The total amount of debt owed by Britons has fallen for the first time in 16 years – down by £635 million in July, to £1.46 trillion. This is undoubtedly a good thing overall, since it means that people are getting their finances in order and clearing debts rather than building them up.

The biggest fall (£418m) is, of course, from mortgages as the reduction in interest rates meaning that from no change in payments a significantly larger proportion of the capital is repayed. Credit card borrowing, however, rose by £92m, but overall consumer credit dropped by £200m.

I think that the more debt is reduced, the better. We should not live our lives on credit. That is what caused this recession – too much lending and borrowing by people who couldn’t afford it. Being in significant debt – apart from a mortgage – should be regarded as a bad thing.

Until we have a proper, adult, relationship with money and spend only what we have and can afford to, credit crunches like these are going to happen again.