Action Stations

By Tom McPhail | 22 Jul, 2008 

First the bad news:

Inflation is going up, wage settlements are being squeezed and the first job losses are popping up in some sectors of the market, your house is worth less than it was and the investment markets are unpredictable at best and in some cases they are downright scary.

So what can you do? Most of the following is just common sense, it is more of a checklist really.

Make reducing expensive debt a priority, credit and store cards at 15% are seriously damaging to your wealth. So do what you can to get rid of that debt.

Avoid getting into arrears on your mortgage. A good credit history is important when cash is in limited supply; arrears could reduce your chance of remortgaging.

Do a cash flow diary. Record everything you spend money on for a month or two. It is tedious but surprisingly useful, as it can then guide you on areas where you can reduce expenditure. I can almost guarantee that you will find ways to save money.

Drive less – if the alternative is to walk or cycle, then it will also improve your quality of life.

Review household utilities, including telecoms; particularly with broadband providers there is scope to haggle over contracts and to reduce costs.

Make sure you are getting the best rate on cash deposits.

Always ask for a discount when shopping – it takes a bit of getting used to, but it is surprising how often you can get money off.

If you are investing for the long term, then don’t be afraid to keep investing in the markets; if you wait for the recovery then you risk missing out on significant investment returns.

Make sure that you are not paying more tax than you need to, and that you are claiming any reliefs due to you. For example you can claim higher rate relief on charitable donations, as well as on your own pension contributions.