OK, I’ll admit myself that I hate all of the sensational headlines about house price crashes and recession, but with the economy in a downturn, it’s worth considering what we should do should we go into recession.
From a personal point of view, over the last few months we’ve been taking a lot more care with our finances, knowing that we are going through difficult times. This is probably something we should have been doing anyway, but it becomes even more important in these uncertain times.
Our mortgage is fixed for the next 4 years, so there’s little we can do with that, but we’d also been talking about the possibility of increasing the loan to fund an extension; we’ve decided to shelve this idea for the moment while we see how the credit crunch develops. We’ve started to snowball our credit card debts and we’re also trying to reduce our other outgoings such as food & energy bills, as well as our insurance cover. I’ve also been talking about cutting my car use (of course, I’ll be finding out how much driving costs me first).
Despite all these cutbacks, there are a couple of outgoings that I’ll not be touching – pension contributions and life insurance.
I’d like to look at some sort of unemployment or redundancy cover (working in financial services is an interesting industry to be in at the moment) – probably ASU cover?
So we’ve made a few changes to our finances which will hopefully help us if the current downturn does get worse. Have you thought about what you’d do in a recession? Have you altered the way you look after your finances in preparation, or do you always look after you money in such a way as it doesn’t matter what the economy is doing? Let us know in the comments below.