"But I've got debts"

Many readers will be holding a credit card balance, an overdraft or a loan while reading a book about saving. It's reasonable to ask whether saving makes any sense in that position. I'll give you the general reasoning as I understand it, and then I'll tell you where to get proper advice, because your own figures matter and I don't know them.

The general reasoning is about interest. A credit card or an overdraft usually charges a much higher rate than any savings account pays. If you hold a thousand pounds in savings and owe a thousand on a card, you're receiving a little on one and paying a lot on the other. On the arithmetic alone you'd be better off using the savings to clear the card. So the usual guidance is to clear expensive debts before building up savings beyond a small reserve. I'm giving that from general knowledge. I tried to check it against the MoneyHelper website for this book and couldn't get access to the pages, so please confirm it there yourself.

There are two common qualifications.

The first is the small reserve. Many advisers suggest keeping a modest cushion even while you pay down debt, and the reason is behavioural. If every spare pound goes to the card and then the washing machine breaks, it goes straight back on the card. You're in the same place, and discouraged as well. A few hundred pounds in a pot means that the next shock doesn't undo your progress. How much to keep is a matter of judgment. A figure you'll often see quoted for a full emergency fund is three months of essential outgoings. I haven't been able to source that for this book, and it's a long-term target, not a starting point. With expensive debts, something far smaller is what people usually mean.

The second is debts that don't behave like a credit card. A mortgage, a student loan in the UK system, and an interest-free deal each work differently, and the reasoning above doesn't apply to them in a simple way. Most people with a mortgage save at the same time, sensibly.

The method in this book works for debt just as it does for saving, and that matters more than any of these details. The leftover plan fails for debt repayment for exactly the reasons it fails for saving. If you've been paying the minimum on a card and intending to pay more out of what's left, you know this already. So pay the debt on payday. Set up a standing order for a fixed extra payment on the card, to go out the day your pay arrives, with a small transfer to the cushion alongside it. When the card is cleared, don't cancel the standing order. Redirect it to the pot. You've been living without that money for months, so you won't notice the difference.

I want to add three things to that.

Don't stop your workplace pension to free up money for savings or debts without taking advice. When you opt out, you usually give up your employer's contribution, which is money you'd get no other way. There can be situations where it's the right thing to do. It's not a decision to make from a self-help book.

If your debts are more than you can keep up with, the priority is advice and not a savings pot. That's the case if you're missing payments, or borrowing to pay for essentials, or getting letters that mention court. The NHS page on financial worries points to Citizens Advice, StepChange and National Debtline. They're free and they deal with this every day. Contact one of them this week.

And if your savings might affect benefits you receive, check the rules before you build them up. The government's Help to Save guidance notes, for example, that savings of six thousand pounds or less don't affect Universal Credit. Other benefits have their own rules, and an adviser can tell you where you stand.