The credit crunch has led more Brits to take extra control of their finances, as one in five of us are now setting ourselves a budget so we can worry less about debt.

According to PayPal, although many of us are now creating a credit crunch budget plan, it seems as though we may be making unrealistic expectations, as 20% still dip into savings or use credit cards to fund day-to-day living expenses.

Carl Scheible, managing director of PayPal UK, said: “It’s concerning that so many people claim to keep to their budget, yet still rely on credit cards or savings for basic living costs. The consequences of this kind of strategy are soaring credit card bills and no savings to fall back on, which is dangerous territory.”