A bad credit problem can influence your every waking – and sleeping – hour. There are few things more worrying than wondering how to make ends meet, and when your outgoings, comprising loans, cards, hire purchase deals and such like, are biting huge chunks out of your income, it really can look like an impossible thing to sort out.

One major problem is denial. Although you're well aware of the debts intellectually, there's an emotional block on them. So to start with, write down all your outgoings, what are their values and how long you have left to pay them. This, of course means everything. You have to be honest with yourself.

It could be time to consider a consolidation loan. You can take out one big loan with a long repayment term and pay a small amount off every month. For the first few months it might look like nothing is happening, but persevere and you will eventually see that your payments are taking larger and larger bites out of the consolidation loan. Hopefully by now you'll have cut up your credit cards, because the last thing you want is to be paying off more debts. Self-discipline is key. But the interest will be a whole lot more manageable.

You can also look at what else you're spending your money on. It's amazing how much of our money we waste on needless purchases. It's also a good time to start shopping around. Prices of essential items vary widely from store to store; saving five pence on a tin of food might not seem much, but remember, this is for the long-term, and you'll be making savings all along. Keep all your change in a jar and once every few months put it in bags and deposit it in your bank account. Wherever possible, buy in bulk – either from a wholesaler or by using supermarket multipacks or two-for-one offers. And if you're insisting on a holiday, remember what a beautiful country you live in!

So the sequence is: accept, calculate, consolidate, economise. You have to change your mindset completely, and accept that your recovery will take time and that these seemingly small savings will, over several years, lead to a new start. You won't have to change your lifestyle too much, just do the same things in a different way.