Savings are being dipped into and debt is rising as incomes fall.
Debt levels are on the increase as people spend more this month.
Families are taking on more debt and spending their savings to meet their expenses in the run up to Christmas, according to Markit Research.
The Household Finance Index found that almost 30% of participants said that their finances worsened this month - only 7% said that their monetary positions had improved.
The research highlighted that spending increased despite a drop in incomes and a rise in job security worries. However, this came at the expense of a rise in debt and a fall in savings.