How To Survive The Credit Crunch
The exact day the UK was officially considered in a recession is difficult to say. The news was telling us one thing, Alistair Darling kept saying the UK was fine, yet all around us major banks were collapsing in an unprecedented financial fiasco. Just like the banks who found themselves owning billions in toxic debt, we consumers had to face the fact that we have been living way beyond our means.
Prior to the current financial crisis, Britons were spending much more than they could afford to repay by way of credit cards, personal and secured loans, remortgaging the equity in their homes, and so on. Once the banks began to crumble, and surviving creditors clamped down on who they would lend to, the average person realised the party was over and had to get used to not being able to spend frivolously like they had in the past. In essence, the way we used to live was changed forever.
So, how do we survive the credit crunch? Firstly, we need to accept the fact that if we can’t afford certain things, we simply have to do without. This is the first step. Secondly, create a budget. If you want to take the kids on holiday during the summer, start saving in winter, or better yet, start saving a year in advance. Cancel your credit cards. This may feel a bit painful in the beginning but this momentary discomfort will be a lot less painful than if you max out your credit cards and start receiving massive bills or worse, a CCJ or similar court order.