A former dotcom worker who has lost control of his credit card is now a typical client of a low-profile financial advisory service run by the State, writes Ed Power.

Phelim was addicted to overpriced tat. Each Saturday he hit the shops, credit card primed, and splurged with abandon. Video games, DVDs, designer trainers - if it was expensive and gimmicky, he wanted one.

As a computer programmer earning a generous salary, Phelim considered himself immune to financial vicissitude. He was young, talented and affluent - the Celtic tiger embodied. Why shouldn't he blow as much of his pay packet as he saw fit?

And then, abruptly, the bottom dropped out of the dotcom sector and Phelim lost his job. He secured some freelance consultancy work, but not nearly enough to fuel his weekly sprees.

Instead of spending less, however, he began to fritter away more and more. Shopping became a panacea, a means of banishing his worsening career blues.

Within months, he had overrun his credit card limit and drawn up substantial debts. Phelim eventually found another full-time position - by then, unfortunately, unemployment was the least of his worries. Creditors' letters cluttered his post box. He was forced to cadge rent money from friends. When bailiffs threatened to reclaim his wide-screen television, Phelim realised it was time to seek help.

At his parents' behest, Phelim made an appointment with a financial counsellor from the Money Advice and Budgetary Service (MABS). Established by the Department of Social Welfare in 1992 on foot of a Combat Poverty Agency report, MABS was conceived as a support service for those who had become ensnared by illicit moneylenders. Over recent years, however, its role has changed radically. The organisation, which has branches throughout the State, is increasingly called on to help couples unable to keep pace with mortgage repayments and ostensibly wealthy twentysomethings such as Phelim who have been seduced by the burgeoning availability of cheap credit.

His predicament is a familiar one to Helen Brady, a MABS adviser based in Arklow, Co Wicklow.

Since the late 1990s, Brady has witnessed a significant shift in the public's spending habits. More and more, we buy according to whim with little thought for the long-term consequences. This trend has been matched by a growing readiness on the part of lending institutions to dispense loans with scant regard for customers' ability to pay. Ironically, it is those whom MABS was first set up to help who have proved less prone to this widening financial malaise, Brady says.

"The poor know the value of money all too well. It is the middle-class people, who have never really had to worry about their incomes, that are now seeking the advice of MABS in greater numbers than ever before."

THE advisory service does not offer pecuniary support. Rather, it encourages individuals to scrutinise their weekly spending and trim non-essentials. Where possible, the agency negotiates truces with banks and building societies and arranges a restructuring of payments.

Adopting the logic that it is better to receive some recompense than none at all, many lenders are glad to compromise. Some are less willing to call off the hounds however, according to Brady.

"Banks and building societies have become more aware of who we are, and they often regard our intervention as a welcome development. But credit card companies - which frequently charge the highest interest rates of all - are typically less amenable to reaching some sort of compromise."

With more and more people falling into debt, MABS admits it often struggles to cope with demand. Deliberately low key, the service would probably be overwhelmed if its existence became widely known, says Brady. And anyone considering seeking the bureau's help should not expect miracles, she cautions.

"Some people who come to us are disappointed because they think we can wave a magic wand and make everything go away. It's not like that. We preach prudence and try to teach people to go without things they simply cannot afford.

"Many have never before been shown how to budget. The simple act of setting down their outgoings on paper can have a startling effect on their attitude to money."

It is a philosophy to which Phelim will now wholeheartedly subscribe. After meeting a MABS adviser, he agreed to forgo his credit card, rein in his costly social life and resist his craving for video games and DVDs.

Eighteen months later, he is still struggling to clear his bills, but he can at least envisage a future that will be free of debt.

"I'm not floundering under this massive weight any more. I can see the light at the end of the tunnel.

"MABS taught me to prioritise my spending and cut down on luxuries. Now I can foresee a time where I might actually be able to set some money aside for a rainy day. For me, that is a huge step forward. I feel like an addict who has been cured."