Top Tips for Turbulent Times
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The past few days have made it abundantly clear that we are entering a period of intense economic turbulence. They have shown equally clearly, however, that for the moment survival is a matter of taking a few simple steps.
It sounds like pathetically obvious advice but it is nevertheless true. Keep your job. Be proactive, and ask your boss or do your own research. If you know what the challenges are, you won’t be seen to be heading off in the wrong direction if the company decides it needs to change. Now is also the time to be positive and enthusiastic.
Unless you are close to retirement, there is no need to worry about investments, advisers say. Over the long term, the stock market will rise again by enough to cover this week’s losses. However anyone hoping to cash in their shares soon may be better off taking their money out now and switching to safer cash or fixed interest assets in case things get worse.
Anyone struggling with their monthly mortgage bills should consider switching from capital repayments to repaying just the interest on the loan. A lender will charge £50 for the switch, but it could shave hundreds off monthly outgoings. But this should be a short-term measure as failing to resume repaying the capital means your risk not being able to pay off the full loan at the end of term.
Unfortunately, those about to draw their pension will be the hardest hit by this downturn. Most pension funds invest in the stock market, which leaves them especially vulnerable. The insurance analyst Aon Consulting said that the pension funds deficit rose by £15 billion on Monday. Anyone in, or approaching, retirement is advised delay drawing on their pension fund if they can
The good old solution to higher bills is simple budgeting. The debt charity Credit Action suggests drawing up a list of everything you spend to see if money is going on anything unnecessary. Say goodbye to takeaway coffees, and make your lunch at home instead of buying it at work. Be stricter with yourself and check your direct debits in case you are paying for anything you have forgotten about, such as magazine subscriptions or regular charity donations. If you have debt on credit cards or personal loans, switch to deals with the cheapest interest rates
Property prices are already wobbling, with the least pessimistic commentators predicting stagnant prices for the rest of 2008 and even into 2009. The worst fate, as nervous buyers steer clear in such a downturn, is to become a forced seller. To ward off a forced sale, all homeowners should, take care with debt. First-time buyers, on the other hand, may now be in their best position for years.
It may be stating the obvious, it may be preaching to the converted, but these tips could prove vital to staying afloat in the troubling times ahead so ignore them at your peril.
