With the UK entering a double dip recession, you might be wondering how you will be impacted, where money is better spent and how long this recession could last for. Dealing with the double-dip recession can be easy by planning ahead and keeping an eye on how family finances are being used.
Keep in mind that the readings from the Office for National Statistics are just preliminary readings and could be subject to change upon the second and third readings. This would mean, that although news stories have already been written, the UK might not actually be back in recession.
However, this doesn’t mean that you shouldn’t be prepared to deal with a double-dip recession. Keeping on budget will offset any potential austerity measures that could be put in place such as rises in VAT. An online household budget calculator is great tool for mapping out exactly what, where and how much you have coming in and going out every month. Some calculators are more in-depth than others and can be a great help if you want an intrinsically planned out budget.
In a recession, creditors and people that are owed money are more likely to demand this cash, adding extra charges on top for those that miss payments. Dealing with the double-dip recession can be greatly helped by paying all bills as soon as they are received. To do this, set up direct debits, keep a calendar of when you will be charged and by who, make sure all bill payments are in the budget and if you need to query any changes to bills then contact the creditor or provider immediately.
To free up that little bit of extra cash you should see whether or not you are entitled to benefits from the Government. Some people have no idea that they might be entitled to income support, housing benefit or child benefit. The DirectGov website will give plenty of information to those who consider they might to claim for a particular reason.
Getting through a recession financially unscathed will undoubtedly be hugely dependant on how much money you have at both the beginning and end of it and there are a number of things that can influence this.
Employment, most obviously, is the key factor to staying financially secure throughout a recession. It is likely, as it has been the case in the last year, that the rate at which wages are increased continues to flat line. This is partly due to companies being careful in how they spend their money and also because, in many cases, profits have declined. This wouldn’t be so much of a problem if the cost of living wasn’t continuously rising. A recession does not mean that absolutely no one is hiring, so if you find yourself out of work there is still hope. As well as this, if you do not receive the wage increase you wanted, or perhaps expected, there is also the chance to find a job elsewhere that is paying the money you desire.
Attempt to put together some savings as well, although with the Bank of England base rate still at a record low of 0.5 per cent, and looking like staying there for some time yet, this can be difficult. However, by putting just a little bit by a month for any eventuality you can be assured that should the worst happen – such as losing a job – you are financially prepared.
In a recession when there is less money, the cost of essentials can sometimes rise, beware that the cost of luxury items is likely to rise along with this. Try to avoid paying too much for items that are not essential for everyday living, such gym memberships and social events. Most movie theatres offer a cheaper night and with Orange you can get two for one entry on a Wednesday. Also, consider renting a movie and watching at home. Obviously, as they say, some films are made for the big screen, so keeping them but some are designed to be watched while hiding behind a cushion on a sofa.