A fool and his money, as the saying goes, are soon parted (although I prefer James Van Den Bosch’s quip that ‘a fool and his money are some party’), but fools aren’t the only ones affected in this way. Many very intelligent people find themselves with financial problems, too. This is because your IQ has absolutely nothing to do with how well you manage your money. What is much more relevant is your attitude to the stuff, and your timing.

If you want to survive (and prosper) in the current climate then you need to focus on your personal finances. If you shudder at the thought, remember that the only boring thing about money is not having enough of it! One more thing before we look at how to transform your finances in 10 easy steps –  if you run a business, what holds for your personal finances holds for your corporate finances, too.

1) Get a plan, Stan (apologies to Paul Simon)

If you want to transform your finances, the first thing you need is a good financial plan. Set short, medium and long-term goals. These might be such things as ‘pay off all my debts’ or ‘sort out my retirement.’ You can’t go forward until you know what you want to achieve.

2) Stop digging

You can’t get out of a hole if you keep digging. If you have a financial problem – such as debt – then stop doing anything that might be making it worse.

3) Be patient

It is difficult to get rich quick, but very easy to do if you take it slowly. By the same token, you won’t solve any financial problem by being in a hurry.

4) Work out a budget

Budgeting has nothing to do with self-denial – it's simply about making a plan for how you will spend your money over a specific period. Start by working out your current position. Calculate your income and expenditure over a typical year (breaking it down month by month). Then draw up a list of your assets and liabilities.

5) Waste will seriously damage your wealth

For years, my children would roll their eyes when I went around the house switching off lights or complained when they were talking on the phone for too long. Eventually, they were convinced that what I was doing was worthwhile when I offered them a percentage of any utility bill savings we could make as a family. I reinforced the message by pointing out that everyone in the world – even Bill Gates – only ever has a finite amount of income and that, once you’ve spent it, you can’t get it back. Now, more than ever, you need to cut out all waste.

6) Shop well

No financial ill can befall anyone who shops carefully. Value for money means more than just the lowest price, but can include convenience, service, quality and speed of delivery. Don’t be afraid to negotiate and rejoice in the fact that the silver lining to our country’s woes is that there are some great deals to be had.

7) Cut the cost of your borrowing

If you can, consolidate all your debt into a single, less expensive loan and then pay it off as quickly as possible. If you can’t, hustle all your lenders until they give you a better rate and always pay the most expensive debt off first. The rate of interest you pay makes a huge difference. Don’t be complacent.

8) Aim for high returns and minimal risk

There are plenty of ways to make a high return on your investments without taking undue risk. The first secret is not to consider what the market is doing, and the second is not to chop and change your mind. Over the medium to long term the stock market has always (and I mean always) produced greater profits than anything else. Investors who split their money between shares and bonds and achieve average returns do better than almost everyone else. Check out Exchange Traded Funds (ETFs) as the low cost way to invest or the plethora of managed funds on offer with their easy-to-understand risk categories. Don’t waste money on unnecessary management fees.

9) Get protected at the right price

Review all your insurance. Have you got the cover you actually need? Could you switch providers and save? It is possible to make huge savings by reviewing your insurance (and other financial products) on a regular basis. For instance, did you know that if you have quit smoking over 12 months, you could be entitled to a 50% reduction in your life cover premiums?

10) Be optimistic

The economy is cyclical. Everyone is talking gloom, gloom, gloom now but in due course it will become boom, boom, boom again and when it does the canny will make a fortune. If you are entrepreneurial, the recession is your friend. The costs of starting and running a business are lower in real terms than they have been for over a decade. Suppliers, desperate for sales, are offering great deals and if you are happy to buy second-hand equipment there are amazing bargains to be had. Professional advisers are charging less and – crucially – there are plenty of skilled employees looking for work. Though the economy is now growing, the overhang of debt remains, but it is debt that can be managed, negotiated and resolved. Go with the flow and keep positive!

John Lowe is managing director of Providence Finance Services Limited trading as Money Doctor and based in Stillorgan Co Dublin. He is the author of Money Doctor 2015 (Gill & MacMillan €12.99). For consultations and seminars, T: +353 1 278 5555, e: jlowe@moneydoctor.ie or visit here www.moneydoctor.ie