She has a £5,000 credit card debt from the Co-op and would like to know the cheapest way to pay off her debts Her lifestyle means she spends most of her income. She has a weakness for travel and last month was in Italy and Spain. But she is looking for ways to save money to provide security.Ms Baker wants to know how to raise the cash to do the improvements on her home and in the longer term she want advice on how to move up the property ladder and where to invest. Finally, Ms Baker wonders if she should take out life insurance.We put her case to Katja Mills, an adviser at Charcol, Philippa Gee, investment strategist at Torquil Clark, and Darryl Connor, associate sales director at Towry Law Financial Services.

‘Use the generous equity in your house and stay out of debt’Solution 1: PropertyMs Gee thinks that since there is plenty of equity left in Ms Baker’s house, she should consider extending the mortgage to help pay for the improvements. She could take out an advance with her existing lender or remortgage with another lender, depending on who offers the most competitive rate. Ms Gee says there are attractive fixed rates available.The credit card debt could also be added to the mortgage, to benefit from the lower interest rates. But after the debt is cleared, Ms Baker should make sure she stays in credit because she cannot simply keep increasing her mortgage.Another option, Ms Gee says, is to consider more flexible mortgage accounts, which can cover various products including mortgages, credit cards and savings account, such as the Virgin One account.Mr Connor says Ms Baker should contact her existing lender to see if there are special offers available. It is possible she could raise the necessary funds with only a slight increase in monthly payments.He also thinks Ms Baker should take independent mortgage advice. Transferring may include extra costs such as paying for a solicitor, valuation and local authority searches. But many companies are offering incentives to cover all or part of these.Ms Mills says Ms Baker should get advice on her insurance position about the asbestos.

She should also check the survey on her property when she bought it. There is a slim chance (depending on what type of survey she opted for, and other factors) that the surveyor may be liable, if the asbestos was not detected.Solution 2: SavingsMs Gee thinks Ms Baker’s £500 savings need to be increased to cover emergencies. One option would be to set up a cash Isa which would allow her to save up to £3,000 each tax year into a cash account and avoid tax on the interest. Cheltenham & Gloucester offers a rate of 4.25 per cent a year with a minimum deposit of £100.