How to avoid your own personal financial crisis

Whew, what a year! For many people, 2008 was probably their most financially challenging year ever, and amid apocalyptic predictions this week of a "winter surge" of redundancies and further sharp falls in house prices, all the signs are that we could be set for an even bumpier ride this year.

It is easy to feel there is little you can do to insulate yourself from the recessionary winds, but by giving your finances a makeover and making your money work harder, you can cushion yourself from some of the shocks that may be around the corner.

The new year is an ideal time to resolve to get a better grip on your finances. In fact, it tops the nation's list of 2009 new year's resolutions, according to price comparison website Gocompare.com. Research by the site found that paying off debts and saving money are more popular resolutions than seeing more of our family and friends, losing weight and stopping smoking.

To help you on your way, Guardian Money has compiled its top new year's resolutions to make 2009 a better year financially. If you have been flexing the plastic in a big way over the past few weeks, you may want to start with tackling your festive financial hangover.
Pay off your debts

It might sound like a daunting task, but make time to sit down and write a list of all the money you owe on credit cards, store cards, loans, overdrafts and so on.

"This is the hardest bit," says Andrew Hagger of personal finance website Moneynet.co.uk. "Many people know they have money problems but won't own up to them. If you're not prepared to face this first step, it's unlikely that you'll manage to get your finances on track."

Switching to a cheap credit card deal could be one of the best ways of getting your finances back into shape. Hagger adds: "If you have built up some debt on credit cards and store cards and you are paying interest rates of 25pc-plus, you could be paying a great deal less. Zero per cent balance-transfer deals can work well for those with expensive debt to switch over. The best thing to do, once you've transferred your balances, is to close the old card/loan accounts and also cut up your new card to stop you being tempted to use it for purchases."

Among the companies offering cards boasting 0pc interest on balance transfers for more than 12 months are Virgin Money (0pc for 16 months - also offers 0pc on purchases for six months) and HSBC (0pc for 15 months - also offers 0pc on purchases for three months).