WILL the £5bn which we splashed on new year sales – supposedly to beat the hike in VAT to 20 per cent on January 4 – come to be seen as the highwater mark of our financial recklessness, before the bills arrived in 2011?

The signs are ominous.

Consumers start the new year with credit card debt totalling £2.05bn.

Monthly payments on credit cards from the start of February could be £150m higher as a result of this latest burst of spending.

Housing charity Shelter said this week that more than two million people have already used credit cards to pay monthly mortgage or rent payments, which could threaten their homes in the event of illness or unemployment.

At The Money Advice Trust (MAT), the charity working to improve the quality of personal financial advice through free services such as the Consumer Credit Counselling Service, National Debtline, Payplan and My Money Steps, there are fears 2011-12 could see record numbers in distress.

After our spending spree, the double whammy of rising interest rates and rising unemployment, notably in the public sector, could be a deadly cocktail.

MAT chief executive Joanna Elson says: “In 2010, one in every 33 adults sought advice from charities such as Citizens Advice and National Debtline – a total of 1.4 million people. Our research suggests a two per cent rise in unemployment, which has been independently forecast, will lead to a record level of demand for debt advice at a time when local councils are likely to cut funding for it, and the funding from the Government’s Financial Inclusion Fund will also come to an end.”

So how can families survive the squeeze? Firstly, they must acknowledge the problem.

According to finance website moneysupermarket.com, more than a third of Britons worry about their current or future financial situation on a daily basis.

Kevin Mountford, the website's head of banking, says: “It is worrying that so many people feel their finances are out of control and they don’t want to take a little time to put things right.

“People may feel pressured to ‘keep up with the Joneses’ but, coupled with inertia and lack of understanding, these forces ensure that many people scared about their finances don’t actually do anything about it.”

A survey from insurer Scottish Provident says Britons only regard themselves in serious financial difficulty when their personal debts top £15,800. Among 18 to 34-yearolds, that figure rises to £16,650.

The survey found the highest '’regional debt threshold’ is in the West Midlands, where personal debts can go as high as £17,100 before they trigger concern. The Yorkshire and Humberside region has the lowest tolerance, with a figure of £13,459.

The Money Advice Trust’s top ten tips are:

● Don’t ignore the problem – the sooner you get advice about debts, the easier it will be to deal with them;

● Get free advice – think carefully before using a feecharging advisor when free, independent help is available;

● Don’t borrow money to pay off debts without thinking carefully – always take advice before making this step;

● If you have lost your job, or are off work because of illness check if your payments are covered by payment protection insurance. Read the small print of policies;

● Claim all the benefits you can – go to direct.gov.uk and look at the money, tax and benefits section. Also visit turn2us.org.uk;

● Work out a budget to decide how much you can put towards repaying debts. A money advisor can help construct a budget, or visit mymoneysteps.org; ● Find the best option for dealing with debts – a money advisor can identify the options and their implications

● Tackle priority debts first – some are more important than others. For example, if you fall behind on mortgage payments you could lose your home;

● Take action fast – after you have decided your route back to financial health;

● Don’t struggle on your own – free, independent advice is available from various organisations.

What is clear is that anyone feeling pressure on their finances should already be looking at firms which provide help for nothing, and those who charge.

Unofficial estimates suggest that more than 1.7 million households could seek outside help this year – getting on for triple the total of five years ago.