How to survive an economic slowdown
By Fergal Barry-Murphy Leave a Comment
Despite some positive signs towards the end of last year, it seems that the current economic downturn is still some way from running its course. This means that all of us will have to be a bit more careful with our spending. However, there are some steps you can take to help you maintain your standard of living.
Economic problems are a little like buses, the all tend to come at once. Record oil prices; turbulent stock markets; a weak Sterling; falling house prices and a number of other factors have combined to make the first three months of 2008 pretty bleak from an economic point of view.
There are also a number of other contributing factors. The cost of food and utilities is on the rise, and council tax increases will do little to ease the financial burden for many people.
In general, the British economy is experiencing a dramatic slowdown with employers’ organisation the CBI this week predicting a growth rate of just 1.8% this year, and 1.7% this year.
There is no doubt that the outlook is a bit gloomy for the next year or two but the majority of people should be able to see out the current economic downturn without too much discomfort. After the prosperity and property prices increase of the 1990s and the first half of this decade, many people are in a strong financial position.
However, if you have high borrowings and you are beginning to feel the pinch, now may be the time to start assessing your finances in more detail to see where you can cut back on spending. The smart money at the moment is going towards paying off debts and into secure saving accounts.
Also, there are countless ways to cut back on day-to-day spending. Look back on our features over the past year and you will find plenty of suggestions on how to save cash. Very often, if you look closely at your utilities, your insurance costs and your day to day spending you will very often find that you can save significant amounts of money quite easily.
Why not start by cutting up one of those credit cards; or joining the frequent flyer clubs of the airlines you use the most; or start looking for more bargains online. While the cost of food is going up, clothes and other items such as electrical items can now be had for bargain prices.
Of course, it is also possible to ease the pressure by searching for cheaper forms of credit. For example, if you have a number of high interest debts such as credit cards and hire purchases you should think about consolidating them all into one low-interest debt. Or, if you feel you are not getting the most from your mortgage you may want to consider remortgaging.
The recent credit crunch means that it is now much harder to get loans so you need to ensure that your credit rating stays spotless. Make sure that repayments on existing loans are all repaid on time and that you keep up with all your bills and utilities.
A steady income and a good credit rating will significantly boost the chances of you getting a good, cheap loan or mortgage. So, check your credit rating regularly.
In general, the secret to surviving the current economic downturn is to be careful with your money and investments. Now is not a time for heavy spending and high risks, but caution and savings.
