The theory of improving your financial situation is very simple – increase your income, reduce your outgoings.

Of course the practicalities are very difficulty in the current economy.

The three ways of increasing your income are:

• Increasing your wage/salary.
• Reviewing your tax situation.
• Claiming all the benefits to which you’re entitled.

In the current economic climate, it may not be possible to increase your wages.

So you may need to consider if you can take another part-time job.

You should ensure you are charging enough board or rent to anyone living in your household such as grown-up children or other relatives.

You could also consider renting out a room in your home if this is possible.

Meanwhile it is a very smart idea to check you are claiming all your tax reliefs or social welfare benefits.

But income is just one side of the story – reducing your expenditure is a crucial part of securing your future.

Little cutbacks can go a long way: cutting out that coffee and sandwich during the day saves you €1000 over the year.

You can tackle your household bills by reducing consumption – or by checking for cheaper providers.

Whether it’s gas or electricty, phone and broadband, digital TV – all these costs can be reduced by applying a key principle.

Look at what we use and compare that to what we pay for.

When shopping remember that supermarkets try and tempt us to buy things we don’t really need just by the layout of the store.

By shopping online or sticking rigidly to a shopping list we can save hundreds of pounds.

You can also cut your insurance costs by visiting a broker who will do all the comparison work for you and get you the best deal available.

It can be hard adjusting your lifestyle to your straitened circumstances – but for a debtfree future, the effort is worth it.