Money Saving Tips for Surviving this Recession
Technically we are told by the government that we are in a recession when we have two quarters of negative growth in our economy. Mervyn King the Governor of the Bank of England has just admitted that we are entering a recession. It’s funny that most of us have known for the last six months that we are in a recession. The experts are only just discovering what’s happening they seem to be blinded by the reality of the real situation around them.
All the experts are now giving us their opinions; some say it will be a short recession; whilst others declare a deep and long recession. I remember all the experts giving us their predictions for when the property bubble would burst and none of them really had a clue or even got it right. So I am taking no chances on all the new experts who will be rushing forward to give us their expert opinion
The last recession was back in 1992 some sixteen years ago. It was never on this magnitude with governments having to bail-out their respective Banking systems in order to bring back confidence. Who would have thought that well established investment banks that were founded during the Great Depression of 1929 and ordinary banks would have gone bust and other banks would have ended up being rescued by their respective governments. Governments around the world have stepped into the arena to help. They have invested hundreds of billions of pounds into their own banking systems.
Budget your Finance - So your debts don't spiral out of control!
The recession has officially arrived, here are eleven steps you can take to protect yourself and your finances.
- Budgeting - Now’s a great time to sit down and write out all of your monthly costs and evaluate them. Get rid of anything that you are paying for that is a waste of money or is no longer needed. Check all your direct debits and standing orders on your bank account. You would be surprised how many people are paying money out each month on direct debits and standing orders that they should have cancelled a long time ago.
- Savings- Don’t invest your hard earned savings in foreign banks just because they have fantastic interest rates. Find out what their deposit protection is for non-residence first. For example the Channel Islands of Jersey and Guernsey do not offer any deposit protection. You are covered by the Financial Services Compensation Scheme (FSCS) in any UK bank up to £50,000 per customer per bank. Should you have more than £50,000 it is a good idea to spread your money around the UK banks. Be careful not to open two accounts in the same bank or two banks that are part of the same group as you may not be covered.
- Insurance Protection – During these times of economic uncertainty you have a greater need for unemployment, sickness and accident Insurance protection more than at any other time. Most of us have mortgages, loans, credit cards, utility bills and everyday expenses that would need to be paid if we were to lose our jobs through a redundancy, become ill or suffer an injury and be unable to work for a while. With household budgets already stretched you should seriously think about an Accident, Sickness and Unemployment protection policy.
- Benefits- are you claiming all your entitlements? Like Working Tax, Child Tax credits, Child Benefits, Childrens Tax Credits, etc. Every penny counts when times are tight
- Replacing your car – If you don’t buy a new car this year or next year you will save money on the monthly repayments that you would have paid for a new car. All cars lose 45% to 55% of their value within three years of ownership. So by keeping your old car you will reduce the amount of money you would lose in depreciation against the amount you would lose on a brand new car. Why not consider a car share to save on costs and there are a number of websites offering to put you in touch with other car drivers in your area.
- Debts – If you are currently struggling with debts then facing up to your problems is certainly one of the first steps. Your next step is to speak to a Debt Management organisation that is charity run like Consumer Credit Counselling Services (CCCS) or the National Debtline or you can always contact Citizens advice.
- Switch Gas and Electricity suppliers – It is important that you do a Gas and Electricity comparison on one of the comparison websites. Then when you know who has the cheapest Gas and Electricity supply for you then go to TopCashBack website where they will give you up to £75 for signing up through their website for your dual utility package. You should also check your Car Insurance, Buildings and Contents Insurance in the same way as your gas and electricity.
- Borrowings - Under no circumstances should you take out any further loans or credit cards to help pay your monthly mortgage, loan or credit card payments. The latest statistics suggest that a million people are using their credit cards to help supplement their monthly mortgage and living expenses. The cost of borrowing for loans and credit cards is expensive and it will only make your situation worse. If you should decide to arrange a loan and credit card consolidation within a secured homeowner loan, you will be securing an unsecured debt on your home.
- Home in Negative Equity– If you are one of the unlucky homeowners to have a home in negative equity then please remember you are only in negative equity if you sell your home and move. If you stay in your home and ride out the recession you are likely to pay off some of the capital over the next few years and you will probably see house prices improve. It happened like that back in the 1980’s when a house in negative equity, costing £20,000 then is now worth around £140,000.
- Remortgaging - Remortgage to the best interest rate available for your current circumstances at the end of a mortgage deal. Contact a mortgage advisor that offers mortgages from the whole of the mortgage market as they will find you the best mortgage product available for your requirements. Beware of the mortgage advisors that use a panel of lenders they will only offer you the best mortgage product from their panel of lenders. This could cost you thousands of pounds over the term of the mortgage rate compared with the best mortgage rate had you had it from the whole of the market. Do not just look for a quick mortgage, look for the right mortgage.
- Buy and Sell on eBay – Two years ago my youngest son aged 9 asked for a brand new Sony PSP and as a dutiful father my answer was no. So he disappeared and returned with a pile of toys, books and clothes in good condition and asked me to sell them for him so he could buy his Sony PSP for Christmas. Not to be left out my other son and my daughter did the same thing. We raised £910 and spent £620 on three brand new Sony PSP and games; I then added £10 to the £290 left over and gave my kids £100 cash for Christmas. They did not realise that they had paid for their Christmas present from their old presents and all it had cost me was the listing costs for eBay and £10.
These are just a few of the many survival points that will help you through this recession. Over the forthcoming months I will be providing more money saving tips and recession tips to surviving. Always make sure that you take professional advice before doing anything with your finances as each of us has different situations and circumstances. Your thoughts and comments are welcome. Just CLICK on the green coloured COMMENT bar below and Leave your thoughts or experiences today!
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Thank you for making my day lol. This is so funny
Can’t stress number 4 enough. My friends father had a triple bypass ten years ago and has struggled to walk too far. He’s just claimed for and been awarded £50 a week Attendance Allowance.
Two points about this..
1) He did not know about this because no one was forthcoming on the info. Even though he see’s doctors and “health care” officers regularly.
2) He’s lost circa 20k by not knowing and not claiming.
Check what you are entitled to people! You pay your taxes for these benefits.
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Dont forget the voucher sites for your additional savings.. especially when buying sale items
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