be able to pay them off comfortably. If you’re really struggling with your money, then the Citizens Advice Bureau or StepChange debt charity could both be a great help..

Be realistic; there is no quick fix for the task at hand

Unless you happen to enjoy a high income and fairly low monthly outgoings, getting back on a steady financial footing is likely to be a long-term business. It is important to be aware of this and be realistic about what you can reasonably hope to achieve, because setting yourself impossible goals and putting yourself under too much pressure will only result in a loss of morale and the failure of your financial master plan. It could well take a number of years of before you have paid off your household debts and built-up anything resembling a sizable emergency fund, but just remember that Rome wasn’t built in a day; stay positive, stick to your plan, and remember that your short-term endeavours will have long-term benefits.