The vast increase in the cost of living which is being both subtly ( via the local council and the treasury) and unsubtly ( prices on everything from fuel to condoms on the up) passed on to the working classes - by that I mean those who work - is starting to have an huge impact on society here in the UK.

The dangerous trend of late has been to build up large debts, with the average salaried worker in the UK having to pay some 60% of their wage packet out on debts, council tax and mortgage payments.

Increases in interest rates, house price falls and the actions of the lenders to mitigate their potential losses in the face of recession by withdrawing credit are all conspiring to cause great problems to many people.

Is there a solution one must ask oneself in the face of such outrageous fortune?

Well, just make sure that you are not overstretching yourself, that is all. Try to be a bit frugal and more than anything else try to reduce your obligations. Seek out the very best rates on all your borrowing. Remortage or look to go interest only for the near future and try to pay off your cards, then tear up the evil temptors that they are.

But, above all else. Enjoy yourself, its later than you think.

We are on a boat and the wind is getting up, it is a harsh wind which promises a change in the weather…..

The council have decided to up the amount due to them on an annual basis, they have arbitrarily decided that this rise in council tax will be around 8% in my region. I would much prefer it if they, instead, looked at ways of cutting down on expenditure.

At the same time the utility suppliers such as EDF Energy and British Gas ( who both posted record profits last year ) have announced > 10 % hikes in charges for gas and electricity.

Whilst interest rates have been held down for a while now, there is sure to be an uncontrollable creep upwards in the near future, although the Bank of England and the Treasury are assuring us that all is fine, I can see the water seeping into our boat ever so steadily and it is only a matter of time until everyone has wet feet.

and then the proverbial will really hit the fan…

Irrespective of the value of your property, and we have been promised a huge fall in house prices, leading to negative equity and vast debts for many, interest rises willup the payments and lead to further debt. Increased cost of living will mean less money in our pockets for spending, and hence to a decrease in spending and a decrease in income for the service sector.

What can we do to protect ourselves in the face of this looming recession ?

It is suggested you start acting as though you are poor, really poor, start managing your debts as if you were already struggling ( even if you are not already). Base your budgeting on, say 75% of your present income and you will balance your books now in readiness for what is likely to happen in the next few years.

Baton down those hatches, oil the canvases and get ready for the storm, as it is coming, be sure of that.

Happy New Year. The New year brings us all a fresh chance to take a new perspective on life; you make resolutions, you look at ways in which to improve yourself.

I have recently read the statistics of what people most want to achieve in the New Year. The following list should not surprise :

• Lose Weight and eat more healthily
• Work Less
• Improve Financial Situation

Diet

It is fool who can not make this one work, for after all, we are surely to be held responsible for what goes into our mouths. The main way in which one can improve your diet - and this goes for most things in life - is by using a little forethought. We are no longer foragers who need to graze throughout the day whenever the opportunity presents itself. We now have access to cheap and nutritious foods in supermarkets and grocers. If you start out your week by planning what you are going to eat it is relatively easy to create a well balanced and ultimately more health and less fattening diet.

Just think how much many people spend on their work lunches! The amount most people spend could well pay for a luxury holiday it they took the time to make some lunch from home.

Similarly if you take the time to walk a little rather than drive each day you will find that your personal fitness level will increase dramatically.

Book some regular exercise - Swimming Lessons or Tennis may be a very enjoyable alternative to jogging.

Work Less

Achieving a good work life balance is important for all so here is my take on improving the balance.: try to work from home more often, rearrange your working hours so that you can go in early/ leave early on different days of the week, this breaks up the monotony and makes you feel more as if you have a life rather than a rigid timetable.
Get a better paid job, well you may as well try….you never know your own value.

If you are able to make savings in other areas of life you can even consider downsizing your work and taking a worse paid position with fewer hours..

Improve Financial Situation

Well, obviously this is also a matter of balance - making sure that you spend less and earn more. You may also consider making funds available via car boot sales, ebay or through cashing in an old life assurance policy, selling a pension or killing off an elderly relative.

As per the previous sections it is a good idea to try to add some sort of planning to your daily routines, aim to do a large budgeted shop on a regular basis rather than frequent trips to smaller shops. Learn to cook properly, a simple baked potatoes and beans costs some 50p to make and is a healthy alternative to a pizza.

Stop drinking so much beer

If all else fails I would advise going bankrupt and going on the dole, just make sure you have stocked well up on necessities first, as you don’t want to live a totally spartan existence, do you?

In all sytems, we learn in Physics there are rules about in and outs and clear and defined Laws of Thermodynamics which govern movments of matter in an environment. These same rules may be applied to personal finances.

Hence looking at the first, and most accessible law :

In any process, the total energy of the universe remains constant

Apllied to your personal financial situation this demonstrates that the amount of money swilling around your coffers is likely to remain the same, hence it is important that you balance out your expenditure with your income in a simple manner.

Step One :

• create a spreadsheet with all of your monthly outgoings on it such as
• Work out exactly how much your set expenses are oon a monthly basis, ie council tax, mobile phones, electricity, gas, broadband, rent/ mortgatge, petrol/ diesel, nursery, insurance, clothing, etc
• Then you will see quite clearly what you have reasonably left over each month.

Then you should set about cutting down the outgoings as much as possible, look at ways to reduce your bills by renegotiating with your suppliers, cut down on the curries. Soon you should see your available income increasing and you can put more and more of it aside to reducing your debt burden.


It is not rocket science, it just requires some self control and foresight, but then again, if you had these qualities you wouldn’t be in this mess in the first place.