Budgets are order of the day for Brits

People in Britain are fighting the credit crunch by returning to old-fashioned budgeting, a new poll has discovered.

According to PayPal, 57 per cent of respondents said they now budget more strictly than they did 12 months ago and 62 per cent review their finances monthly in order to keep on top of their expenses.

In addition, 15 per cent said they are not making long-term spending plans in a bid to conserve money amid the current economic difficulties.

However, 20 per cent said they are still having to rely on credit cards or savings to make ends meet at least once a quarter, which PayPal said could be because many people are not factoring in extras such as clothes and socialising.

Carl Scheible, managing director of PayPal UK, said that the findings are largely positive, but that people should be careful not to get into debt through over-reliance on credit cards.

"Households have seen their financial commitments change significantly over the last 12 months and with energy prices soaring, mortgage payments still high and the cost of food increasing at a record pace it is encouraging to see people reacting to this by trying to keep their financial house in better order," he remarked.

Last month, it was reported by Chelsea Building Society that almost 30 per cent of people feel unable to loan cash to family members due to strains on their own finances.