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Here at thinkbanking, we like to help people manage their money well by budgeting for bills, debts and everyday living expenses. We're concerned by research suggesting that so many people in the UK are having problems with their personal finances.

A new quarterly report into consumer spending by consumer group Which? highlights the financial strain many people in the UK are under at the moment, and how it is affecting consumer spending power and standards of living.

People have suffered a decline in living standards as purchasing power has declined over the last year. This is partly owing to debt levels: it's reported that for every pound we earn, we owe 21p on average. This figure increases to 37p in the pound if you earn less than £12,376 per year, and 47p in the pound if you're aged between 18 and 29.

One major effect of the recession and these high levels of debt is that many people are budgeting wherever they can. More than half (57%) are cutting back on things like holidays and 56% are cutting back on socialising. Cutting back on non-essential spending like this can be a sensible move in tough economic times, but fully 43% of people say they'll cut back on their food bill in the months ahead.

The Which? research highlights that some people are turning to borrowing to make ends meet - 18% of people went into their authorised overdraft and 3% took out a payday loan in the last month alone. Around half of British consumers (48%) say they would struggle to cope with an unexpected expense.

A spokesperson for thinkmoney commented, "Budgeting to make ends meet can be a tiring exercise, but there is help available in the form of our budgeting bank account service, which can take out a lot of the hassle involved in budgeting for bills and regular expenses. This service is provided for a single monthly fee of £14.50 and an initial set-up fee of £25."

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