Tips for saving money in a recession

All of us need to tighten our belts in a recession, but sometimes it’s difficult to make crucial spending decisions.
Here’s a list of some sensible tips for saving cash without making your life too austere:

1. Stop spending – keep your cash together and set yourself a ‘cooling off’ period before you spend on that bargain in the sales. Consider whether you really do need more shoes or that computer game.

2. Check out the comparison sites on the web for insurance, utilities and credit card rates. Make sure you are not paying over the odds and switch to a cheaper product if you can.

3. Check out your bank statement and look at all the outgoing expenses – cancel what you can. Most have us are paying a few pounds every month for a service we don’t really use, like gym membership when we could take up more running or walking.

4. Declutter – all those old clothes and unwanted gifts that are taking up space in loft, cupboards and under the bed can be cleaned up, photographed and auctioned off on websites like eBay. Or do a boot fair.

5. Look at your shopping bill. If you are mostly buying ready meals or living off takeaways, cut them out and start buying the ingredients and cooking your own meals. Maybe having your main meal at the canteen at work and a sandwich when you come home could work out cheaper.

6. If you do eat your main meal at home, then take a packed lunch to work instead of buying food.

7. Look at life’s luxuries – your mobile phone and Sky TV – do you really need a prepaid plan with all those texts and minutes? And how much TV do you actually watch to justify extra money on all those packages?

8. Cut your coat according to your cloth - put your credit cards safely in a drawer and live off your income rather than borrowing.

9. Change your brands – switch essentials like cleaning products, tissues and cooking basics to cheaper supermarket own brands rather than pay extra for a ‘brand’ name.

10. Buy a bread maker and a slow cooker in the sales. They are both relatively cheap kitchen appliances. A bread maker will soon pay for itself and keep you with a constant supply of crusty, homemade loaves while you can set a slow cooker before you go to work and come home to a piping hot meal.

11. If you have children and live within walking distance of the school, then keep the car on the drive and give you and family a breath of fresh air and some exercise.

12. If you have a spare bedroom and are struggling with the mortgage and bills, consider letting a room. Currently, you can charge a total of £4,250 a year to a lodger without paying any tax – that’s an extra £82 a week in your pocket.

If you are unlucky enough to have lost your job, taking in a lodger won’t affect any benefits you are claiming.

13. Put a little bit of money aside every week for a family treat, even if it’s something simple like renting a DVD and buying some sweets. Times might be tough but you need something to look forward to as well.

Summary

• Stop spending and review your financial circumstances by listing all your income and outgoings and considering what, if anything, you can cut.

• Declutter and be ruthless with your stuff and see what you can sell to on eBay

• Save money with cheaper brands, more home cooking and walking rather than driving where you can

• Don’t take things too far – save a few pounds a week for a treat and something to look forward to

Six Tips to Help You Beat a Recession

With financial markets the world over slowing down as a result of the credit crunch, and people preparing to tighten their belts in light of the looming financial crisis, here are six easy ways to help keep yourself afloat during these economically turbulent times.

1. Don’t panic.
It’s easy to lose your head a little bit when the media seems to be talking about nothing but the terrible financial quagmire we’re in, but try and remember that a lot of it is media scaremongering. Bad news sells papers, and so statistics like rising food prices and employment rates and tumbling property values are exaggerated. As bad as things might seem, remember that most recessions last between 12 and 18 months, and then things get back to normal. This isn’t 1929, and it’s certainly not the end of the world.

2. Plan a budget.
Make sure you know your finances inside out. That means knowing how much you’re bringing in, how much you’re paying out, and how much you have left at the end of the month. Don’t spend more than you’re earning if at all possible. Avoid extravagant purchases, and save whatever you can in order to provide yourself with a buffer should you lose your job (3 months’ expenditure is the standard advice, 6 months’ worth if you’re freelance or self-employed).

3. Consider buying stocks.
It sounds counter-intuitive, but if you’ve got a little spare money lying around, consider investing in stocks. Share prices tend to drop during a recession only to pick up afterwards, so it’s possible to make a tidy profit if you’re willing to wait out the dip. However, while it sounds obvious, you need to remember that some companies won’t survive the recession, which means you could lose out if you back the wrong horse. Tread carefully, and never invest more than you can afford to lose.

4. Shop around for a better deal.
If you’ve put off switching your gas and electricity provider previously, now might be a great time to consider a switch. For a little bit of effort spent scouting around, there are definite savings to be made, and most people could end up with a substantial amount of cash in their pocket as a result.

5. Don’t change jobs.
In an economic slowdown, many companies are trying to save money. The easiest way of doing this is to lay off staff who are surplus to requirements. Additionally, many companies reward loyalty by getting rid of the newest staff members first, and so attempting to switch jobs during these shaky times might backfire on you. Unless you absolutely have to leave, you might be better off staying where you are, at least until the economic climate becomes more favourable.

6. Embrace opportunities.
If the worst comes to the worst and you do end up losing your job as a result of the recession, don’t let it get you down. There are still lots of opportunities available to you, and while some industries (construction, finance, property and the motor industry, for example) may suffer as a result of the economic slowdown, others – such as education – may not take any noticeable damage, or may even improve. If you’d planned on switching to a new career, now might be a good time, and remember: recessions don’t last forever, so even if you don’t want to switch industry, you should be able to find work relatively soon.