 As debt levels soar and bankruptcies and repossessions rise, Jane Hall speaks to a woman with a mission to get everyone back in the black. Seven years ago Diane Cossie's life was in financial turmoil. She owed a massive £25,000 on five credit cards and wasn't even treading water as she struggled to keep up the crippling monthly re-payments. Yet the 43-year-old is now debt and mortgage-free - and has the luxury of deciding how she is going to spend her hard-earned cash. Her escape from the debt problems which will cast a shadow over the lives of half of Britain's households this year, is an inspiring story. And it's one which Diane hopes will help others. "It got to the point where I was covering minimum payments only," recalls Diane. "It didn't happen overnight. A lot of the problem was to do with the seasonal nature of the conservatory business my husband runs, then there was the added pressure of having a child, holidays and things like Christmas and birthdays. "It was a case of padding the spending out with credit cards. After three or four years I ended up in a situation where I had five credit cards, with £9,500 owing on one, and debts totalling £25,000. "I was starting to get behind on the payments. I was worried sick, so I rang the card firms to ask if I could come to some agreement with them and they said `No,' which was brilliant. I hadn't been asking not to pay, just to come to some understanding to ease the situation. "One of the problems is you lose all sense of where to turn next. If you have debt and are passing it from one card to another, or taking out consolidation loans, you feel that wherever you turn it's all about borrowing money. "I began to read books on debt in the hope they would help me but found them all useless. Not one explained what I had to do to reverse the trend." Finding herself spending ever-increasing amounts of money she didn't have, Diane finally mustered the courage to tell herself "enough is enough", and decided to see if she could come up with her own plan to tackle her debt mountain. "I thought, `I'm actually a financially astute person in business, so what will happen if I put that into play in the home?'" Diane, who lives in Shrewsbury, Shropshire, with husband, Peter, 47, and has a 24-year-old married daughter, Gemma, started by cutting up all her credit and store cards, retaining just one debit card. Then the distributor for Utility Warehouse - which provides customers with savings on their home, office and mobile phone charges as well as on services such as gas and electricity - sat down to look at where her money was going each month. "This was an eye-opener because I'd never really bothered. I bought shoes and clothes and if I was a bit short of cash one month, it all went on a credit card," she says. Once she began regularly writing down where her money went, she noticed she was starting to become more careful. She then worked out where she would be if all she had to bother about was food and utilities. Next Diane looked at her credit card statements and discovered that a simple adaptation of the `snowballing reduction technique', that works by focusing on one debt at a time until it's gone, would mean she would fairly quickly be rid of all her debts. "I'm good at maths and started playing around with some figures, and thought how a 10% saving can be very powerful," she explains. By following her own advice, Diane turned her life around in just three years - and claims others can do the same without having to resort to hiring expensive debt managers. She has set up Control Freak and, with a lot of tweaking has made her "recipe for freedom from debt" available to everyone in a 40-page work book downloadable from her website for £4.99. It is not a profit-making venture. Diane is driven by nothing more than a "passion to get as many people out there as possible to see the way forward. I wish I'd had Control Freak to help me in the beginning. It took me three years to find a method that worked for me; it was such a long, drawn-out process. "A life without credit cards and debts may seem impossible for most people, but I can demonstrate that it is not only possible but reality for an increasing number of people who are willing to follow some simple rules." Personal debt is currently at its highest level ever at £1.3trillion - and it shows every sign of increasing. For young people, the cost of owning their first home is around £140,000, students graduate owing around £12,000, while average consumer debt is running at more than £20,000 per household. Britain also holds the unenviable record of owing 75% of Europe's total credit card debt, while the pension crisis is becoming a real worry for anyone over the age of 25. On the back of this, insolvencies have soared. Latest figures show 20,461 people in England and Wales became insolvent during the last quarter of 2005 - 15% more than during the previous three months, and the highest figure since records began in the 1960s. During the period, 13,501 people went bankrupt - nearly 11% more than in the three months to the end of September and 57% higher than the figure for the same period in 2004, according to the Insolvency Service. Diane, who is determined to never again owe money, is angry that the Government appears to be doing little to halt the escalating debt crisis. She believes education is the key and would like to see her plan used in schools. "If we could get people young enough then there wouldn't be the huge debt problem we have in the UK. And without these debts people will have more money to spend as they please and when they please and, as a result, the country's economy will benefit. "We'll all be better off. It's simple economics." Diane continues: "My plan is a whole way of looking at debt which is the reverse of what people do now. Our parents' generation only bought when they had the money, but my generation was the first to get credit cards. It is now all about keeping up with the Joneses. "People underestimate by £350 a month how much they spend on credit cards. They aren't `buying' anymore. They don't see it as real money. But it is money that should be going into some future fund to protect them. "It is almost impossible to build future wealth on borrowed money. Even if you have a mortgage, you are not debt-free." Diane admits there are some powerful forces at work encouraging us to spend. "TV is a powerful advertising medium that constantly suggests lifestyle is attributed to a credit card - and you would have to be made of steel not to be open to it. "But think about it: a `buy now, pay later' deal may seem like the perfect solution. The easy £30 per month payment deal draws you in, but you need to retrain your thinking to multiply that £30 easy monthly payment by how many payments you need to make. "For example, `computer, printer and digital camera, sale price £1,000' - 30 easy monthly payments, £59 per month. With a 0% deposit and a special high interest tagged on, you are looking at a total repayment of £1,770. That's an extra £770 on the price. "One of the problems is we have all become so used to buying now, paying later, that we have become very bad role models for the younger generation. They now think this is the way to live - but it doesn't have to be like that." * You can download Control Freak for £4.99 on www.controlfreakltd.co.uk or buy the printed version for £50. Diane Cossie's words of wisdom * If you really want to be debt-free in as little time as possible, the very first thing you need to do is stop adding more to the debt. Cut up all but one credit card and use it for emergencies only (a new pair of shoes is never an emergency!). * Do not accept that your food bill is `essentials' only. I would guess that every week you fill at least one rubbish bag with uneaten food. * You have just thrown valuable freedom payment money away. Always make a list - and stick to it. * Shop around for household goods at retail park stores. Make use of the bigger pack buys - especially toilet roll, dishwasher tablets and washing powder. * Cleaning products, shampoos, vitamins, biscuits etc, are often at least £1 less per item in these stores. * Try out your local markets, farm shops, local butchers, wholesale meat places. * All challenge the `one-stop shop' but most of them offer quality products at reduced costs. * Do you shop at a supermarket each week, obtain a reduced fuel voucher at the end of your till roll, drive off and never use it? * Are you mad? Americans love discount vouchers. * It must be an exclusive world- wide club - that the typical British attitude is that you must pay full price. * Why? To show you are rich to the attendant at the shop? Start using your discount on fuel vouchers. * For most people, this is the strangest thought. How on earth can anyone `pay off' the mortgage faster? No one else does, do they? * You need to contact your mortgage holder directly and ask for specific instructions on how to make additional capital repayments along with your regular monthly payment. * Do you need a £2 cup of coffee every morning? In fact, do you ever need to pay £2 for a coffee at anytime? * Do you really need that subscription to Fly Swat Weekly - just because you have every copy since it began and, maybe if you collect each copy, you will have a priceless collection to go to auction some day and sell for at least £100 or so. * We did not know back in the 50s and 60s the effects of smoking - it was cool. We know now it can kill. * You actually burn money in the process - what are you thinking? * Have you by any chance seen George at Asda, Matalan, TK Maxx, TJ Hughes, Peacocks, Tesco, Primark, New Look etc? * If you haven't, you are missing out. * They have all heralded the way for incredible, inexpensive, fashionable clothes. | 
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