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Recession information - money saving news and tips

The Great Recession by Michael Roberts (Paperback - 3 Dec 2009)


Major Recessions: Britain and the World 1920-1995 by Christopher Dow (Paperback - 5 Oct 2000)

Recessions and Depressions: Understanding Business Cycles by Todd A. Knoop (Hardcover - 30 July 2004)

Accelerating out of the Great Recession: How to Win in a Slow-Growth Economy by David Rhodes and Daniel Stelter (Hardcover - 1 Feb 2010)

Beat the 2008 Recession: A Blueprint for Business Survival by Nicholas Bate (Paperback - 29 Feb 2008)

How to Get a Job in a Recession by Denise Taylor (Paperback - 9 Mar 2009)

International Business in a Recession - Lessons from the UK

Author: Kylie Hargreaves


International business can be more costly and more risky than domestic business, and never more so that when the “r” word or even worse, the “d” word, depression, are bandied around the UK.

But despite all the economic doom and gloom, pulling back from international markets, like the UK, might not be the best strategy. This is particularly true for firms seeking to enter the broader European market.

The UK market has always been strategically important, especially to Australian companies. It’s never just about how much 'bigger' the market is to our domestic economy. The UK offers companies an English-speaking gateway into Europe; it’s a huge source of inwards investment, knowledge exchange and northern hemisphere partnerships. And Australian companies come here in their thousands.

In fact, it’s estimated that there are more than 1 500 Australian companies with a physical presence in the UK; this represents the highest concentration of Australian businesses anywhere other than the United States.

Because of the strategic value of the UK market, Australian businesses that are already here need to think very carefully about abandoning ship. Once you pull out, it will take years to get back in, not to mention the potential spill over effect on any other northern hemisphere business. You may also have lost a golden opportunity to steal market share from your competitors and/or to show loyalty to your UK partners.

But according to a Business Sales Report, in the last quarter of 2008, 2,428 UK firms were placed into corporate insolvency. This was a 220% increase on the same quarter in 2007.

So with big name businesses closing down almost daily, unemployment soaring and trade finance hard to get, what choices do firms have?

Essentially, options exist to defend or attack.

In the areas of defend, its not rocket science, but in times of economic growth practices can get a little "looser" and so the challenge now is to re-establish good discipline. For example, try to manage your inventories tightly, incentivise early payment of invoices, tighten up debt recovery practices, identify what savings can you make in energy, water or waste management, clearly identify your unprofitable customers and either up-sell them or make the decision to let them go, and for your profitable customers be sure to service them very well.

Also don't decrease your marketing efforts if you can at all avoid it. Instead think about how you can attract new customers through low cost e-marketing, partnering or perhaps a low cost diversification of your product that would attract a new market segment.

Economic study after economic study show that those companies that can maintain or even increase their marketing efforts in a down-cycle tend to enjoy greater sales and market share in the eventual up-cycle than those firms who did not maintain their marketing efforts.

In the areas of attack, if you have any cash reserves at all try to use them proactively to get or give better terms to your creditors and debtors, identify opportunities to buy-out some of your competitiors who may not be as liquid as you, extend your reach and/or diversify your offerings – premium vs value - or target the customers of failing competitors.

Lastly, always remember that no matter what is happening at the macro level, there are always pockets of growth occurring within an economy, including the UK. So track emerging growth sectors & market trends – eg. Online sales or eco-nomics (“green” offerings)

This is proving a good tactic for many Australian companies active in the UK where despite the fact that many sectors are contracting, there are still good opportunities to either enter or grow within niche sectors.

Areas such as goods and services in clean tech, security, education, government services, health, energy/water and waste efficiency, outsourcing services, and small niche luxury items continue to grow. As do online sales.

For example, the increased focus on changing the regulatory controls on the UK financial industry, as a result of the financial crisis, has lead to good opportunities for security and compliance software providers like DTEX Systems.

While the need for greater delivery of e-government services, provides opportunities for companies like Neo Products.

Increased demand in the education sector due to the growth in the unemployment market is creating opportunities for e-content providers like Roar Educate.

And “Green” spend continues to remain strong, driven in part by a desire to reduce costs by finding ways to reduce energy, water and waste costs.

So firms like Closed Loop Recycling, who provide food-grade recycled plastic for reprocessing by the packaging industry, are seeing good growth in their business as companies seek to decrease their waste and landfill costs, while also reducing their carbon footprint.


About the Author:

Kylie is the Australian Government's Minister Commercial & Senior Trade Commissioner for the UK, Ireland and Israel. Kylie's role with the Australian Trade Commission (Austrade) is to help Australian companies to internationalise successfully. Prior to taking up her role in London, Kylie was based in Los Angeles, California for five years from 2002 - 2007. As Senior Trade Commissioner – West USA, her territory included Denver, Seattle, San Francisco, San Diego, Las Vegas and San Diego, as well as the work of her own office in Los Angeles. During this time, the number of companies Kylie’s team was able to assist to achieve export sales increased by more than 300 per cent. With over 14 years experience in Austrade, more than half of which has been served overseas, Kylie has extensive experience in assisting Australian companies to successfully and sustainably enter the international trade arena. Kylie has also spearheaded two key Austrade guides for Australian exporters, Doing Business in the US and E-commerce in the US, which included information on the US market, business culture and consumer interests as well as tips for setting up a US e commerce presence.

Article Source: - International Business in a Recession - Lessons from the UK

Recession on the Doorstep, Knocking

Author: Australasian Investment Review

Guess what?

That heavy thump you heard from stockmarkets around the world, especially in the US with the 9% fall in the Standard & Poor's 500 index on Wednesday, was the sound of the last rose coloured glasses falling from the noses of investors, commentators and investment analysts who have finally accepted that the globe is heaving into a recession, led by the tottering US, UK and European economies.After falling Wednesday, European markets again fell heavily Thursday, but the selling wave in the US slowed as investors accepted the new reality. In fact Wall Street bounced strongly in late trading.

Resources were heavily hit as big investors abandoned their last defensive position.

Wednesday and Thursday saw a collection of figures, reports and comments that confirmed that the global economy will drop below the International Monetary Fund's idea of a global recession in 2009: that's global growth of 3%.

It is now clear that the US economy is sliding, nastily, but speedily into a slump the like of which we haven't seen this side of World War 2. US consumers, who carry the US economy on their backs by generating 70% of annual activity, are being battered into submission.

Consumer spending, consumer credit and retail sales are all falling at levels not seen for decades. There is every chance that October's and November will see declines even sharper than we have seen in August and September.

The monthly investment manager's survey from Merrill Lynch, released overnight, says "Investors are waiting for the right conditions to return to equity markets amid the most pessimistic outlook yet recorded"

The survey, completed as global equity markets fell in value by 18.7%, shows that almost seven out of 10 respondents (69%) believe that the global economy has entered recession, up sharply from 44% one month ago.

Growing risk aversion has led to a record 49% of respondents who are overweight cash.

The number of respondents who believe equities are undervalued has reached a 10-year high, at 43%.

"Fund managers are waiting for the triggers that will give them the confidence to buy," said Gary Baker, head of equity strategy at Merrill Lynch.

What they are looking for is a loosening of monetary conditions and for third quarter earnings to clarify where problems and opportunities lie across equity markets."

But the survey showed that respondents appear to be placing little or no credibility in consensus earnings estimates for the year ahead. A net 92 % of respondents regard estimates as "too high," and more than half say estimates are "far too high."

At a time of global pessimism, the gloom is no more concentrated anywhere in the world than in Europe. A net 41%t of global asset allocators are underweight euro zone equities. Europe has now assumed the UK's mantle as the world's least popular destination for equity investment.

The survey also found U.S. fund managers are now much closer to fully accepting what they expect will be a deep and prolonged U.S. recession.

"In our view, however, it is too soon to say we have reached a bottom in equity markets given the current financial market turmoil," said Sheryl King, senior US economist at Merrill Lynch.

Oddly enough, we should be relieved by this information because there's something comforting by an acceptance of an impending or developing recession.

I'd much rather face that than the absolute fear and loathing we saw on markets last week in the global credit panic.

That's not to say the pressures from the panic have gone: they are still with us, but Wednesday and yesterday's weakness on global markets was more an old fashioned acceptance that economic activity is sliding and that there will be more pain and suffering before we get through it.

But not an absolute and stunning collapse.

We are not out of the woods by a long way, but if central banks and governments hold their nerves, we could get away with just a severe economic mauling instead of a replay of 1932-33.

So what happened?

The US Fed said that economic activity had worsened across all of its 12 reporting districts across the country with falling activity in retail, financial services, housing, tourism. The Fed's beige book survey of economic conditions revealed pervasive weakness, with tight credit, deteriorating consumer spending and a weak labour market across the nation.

Fed chairman, Ben Bernanke and the head of the San Francisco Fed, Janet Yellen, both made it clear, in their own way, that there was no quick fix or early rebound for the slumping US economy.

That hopes of a recovery in 2009 were misplaced, and 2010 might see some improvement.

US industrial production fell sharply last month, hit by storms, slumping demand and the credit crunch. The Fed said the drop of 6% was the largest for 24 years and production would have dropped even if there hadn't been storms in the Gulf and a strike at Boeing.

Another Fed survey in Philadelphia showed a sharp contraction in manufacturing in the area, while the commercial paper market again shrank, but the rate of decline is slowing as the Fed starts lending money to leading companies.

US retail sales fell 1.2% in September, almost double the fall forecast by economists as cars, food and every category saw weakness. Sales on internet auction site, eBay off 1% in the quarter, the first fall in history of the company.

The fall left retail sales 1% lower than a year earlier, signalling that consumers withdrew substantially from US shops and malls in the month.

A leading member of the US Federal Reserve, Janet Yellen, head of the San Francisco Fed describing the US economy as being in "appearing to be in recession" and worryingly warning of the chances of inflation falling away next year in the US to replaced by price deflation.

The New York Fed produced its general economic index that had its worst reading since it started back in 2001, when the last US recession was starting.

In good and bad news, US producer prices fell for a second month in a row as oil and fuel costs fell, and demand eased.

The US Labor Department reported that prices paid to US producers fell 0.4%, while core price rose 0.4%. It's a sign more and more American companies are finding it tougher passing higher costs on up the production chain.

US consumer price inflation was better than forecast because of the fall in oil prices and slumping demand: they eased 0.1% for the second month in a row and rose 0.1% on a core basis. Inflation over the year to September was up 4.9% from 5.4% in August.

The fall in retail sales was the third in a row, and the deepest: it was driven by that 27% fall in US car sales in the month and falling levels of demand caused by the credit freeze as consumers were refused credit, or stopped buying on the cards.

Economists say that with retail sales down in the September quarter (and consumer spending and credit also lower) its looking certain that real consumption will fall for the first time in a quarter in the US for 17 years.

In Europe, Germany, the continent's biggest economy, has slashed its growth forecast dramatically.

The German government says growth for 2009 from 1.2% 0.2%, reflecting the rising international risks for the economy, although it warned the precise extent of the slowdown would depend on the severity and duration of the financial crisis.

The new estimate matches the joint forecast published by the country's leading economic institutes in their regular Autumn report on Tuesday. The institute also issued a worst-case scenario that could see Germany's economy shrink by 0.8% in 2009..

The fall in retail sales is making US retailers and forecasters increasingly wary about the highly important Thanksgiving-Christmas retailing season: it could be a terrible holiday for consumers, retailers and the economy and analysts now say the US will have its second quarterly slump in economic growth in a row in the December quarter.

Growth this quarter may dip into the red, and that will produce an outright recession by conventional US definitions.

Ms Yellen said the US economy was likely to see "essentially no growth" in the third quarter and that the fourth quarter "appears to be weaker yet, with an outright contraction quite likely."

"Indeed, the US economy appears to be in a recession," Yellen said.

Ebay forecast that quarterly sales, fourth-quarter and annual earnings forecasts would fall as growth slows at its web sites.

EBay forecast fourth-quarter revenue of $US2.02 billion to $US2.17 billion, compared with $US2.18 billion in the final quarter of 2007. the company said the value of goods sold on its sites fell 1% in the third quarter, the first drop in the company's history.

And late in the day the Fed produced its so-called Beige book.

"Reports indicated that economic activity weakened in September across all twelve Federal Reserve Districts. Several Districts also noted that their contacts had become more pessimistic about the economic outlook.

"Consumer spending decreased in most Districts, with declines reported in retailing, auto sales and tourism. Nearly all Districts commenting on nonfinancial service industries noted reduced activity. Manufacturing slowed in most Districts.

"Residential real estate markets remained weak, and commercial real estate activity slowed in many Districts. Credit conditions were characterized as being tight across the twelve Districts, with several reporting reduced credit availability for both financial and nonfinancial institutions.

"District reports on agriculture and natural resources were mostly positive, although adverse weather associated with hurricanes Ike and Gustav negatively affected the South and the Midwest. Inflationary pressures moderated a bit in September."

It was a very gloomy snapshot of an economy heading lower at increasing pace.

The Fed said that shoppers are becoming more price conscious, credit was becoming even harder to come by and this was sapping sales at the nation's retailers, the report said. Given this, retailers foresee a "weaker economic outlook, including a slow holiday season," the Fed said.

The survey was released shortly after Fed Chairman Ben Bernanke, in a speech in New York, warned that it would take time for the country's economic health to mend even if badly needed confidence in the US financial system returns and roiled markets stabilize.

In the UK unemployment is on its way to 2 million sometime in the next six months after another rise in August to 1.79 million, or 5.7%. As bad as that is, the rate is still well under America's 6.1%.

The official figures show that UK jobless rose 164,000 between June and the end of August. The higher-than-expected increase - of 0.5 percentage points to 5.7% was the largest since 1991 and the eighth successive monthly rise. (It's nine in a row in the US).UK inflation hit an annual rate of 5.2%, a 16 year high.

Our unemployment rate in September rose to 4.3%, where are a long way from the depths of the US and UK economies!


In Europe, new car sales 8.2% last month as the financial crisis put off potential buyers.The continent's automakers association said in a statement: "The drop in registrations confirms the aggravating market circumstances, as the fall-out of the financial crisis hits auto manufacturers hard."

"Customers are increasingly hesitant to make large expenditures and find it more difficult to get their purchase financed."

ACEA said a total of 1,304,583 new cars were registered in September in the 28 countries it reviewed - the 27 EU member states, minus Cyprus and Malta, plus Iceland, Norway and Switzerland.


In Moscow local bank Globex yesterday banned depositors from withdrawing their money as confidence in the Russian banking system began to show signs of ¬evaporating.Globex is a mid-sized retail bank with assets of $US4 billion, according to the Financial Times. It's the first Russian bank to experience a run on deposits during the crisis.

It lost 28% of its deposits since the start of last month, according to local analysts.

At least a dozen other Russian banks have reported a sharp rise in withdrawals and account closures.


Hungary was plunged into deeper financial uncertainty overnight with its currency (the forint) and stock market falling sharply and bankers reporting credit shortages, as concern spread across eastern Europe about the impact of the global financial crisis. In Budapest, the forint fell 5.3% to 266 to the euro and the BUX index of leading stocks closed down 12%, dragged down by a 15% fall of price of OTP, the country's biggest bank. Currencies and stock markets also fell in Poland, the Czech Republic, Romania and Ukraine.The Hungarian turmoil followed moves by leading banks to stop or curtail foreign currency lending, the dominant form of credit in Hungary in recent years.

Analysts now say there's a rising chance that the inflow of foreign currency will slow, reducing the funds available for financing the country's current account and putting more pressure on the currency and on the solvency of banks and other financial groups.

The European central Bank will lend 5 billion euros to Hungary to support the currency and the economy.


So what does this mean for Australia?

Rory Robertson is an interest rate strategist at Macquarie Group; here's his take on what lies ahead for Australia. It's both positive and negativeBusiness investment is Australia's "weakest link"

Prospects for business investment have deteriorated sharply across the globe in recent months, as equity prices have imploded, credit conditions have tightened sharply and commodity prices have slumped. Keynes's famous "animal spirits" have been crushed, pretty well everywhere.

This is a big deal for Australia; because business fixed investment (BFI) is at a multi-decade record 16% of GDP, after having trended higher since the end of the early 1990s recession.

In the 2000s, the uptrend in BFI has been driven by spending buildings and structures, a chunk of it mining-related (see top left of p6 at ).

With animal spirits, spending power and commodity prices having turning down as the global credit crunch intensified, BFI will be the weakest link in Australian GDP growth in coming years.

Indeed, if the Australian economy goes into recession, BFI will be the main driver, as always.

Household spending will be relatively strong, particularly now that fiscal and monetary policy are providing a large boost to household cash flows via lower mortgage rates, and income top-ups for families, pensioners and first-home buyers (see below; and note the heavy official focus on mortgage rates rather than business borrowing rates, to this point at least).

Four upbeat factors that give Australia a fighting chance in global downturnAs regular readers are aware, I've been a bit of a "doom and gloomer" all year. In a NZ conference call last week, I was asked to say something positive, to highlight any recent positive developments. I highlighted four factors that give the Australian economy a fighting chance in a global recession:• The RBA's effective policy framework, and plenty of monetary ammunition. The RBA has cut its cash rate by 125bp in the past six weeks, and the standard-variable mortgage rate has fallen by 105bp. The Fed, the ECB and the BOE can only dream of that sort of powerful pass-through.

Moreover, the cash rate still is a relatively high 6%, so there's plenty of room for lower rates as required. I'm guessing the RBA will cut to a "neutral" 5% by Christmas, dragging mortgage and business rates significantly lower (see further discussion below, and attached RBA Watch).

  • The weak A$ now is Australia's new best friend, given the substantial recent drops in global commodity prices. The A$'s 20-30% decline from recent highs is a huge free kick to Australian exporters and import-competers, to the extent that it is sustained. As noted here last week, some of our tradeable sectors suddenly are back in business.

    Yes, global demand is weakening fast but at least our tourism, agricultural, manufacturing, education and other tradeable sectors will sell more with the A$ near 70 US cents than near 90 US cents (or with the TWI in the 50s rather than in the 70s).

  • Canberra's pristine balance sheet means there is plenty of fiscal ammunition (see p8 at ). Canberra has plenty of room for counter-cyclical efforts, including new spending, tax cuts and loan guarantees, while both Canberra and the States have plenty of room to continue the expansion of their infrastructure programmes.
  • Indeed, Canberra yesterday announced a pre-Christmas stimulus package worth perhaps 1% of GDP, featuring cash top-ups for pensioners, low and middle-income families and first home-buyers).
  • Importantly, with a no-net-debt starting point and Australia's lenders well regulated and still-very profitable, Canberra's guarantee of financial system deposits and selected (new and existing) debt securities is absolutely credible.

  • Australia's housing sector is widely seen as having the problem of "under building" rather than "over-building, as in the US. In Australia, rapid population growth - driven by immigration of 100-200k every year for the past decade - has collided with a flat two-decade trend in new home starts of only 150k per annum. Canberra has overseen the biggest immigration programme in Australia's history, without initiating the construction of extra homes ("land release" and "planning" for home-building generally is overseen by State and local governments).

The dismal lack of co-ordination between Canberra and the States on immigration and housing long has been seen as a problem, putting upward pressure on home prices and rents, and reducing "housing affordability". Now, Australia's slow-moving housing-supply response suddenly is a good thing, limiting the size of any future home-price falls (see p4 of ).


Immigration and home prices

As you know, falling home prices are a major problem in the US, the UK and parts of Europe. The damage done by falling home prices to banks' balance sheets in these economies - and growing damage to consumer spending - obviously needs to be avoided in Australia. According, while largely unstated, maintaining Australian home prices near current levels now is a major policy priority for the RBA and Canberra.

Aggressive rate cuts obviously help, so too yesterday's prodding of up-to 150k first-home buyers into action.

In this context, recent reports of growing pressure to reduce our immigration intake are somewhat disturbing.

Recall that, during the early-1990s recession, net immigration collapsed from 170k in 1989 to just 30k in 2003 (lowest four-quarters-ended figure), reinforcing the Australian economy's tendency to stall.

From a macroeconomic perspective, cutbacks of that order this time around should be avoided like the plague (see Net overseas migration to Australia highest on record: ABS and SMH: Rudd flags cut in migrant numbers )

To recap, all the important policy efforts so far are counter-cyclical in nature: in particular, the RBA's rate cuts, Canberra's timely fiscal stimulus, as well as its guaranteeing of aspects of the financial sector, its promotion of mortgage lending and the ban on "short selling" (not to mention the big market-driven drop in the A$).

By contrast, reducing immigration is a pro-cyclical measure, essentially working against the policy initiatives listed above.

RBA policy, lower interest rates, and limiting falls in home pricesThose forecasting big falls in Australian home prices would do well to notice the recent dramatic drop in mortgage rates, with more to come.The correspondingly sharp drops in interest payments relative to household income render much less relevant the elevated debt/income ratios parroted by some.

Comparing stocks with flows typically tells us little worth knowing; comparing interest payments with income (flow/flow) and debt with assets (stock/stock) provides more meaningful information.

With the world economic and financial backdrop having turned so nasty, aggressive RBA easing was/is the most obvious policy response available to support ongoing economic growth.

And in six short weeks, the RBA has demonstrated that its interest-rate tools are far more powerful than those available the Fed, the BOE and most if not all other central banks. Despite much media focus, elevated inter-bank lending rates haven't stopped big drops in mortgage rates in Australia.

To recap, the story so far:

  • the RBA has cut its cash rate by 125bp in two steps (25bp followed by 100bp), with more to come

  • the three-month bank-bill rate (BBSW, a key guide to a chunk of bank-funding costs) has dropped by about 1-1/3pp over the past month, to 6.1%; and
  • Headline mortgage rates have fallen by 105bp, to about 8-1/2%. Furthermore, three-year fixed mortgage rates have dropped by more than 1pp and now are widely available near 7%. Other important lending rates also are coming down, though not as quickly.

In Australia, the 84% (105bp/125bp) pass-through so far from the cash rate to standard mortgage rates has greatly surprised the consensus, because when I wrote a note in August headlined "First 50bp of cuts to be 'passed on'", many/most were sceptical to say the least.

Importantly, the latest funding assistance provided by the RBA to major home lenders may mean that the next cash-rate cut will pass-through to headline mortgage rates in full.

That is, the RBA last Thursday announced the availability of six-month and one-year repos against "related party" collateral in the form of residential mortgage-backed securities (RMBS) and asset-backed commercial paper (ABCP).

On top of that assistance, Canberra's announcement on Sunday helps with "term funding" for periods of up to five years (see Expansion Of Domestic Market Facilities and Guarantee of Wholesale Funding and Deposits ).

Critically, recent 1pp-plus drops in cash, BBSW and mortgage rates are gold for Australian home-buyers, providing major cash flow support to the household sector and home prices, something the Fed can only dream about.

That is, despite the funds rate being cut from 5.25% to 1.5%, the rate on (predominant) US 30-year fixed-rate mortgages has dropped by only around 50bp, to 6% or so, when credit is available.

IMPORTANT: AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decisions.

About the Author:

Australasian Investment Review (AIR) is a free daily news service covering global financial markets with a focus on Australia, New Zealand and Asia. Each day our team of experienced journalists presents you with a concise digest of expert opinions and analysis on trends and backgrounds that matter in these markets. Subscriptions are free at

Article Source: - Recession on the Doorstep, Knocking

The first time buyers guide to surviving the recession

Author: Mark Aucamp

Recessions come and recessions eventually go but if you were born in the 1980s or 1990s, you may not know what to expect or how to cope during a period of financial uncertainty. This guide gives all you first-timers a few pointers to surviving until the next boom comes around.

Your attitude

Stick to the essentials

Decide what’s essential and what’s not. A recent survey for CreditExpert, the online credit monitoring and identity fraud protection service, found that half of us have given up thinking about a new car this year and 30 per cent have decided not to buy a home. A quarter of 25 to 34 year-olds have also worked out that children are expensive and have put plans for a family on hold and 12 per cent are delaying their wedding. So, if you don’t really need a new car but do want to get married, set your budget accordingly.

Bye-bye bling

Bling, flash and ostentation are out, so you might want to ask your grandparents for tips on scrimping and saving. They’ve been through harder times than this and survived.

Your finances

Be money wise

Get a handle on your money. Go through your bank and credit card statements and look back through your major bills. Identify where you can cut back, then set yourself a budget and stick to it.

Know what you owe

It’s easy to overlook a credit card, loan or catalogue account, so take a look at your credit report, which lists your credit accounts and repayment record. It gives you a snapshot of your current position and helps you to identify which accounts are costing you more, which can be closed and which you should aim to pay off. It needn’t cost you a penny to see your Experian credit report with a 30-day free trial of CreditExpert.

Understand interest

Make sure you understand interest rates – and know the rates you’re paying on your loans. Another CreditExpert survey shows that two-thirds of us don’t know the interest rate on our credit cards and more than half of us have no idea what the APR is on our loans. Without these facts, you can’t decide if the loans you have are a good deal or whether you would be better off with a different source of finance.

If you’ve got a mortgage and your payments have fallen, consider using any money you’ve saved to pay off higher interest debts first before paying off more of your home loan.

Polish up your credit status

If you need to borrow, it pays to polish up your credit status. Start with your credit report – lenders look at it when they decide whether to make you an offer and what interest to charge, so correct clerical errors, challenge misunderstandings, register to vote at your current address and ensure it’s up to date and accurately reflects your situation. During your CreditExpert trial, you can also order your Experian Credit Score for just £5.95. It won’t be the same as the credit rating calculated by a lender because everyone uses a different formula but it will give you an indication of your creditworthiness.

Don’t dig

If you do get into a financial hole, avoid borrowing to pay off existing debts. Instead, talk to your lenders to see if payments can be rescheduled and get free advice on how to manage – try Citizens Advice at www., National Debtline at or the Consumer Credit Counselling Service at

Be benefits aware

You might be entitled to state benefits that you’re not claiming. Go to to see if you are missing out.

Your lifestyle

Little luxuries – major expenses

We all like our little luxuries – but the cost soon mounts up. Cutting out shop-bought coffee and sandwiches can save hundreds, while tap water is virtually free. Swap DVDs instead of going to the cinema and visit family or friends instead of taking city breaks. And remember – eating in is the new going out, so invite friends over to socialise. You can host two or three dinner parties for the cost of one restaurant dinner, especially if you buy ingredients at a discount supermarket or local market.

Useful utilities

Use price comparison sites to make sure you’re getting the best deal on energy and telephones. If you’re not water metered, look at the pros and cons of installing one. Get into the habit of turning off lights, appliances and taps – it’s good for the planet and your wallet.

Be swish

You may not be able to afford lots of new clothes but don’t worry – swapping events, known among fashionistas as swishing parties, are a hot trend. Ask around and check the internet for swaps near you. You can also look in charity shops, which carry some great bargains in nearly-new designer wear. It’s also worth checking out online services such as where people post unwanted items of all kinds, from plants to domestic appliances. You only pay to collect them.

Get fit for free

Travel is an expensive business, so walk or cycle to the shops or work if you can. You don’t need a gym to take a run – go to the park instead, buy some weights and download a fitness programme from the Internet.

Your reward

Surviving a recession means learning to swap the sugar rush you used to get from a spending spree for the lasting satisfaction of managing your resources effectively. You’ll not only feel more confident that you’ll get through the current economic turmoil but will also learn good habits that could help you to achieve your financial ambitions when the upswing comes. It will become second nature to keep a close eye on your budget, not to fritter your cash away and to check your credit report regularly, so you can afford the life you want without building up a mountain of debt.

About the Author:

Contributing author Mark Aucamp has been providing Talk Money Blog with regular Money Saving Expert advice and comments. Mark has extensive experience in providing Debt Management, Quick Mortgage Advice and solutions. He is recognised as an authority in the field of debt management and mortgage advice. Find out how to clear your credit card debts legally!

Article Source: - The first time buyers guide to surviving the recession




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