Recession-proof your life
Everyone is talking recession, recession, recession. It may sound scary and upsetting. But don't panic: we're not actually in a recession right now, even if it seems like we are
A proper recession is six consecutive months of negative economic growth (i.e. it's going down). At the moment our economy is still growing, a little, and we could still avoid the big 'R'.
If a recession does hit, though, there are several ways in which you can protect yourself and even profit from it!
1. Get out of debt
Getting out of debt is important in any economic climate, but in a recession getting hold of loans and mortgages is even more difficult, and therefore more expensive. So make sure you sort out your debts as much as you possibly can, as quickly as possible.
There are various things you can do to reduce your borrowing costs and pay off your debts more quickly:
- Try to transfer credit card balances onto 0 per cent interest cards to give yourself a break from interest payments and help you make a dent into your actual balance.
- If you've got a loan at the moment, see if you can get a better deal elsewhere and switch it fast.
- If you are coming towards the end of the fixed-term period on your mortgage, start looking for a new deal straight away. You can sign up for a new mortgage up to six months before the end of your fixed-term period, so if you see a deal, grab it.
If your debt situation is really frightening, though, and you don't know how you're going to get out of it, get in contact with either the CCCS, the Citizen's Advice Bureau or the National Debt Helpline. These services are all free of charge and will help you sort yourself out so you can work towards being debt-free.
2. Cut down on your expenses
Firstly, cut your costs the easy way by switching your monthly bills to cheaper versions. Find cheaper gas, electricity, loans, insurance, phone services and other services online.
Take a couple of evenings out and give yourself the goal of saving hundreds of pounds over the year on all your essential bills. Then you need to turn your attention to your daily spending on 'bits and pieces'.
If you think you don't fritter your money away, then keep a spending diary of everything you spend for a month. That way you will be able to see what things you spend on that you don't really need and can cut back on.
It may sound silly as some of these items may be just a few pounds here and there. However, it all adds up and with more expensive mortgage payments, a couple of pounds here and there could make the difference between you keeping and losing your house.
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