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FINALLY KNUCKLING DOWN AND DOING WHAT A LOT OF US SPEND OUR LIVES BODY SWERVING, DAWN KOFIE GETS TO GRIPS WITH HER FINANCES

AER, stocks and shares, ISAs, premium bonds, tax, investments, endowments and pensions - phew!

I know enough about a few of these things to get by, but even if they jumped up and sank their teeth into my well-proportioned arse, the majority would still be a mystery to me. I don't know about you, but I've always been completely and utterly baffled by money management (not that I've ever had enough cash that it needed management -more like conservation).

Consequently I'm crap with money. Not in a 129 credit cards, 38 store cards, hiding from (former) friends, family and knuckle dragging bailiff-types kind of way. I'm more your 'I'm pretty skint and it's still two weeks to pay day, bloody hell where has all my money gone?' kind of lady. I feel mildly envious of people who see saving as a sensible and positive thing (rather than viewing it as something which reduces your disposable income and is therefore a low-fun activity).

I'm not alone. According to the Liberal Democrats, Britons will have built up £1,000 billion of outstanding debt by the summer. So basically, by the time the season of sunshine and looking for pubs with beer gardens is upon us, we'll collectively owe a trillion pounds through mortgages, loan overdrafts, credit cards and hire purchase agreements. Obviously it doesn't help that most financial organisations encourage us to borrow more and more by making it pretty easy to do so, and don't always give us enough information to make informed decisions.

In an effort to conquer my fear of all things financial, I decided to take action. I bought a copy of Alvin Hall's Your Money or Your Life. For those of you unacquainted with the lovely Mr Hall; he's a cheery, bespectacled American who had a series on TV which, as its name suggests, centred on sorting out the finances of hapless members of the public. The main protagonists were usually big spenders in thousands of pounds worth of debt. Alvin would gently show them the error of their monetary ways and they'd live happily (and a damn sight more financially secure) ever after. The book is based on TV programme, but would it work for me?

The first thing Alvin gets you to do is write down what you spend in a month. Absolutely everything. All the groceries, toiletries, birthday presents, cheeky pints after work etc. Everything. What you did during the day (briefly) and even how you felt when you spent money. The reasoning behind this is that it gives you a real and accurate sample of what you spend your money on. This alone made me want to deposit the whole enterprise in the same place as getting fit, and learning another language - in my 'something to do when I've got the time file.'

Initially writing down everything I spent was a chore. But after a while I got used to it and, I'm ashamed to admit, even felt a little bit triumphant if I hadn't gone buying crazy. So where does my money go?

My diary revealed that I appear to be an all or nothing kind of spender. A couple of bus fares, a sandwich and a banana one day, and a none-too-cheap meal, booze and taxi home kind of night out the next. I also eat a lot more Chinese takeaways than I've ever realised and I tend to over indulge retail therapy when I'm royally hacked off.

Feeling quite proud of myself, I moved onto the next stage which is creating a one-month financial record. This is an analysis of how you spend your money based on the diary entries. You look at your incomings and your outgoings, and figure out how much of your total income is spent on: housing, food, transport, essential things and naughty impulse buys etc. Then you think about whether this breakdown reflects the things that are really important to you (like yeah, totally man), and after that you decide whether you'll be able to make changes. This sounds pretty gruelling, and you'll not be surprised to find out that it was. It meant scrutinising my spending in painful detail. All this forms the basis of a budget that will help me to, in Alvin's words: 'improve your financial habits and monetary status over the next year.'

And so on to the budget. This is based on the month record and involves: a plan for saving (roughly stashing away about 10% of your income), trimming the costs that you can't do an awful lot to change (rent, bills etc) and getting on top of the stuff that you have a bit more control over (clothes, eating out, socialising etc). This required a fair amount of concentration, a hefty dose of honesty and an evening tussling with a calculator, but I got there in the end.

I'm now a month into my newly ‘budgetised' life, and I've done not too badly if I do say so myself. Don't get me wrong, it's early days and I've fallen off the financial wagon and made a couple of impulse purchases. But, thanks to Big Al, I'm the proud owner of a savings account with something in it, and the thought of checking my balance at the cashline no longer makes me feel a little bit ill.

Alvin Hall - Your Money or Your Life

2002 Coronet Books £6.99

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