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The Credit Cruncher was conceived to help you to keep up to date with credit crunch and recession developments, it provides some helpful credit crunch advice and it addresses personal debt. The Credit Cruncher also seeks to explain how the credit crunch started and shed some light on the worldwide recession. Recently, we have begun to look at how BREXIT will affect the UK economy. Please feel free to leave comments where relevant.

2 Nov 2008

Keeping ship-shape in the current economic crisis

A lot of people are anxious to know how the recession and the credit crunch will affect their lives and what they can do to minimise the negative effects. the one piece of advice that can be applied to households and businesses alike is to run a tight ship - make sure you are as efficient with the money that you do have, as you possibly can be.
For the business that means cutting down on waste, maybe even trimming off excess labour - many contractors are finding themselves surplus to requirements recently. Businesses will need to be ultra-competitive, prepared to take a drop in profits in the short-term in order to maintain the business in the long-term. The crucial thing is to have control of the money that is going out of the business and patch up any leaks...
For the household, again controlling outgoings are the key and having a realistic budget is a major part of the strategy that will keep your head above water during the crisis. The vital thing is to remain flexible and match any drop in income with a corresponding drop in expenditure. Shop wisely and put a stop to compulsive spending, move any debt onto a 0% for transfers credit card and put as much as you can afford to paying off the balance.
Of course, not all businesses will be in decline, there will always be those that respond well to an economic slump. Capital-rich investors can add to a property portfolio as the housing market slumps, but I would wait a couple of years for the market to bottom out. Thrift-related business such as eBay trading will no doubt benefit from the inevitable bargain hunting and corresponding need to convert goods into cash quickly.
One surprising development has been the upturn in home brewing - seems that there is a growing trend to spend a night in with some home-brew replacing an expensive night down the pub...

Related posts:
Worth investing in a pension?
Will we all end up broke?
How long will the credit crunch last?

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