Money Doctor Fergus Muirhead's top five tips for keeping your finances in good shape

The broadcaster and newspaper columnist, who has been helping people manage their money for decades, shares his advice for building a healthier financial future.

And nowhere is this old adage truer than in the way we deal with our money.

I’ve been helping people use their hard-earned cash more effectively for a few decades now and it still amazes me that the simplest actions are the ones we often forget.

So, here are my tips to help you avoid the major financial pitfalls, and start building towards a secure future for you and your loved ones.

1. Make a budget

Start by keeping a note of everything you spend for a period of at least one month. Be honest with yourself, you’re not doing this for your bank manager or your partner - you're doing it for you. Compare your spending with your income for the month. Which is greater? And remember that a budget is not about stopping you spending money, it's to help you use money more efficiently.

2. Make sure you and your family are protected

We don’t need insurance to deal with the chances of something bad happening, we need it to deal with the consequences of something happening. How would your family pay the bills if you died suddenly? How would you continue to pay your mortgage each month if you were diagnosed with a serious illness and were unable to work? Life assurance, income protection and critical illness cover are vital for anyone with a partner, a family, or a mortgage.

3. Don't compromise

Cheap is not always the same as good value, so don’t think you're necessarily saving by snapping up the lowest-cost option to save a few pounds here and there. Make sure you are paying as little as possible for all of the things you need to spend money on regularly, like cars, phone and broadband packages, computers, gas and electricity, but at the same time make sure what you're forking out for does exactly what you need it to.

4. Make plans for retirement long before it’s time to retire

There's always a reason to not start paying money into a pension - planning a family, buying a new house, or paying off debt. The younger you are when you start a pension the less it will cost you in the long run. On top of that it's a very tax efficient way to save money.

5. If you get into debt, talk to someone about it

It's very easy to borrow money these days and a change in circumstances or an increase in interest rates can also make it easy to fall behind with payments. If this happens to you, don’t bury your head in the sand and hope the problem will go away. If you ignore the payment demands, it won't. Call your creditors before the situation escalates. It is in their interest to find a solution for you.