"Annual income twenty pounds, annual expenditure nineteen pounds nineteen shillings and six pence, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery." This financial advice, given by Mr Micawber in Charles Dickens' novel "David Copperfield," captures the most fundamental aspect of financial success. However there is more to it than simply avoiding overspending.
Define the financial success you want to achieve. Success may be getting out of debt, it may be paying for a dream holiday, saving the deposit to buy a property or starting a new business. Write down your goals, rather than just keeping them in your head: Forbes journalist Michael Kay suggests that keeping a written record reinforces the importance of your financial goals.
Write out a financial plan that is rational and methodical based on your income, bills and other outgoings. Financial success isn't likely to happen overnight, so don't set yourself unrealistic goals. You'll only set yourself up to fail. Saving regularly is one aspect of financial comfort, but if you approach it like an extreme diet in the hope that your pot of savings grows at warp speed, you're more likely to give up.
If possible get expert advice about savings plans and methods of economising on household utilities. Give yourself a financial health check at the Money Advice Service website; this is a free service set up by the government to help you manage your finances. This will help you discover the weaknesses and strengths in your existing use of your income. Review your plan periodically to make sure you're keeping on track.
Deal with your debts first. Get advice from the free debt advice services such as National Debtline and StepChange. These specialists offer confidential advice and realistic solutions. In addition, National Debtline provides regional services because the laws on debt vary between England, Scotland, Wales and Northern Ireland.
If you need a loan to pay off debts, look for a credit union in your area at the Association of British Credit Unions or Find Your Credit Union websites. These are community-based savings and loan organisations and savers have the satisfaction of knowing that their investment in the credit union is supporting neighbours and local businesses rather than anonymous shareholders. Credit unions are regulated by the Financial Services Authority.
Explore alternative ways of paying for household repairs, holidays or even hairdressing. For example, consider what you could offer to a community barter system that is exchangeable. If there isn't a barter system in your local area, consider setting one up; that way you'll help others as well as yourself. You can also use an online barter system at U-Exchange which covers the UK. Car boot sales provide another excellent outlet for getting rid of clutter and making some extra cash. Make it fun by doing a boot sale with a friend; if you don't have enough things to take, offer to declutter your neighbour's homes and sell their stuff for a share of the profits.
Be cautious with payday loan companies. These may offer a short term solution to a financial problem, but if you're unable to pay the loan off within the specified time, you'll create more debt. Check with the Office of Fair Trading that any company offering you a loan has a licence under the Consumer Credit Act.