Top tips for Surviving a Recession.

Here are our top 10 tips for families surviving a recession;

1. Face your demons.  Don’t shove brown envelopes upopened in drawers, open, read, digest.  Pull them all together and look at them properly.  Sleepness nights and money worries frequently stem from panicing and worrying about the unknown.  So deal with facts, draw up a list, add them all up, look at the payment dates and the interest rates, and get a plan together on how to deal with them.
2. Make up a household budget, there are lots of sites that will help you here, particularly Money Saving Expert .  Go through all of the standing orders and direct debits and cancel any that you don’t think are really important right now.  Cancelling a few subscriptions etc could give you an extra £100 per month – that’s probably the equivalent value of the electricity bill.
3. Talk to an Independent financial advisor, particularly if your mortgage is reaching the end of a fixed or discounted period.  Talk to an independent financial advisor too if you are just worried.  Many people have endowments, and will be receiving scary letters telling them that the value of their endowment or pension has fallen, together with a valuation of what it’s worth if cashed in today.  The same thing applies here as with property, you don’t make any losses on shares until you cash them in.  If you’ve a pension, or a shares ISA with a lot of years left to run, then remember that you are currently a buyer.  And this is probably a very good period to be scooping up share units.  This month, your contribution will be buying 1/3 more units than it was last month.  If your pensions or endowment is due to mature within the next few months then talk to an Independent Financial advisor about your options.  There are lots of options and lots of financial products, so talk to someone with the right knowledge about them.  You should also talk to a financial advisor if you find that after you’ve drawn up your list of bills, and your budget you know that you’ve got a shortfall.  Don’t call some random number off the telly, talk to a proper financial independent advisor and they can pass you onto the right person to deal with your situation.
4. Don’t worry about your property’s value, as long as your mortgage payments are affordable, and you have no intentions of selling, declining property values have no real impact on you.  It’s scary to hear that property prices are falling by x%, but you don’t make a loss until you sell something, until then the valuation is just a theoretical number.  So don’t worry about it.
5. Be proactive.  Talk to your bank manager, or credit companies, electricity & gas companiesor anyone else that you have bills with that you think you can’t afford.  Talk to them before you can’t afford afford the payment, and this way you can avoid defaulting, which will help your credit rating going forward.
6. Be sensible.  Odd treats now and then are one of those things that we like to lift our souls.  But be sensible about the big expensive stuff.   Most people don’t really NEED a lot of the purchases that they make, but marketing, big companies, supermarkets etc lead us into thinking that we do.  Be aware of all those retail marketing tricks that are out there to seperate you from your money.  Our biggest recommendation is a simple one, don’t go shopping unless you need something.  Window shopping when you’re watching the pennies is not good for the spirit.
7. Don’t buy ahead for Christmas.  This applies to food, drink etc.   When you’re shopping at the supermarket don’t fall into their trap of buying things for Christmas early.  In lots of instances the sell by dates will have expired before the big day.  It leads people into over buying, it doesn’t seem much when you buy a few items each week for the next 9 weeks, but if you do that every week then you’ll end up with cupboard loads of food and drink that you’ll end up binging on, or throwing out after the festive period.  Instead, but the cash in a jam jar, or a seperate savings account, and the go out and buy what you need when you know exactly whose coming and where you’re going over the holidays.  It will also stop you eating it before Christmas, and then having to buy it all over again!
8. Do buy ahead for Christmas.  Buying a few Christmas presents every week can help spread the cost.  We recommend strongly though that you write a list of who you’ve got to buy for, and that you write next to it what you buy, and you keep this in your purse/wallet.  This way you know that you don’t end up buying twice for some people, and you avoid the “i’ll give this to someone, haven’t worked out who yet” situations.  Remember that everyone is facing the same pressures on their wallets and bank accounts, so probably friends and family would appreciate a sensible limit on christmas spending, you’ll not just be making it easier on yourself, but on them too.
9. Redundancy.  This is the big one that everyone fears, and it’s also the one that individuals have least control over.  If you have been working for your employer for more than 2 years then you should be entitled to a redundancy payment.  Redundancy deals can be negotiated, so don’t blindly accept the first offer.  Take advice from ACAS, its free, and it’s the most knowledgable source for employment advice.  Bear redundancy in mind if you are changing jobs, realise that as last in you are likely to be first out, and that you are likely to get no redundancy payment.  Read your contracts and find out what provisions etc are made.  Redundancy can have huge implications for your family, but face them with your eyes open.  If you have an income protection policy look it out and find out how long it is before you can receive any benefit, contact anyone that you have trouble paying and explain that in a few weeks time you will be better placed to pay the bills.   If you don’t have any such cover then your employer may provide support, particularly if the number of redundancies is large scale.  If your employer has no such support for you then contact your local benefits office who will show you the way through this.
10. The hardest – stay happy!  Recessions can be tough, and some families or businesses can find it much harder than others.  But if you’re getting through it then be proud of yourself, and your efforts.   When times are hard people tend to retreat inwards, and this can be bad in families, particularly if one partner has a habbit of carrying the financial responsibility alone.  Share the burden, share the treats.  Explain to the children that things are a bit tight at the moment and so you’re saving the pennies for Christmas or whatever.  Keep communicating, and make the most of the free things in life.