2014 ‘the year of budgeting’

One in eight consumers are determined to sort out their outgoings in 2014 as they target financial solidity. 

Research by the AA has discovered 12.5 per cent of the UK's population have set themselves the goal of better organising their money.

Part of the reason for doing so appears to be a post-Christmas financial hangover, as over a quarter of those questioned admitted they had no idea how they managed to spend so much money over the festive period. 

Recognising that it is not a sustainable situation, people are looking to take a much more responsible attitude to their finances as they try to avoid racking up extensive personal debt.

However, six per cent of respondents revealed they are still planning to borrow money in 2014 and these people need to make sure they can afford the repayments before committing themselves to unsecured lending. 

Mark Huggins, director of AA Financial Services, said: "People can often switch off and hope for the best when it comes to their finances but good planning and if needed, sensible borrowing, can help to avoid the panic when bills arrive on the doorstep.

"Getting spending under control and well planned at the start of the year is the best way to avoid the stress of unforeseen costs and expenses."

Of course, the easiest way for consumers to bring their financial situation under control is to set up a budget and stick to it, as doing so ensures they will know exactly how much disposable income they have. 

By dividing outgoings into a series of categories – including household bills, living costs, travel and leisure – people can review their spending at the end of each month and see where savings can be made. 

For those who really struggle with money management, keeping a spending diary is a great way to identify non-essential purchases.

By Joe White