Other small investments that pay big include shiny new switch covers (less than $1 each), shelves, a birdhouse, new doorknobs, new light fixtures, curtains, new rocks or wood chips on outdoor paths, new faucets, new woodstain on decks, and general cleaning. Stand in front of house and imagine what it might look like with various small improvements (flowers, wood-rail fence, birdbath, etc.).

The Big Fixes

Obviously, there are things that just have to be repaired. The basic systems must function. Improvements, though, should be subject to three-to-one rule. You may have to get creative here. An investor friend of mine once had a wall put up, and for less than $1000 created a new bedroom, probably raising value of house by $8,000. Now that's a good return on investment.

Bathrooms and kitchens are important. A $1000 updating of a bathroom can add $4000 in value to a home. Spend $2000 wisely in kitchen (New fridge, re-finish cupboards, add a garbage disposal, etc.), and you can add $8000 to sales price of house. Look for changes which are most universally valued (don't paint kitchen pink because YOU like that color), and be sure you get a decent return on investment.

Depending on fixer-upper, there are many potential improvements that can be worth doing. These include adding a carport, new doors, fences, gazebos, sheds, painting, carpet, benches, a new closet, a new toilet, a new stove, a shower/tub surround, and trees or bushes. The bottom line is bottom line: be sure anything you do returns more than you spend, preferably three times as much.

Independent financial adviser, Alan Steele commented, “Debt has always been a problem for a minority of people. One of current problems is willingness of bank managers to hand out loans and credit cards, which means this minority has increased, but majority are coping with their debt.”

It remains to be seen whether nation’s optimistic mood, recently reflected in a Mori survey carried out for Prudential, in its ability to cope with levels of personal debt is long or short term. The report showed consumers are still failing to save, with one in five people saying they had no plans to increase amount they put away.

Jackie Ronson, of Prudential ( http://www.prudential.com/ ), said that many people are viewing their disposable income as decreasing, and yet they are happy to maintain their current level of debt, "add to that continued concern about pensions in UK, and we are looking at people who are likely to seriously struggle in retirement."

Additional Resources Scotsman ( http://business.scotsman.com/ ) BBC ( http://news.bbc.co.uk/1/hi/business/ )