Money worries keep many people awake, but there are answers.

Is Baycorp on your back? Do you know you need to take charge of your KiwiSaver or shop around for insurance? Do you wonder how you're going to pay the school fees? Or do you simply want to get mortgage-free faster?

I read that as many as half of us wake up at night worrying about money. Of course, surveys can always be found to back up whatever you want to say. Nonetheless, financial worries can be debilitating and really do keep people up at night.

What's more, Harvard economist Sendhil Mullainathanfor found that people's horizons close in on them and their IQ drops when they're worrying about money, making answers harder to find.

In the book Scarcity, Mullainathanfor and Princeton University psychologist Eldar Shafir outlined research in which they found that financial worries stole people's mental capacity in the same way, for example, that hunger does.

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It makes sense. Perfectly intelligent people who know better keep spending frivolously, or fail to make minimum payments, when they have money worries. They have the intelligence to climb out of the quagmire, but stay frozen in the headlights of financial disaster.

Financial educator and author Lisa Dudson has seen this IQ dropping phenomenon herself over more than 20 years in personal financial.

"Financial stress creates havoc in people's lives. Often they are doing dumb [stuff] so they don't have to deal with the financial problem."

I watched a friend being chased by his credit card provider and threatened with being "Baycorped". It's debilitating and there seems no way out when you don't have the money to make Monday's payment. In that situation, human nature is to do nothing.

But crisis-level problems such as this need to be front-footed. Being proactive with creditors will usually result in some breathing space.

Self help

Useful templates can be found online and in books such as Dudson's Get Your Head Out Of The $and, and plenty of other titles tell you how to do it. Or Sorted.org.nz's debt calculator works well for some people.

These books really can help. Dudson cites the case of a single mother who bought her book and turned her financial life around, from being $60,000 in debt to having a $70,000 house deposit up her sleeve.

"She was one of the most inspirational people I have met," Dudson says. "She came from a family where no-one had any money and everyone was in debt."

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Some people want a magic bullet and climbing out of whatever's keeping them up at night can seem impossible. A few bucks here and there when you're tens of thousands of dollars over your head must seem like it's going to get you nowhere.

But I always remember the reality TV show Money Man. Some of the people on the show had more debt than their annual income. It seemed impossible that they would rise above that debt.

Perfectly intelligent people who know better, keep spending frivolously, or fail to make minimum payments, when they have money worries.

Dudson, the financial adviser to the programme, said that in every case, show participants spent $400 to $700 more than they thought each month. Those who took the medicine were able to divert this decent chunk of money towards repayment and by the second series many had made serious inroads into their debt.

As well as the $400 to $700 of unnecessary spending on everything from lollies from the service station to mag wheels, many were able to save more money by shopping around for cheaper internet, insurance, mortgage and so on.

Once people have a "why", they can sometimes get themselves out of their situation one step at a time, Dudson says. Get Your Head Out Of The $and contained worksheets for readers to create their own financial plan.

Personal trainers

A book doesn't work for everyone. I'm always really hesitant to recommend financial "personal trainers".

They charge money, sometimes lots of it, for basic advice and they have a vested interest in switching your mortgage and insurance to get a cut of commission.

But such coaches exist and their systems have worked for clients who see the fees in the bigger picture of being able to sleep at night.

There are other options for the hand-holding needed. Sometimes a one-off consultation with an adviser can help you sift through all the conflicting advice and thoughts from friends and family who can't divorce themselves from their own situation and view yours objectively.

The solution to that is to take up some of the perfectly good free coaching from budgeting services as well as organisations such as Christians Against Poverty and credit unions.

Many deal with surprisingly well-heeled clients who no-one in their neighbourhood would ever expect to be in the financial proverbial. To their neighbours, they appear to be doing well - although that outward display of success might be the problem.

The solutions provided by these free services are often not much different to the expensive branded get-out-of-debt solutions.

Whether they're free, paid for or out of a book, what all of these systems do is allow you to write down and quantify your actual position, which is the first step to sleeping at night. The devil you know is always better than the devil you don't.

CreditUnions

Credit unions are often overlooked by people who want to get financially fit or pay off their debt.

Each credit union's service differs, but many have full-time financial coaches on their staff, says Henry Lynch, chief executive of Co-op Money NZ, the trade association for credit unions and mutual building societies in New Zealand.

These coaches will help analyse the member's financial situation, reorganise bank accounts and create a plan.

They don't just help families on the breadline. Many middle-income people have benefited from this coaching. They may have a business failure under their belt, or they've bought too many appliances on zero-interest finance deals and forgotten about the interest kicking in, or they want to pay the mortgage off faster.

Make a plan

The common theme in financial coaching is to list all debts, look for ways to make savings in existing outgoings, and reorganising bank accounts. Instead of having one account for all your money, set up three or four accounts, or "wallets". One is for bills, one for savings or debt repayment, possibly another for food and the final one with what's left over only for discretionary spending.

Like the weekly Weight Watchers meeting, coaches provide accountability, which leads to a greater chance of success.

Finally, one drastic way out of all these problems is to go bankrupt or use the No Asset Procedure. These two types of personal insolvencies wipe most debt clean, but aren't necessarily get-out-of-jail-free cards.

Bankruptcy can limit your lifestyle in many ways, such as stopping you moving overseas and making it very hard to get credit even after you're discharged. What's more, it doesn't necessarily solve problems that can only be fixed by changing your behaviour.