Recent stock market wobbles have lots of people feeling slightly nervous – but there’s no need to panic! However, times like these are always a reminder that things don’t always go exactly how we’d like financially. To give yourself a bit of peace of mind it’s always a good idea to have bit of money stored up for a rainy day. As a minimum try and have the equivalent of two months salary in savings somewhere you can get to it if you need to. It can help to set yourself savings targets – then when you make them you can treat yourself to a reward!
The financial week that was . . .
The past week has been dominated by stories from the stock markets. Due to problems in the US with the mortgage and housing markets there have been lots of ups and downs in the past couple of weeks. Things seem to have stabilised a bit now but it could still be a while before things settle down fully. Difficulties in the stock markets can have knock on effects for the wider economy and most people agree that we could see the economy slow down a little bit in the near future. It is a good idea to make sure you’re prepared in case money does get a bit tighter, for whatever reason. Have a look at the Moneybasics Saving section for more info.
Last Saturday a report from CreditExpert.co.uk showed that 1 in 5 people admit to overspending to try and keep up with their friends and neighbours. It’s always a real temptation to try and impress people with the stuff we buy but in the long run it can be a very costly mistake! Take a bit of time to draw up a budget (you can use the Moneybasics Budget Calculator, and that way you can always know exactly what you can afford.
There have been lots of debt stories out this week. On Wednesday the Consumer Credit Counselling Service (CCCS) said that young homeowners are likely to owe more in unsecured debt than those who rent. For those under 24 the average debt was £16,351 during this year, but for those with homes this rose to £20,290 while renters owed £12,113. A further dramatic debt stat was released on Thursday when it was shown that the level of debt in the UK is now higher than GDP! That means that consumers have borrowed more than the whole economy generates on an annual basis. As most of this is mortgage debt borrowed over a long time there is no cause for alarm but it does demonstrate dramatically how reliant we have become on borrowing. Make sure you’re clued up by visiting the Moneybasics borrowing section.
Finally, on Friday APACS have released some figures about how people like to do their banking. They show that the fastest growing group of people using online banking in the over 55s. In total around 17 million people in the UK now do their banking online with another 16 million using the telephone banking services. Online banking can be a really useful way to keep track of your money at the touch of a button, making budgeting easier. It also makes it simpler to sort out and monitor direct debits and other payments. If you don’t already bank online it may be well worth you looking into. Visit the Moneybasics Banking section for info on all kinds of banking services.
Prepared for Moneybasics by Chris Tapp