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Families. Spend? Save? Panic? How much of a mess are we really in?


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Old 08-05-2012, 10:28
jessmum
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Now I know most of you haven't got a crystal ball but I'd like an idea of whether the economy and country REALLY are in as much a mess as the newspapers make us out to be and what the average family should be doing about it.

We are a family of 2 adults & 2 kids - your average, typical family - both workig full time in jobs earning an average wage. Just over the tax credit threshold so thats gone - we are feeling the pinch a little but with canny food and utility shopping and trying not to be wasteful we manage quite nicely.

We don't save a great deal - enough to have a family holiday once a year and enough to have a nice Christmas etc but I'm really starting to get a bit worried about the Eurozone problems and the papers are all gloom and doom. I'm seriously considering not booking a family holiday for 2013 as all I'm hearing is that things will get worse and 'batten down the hatches'. We are back in recession and both of our jobs are in manufacturing and although they are looking safe at the moment who can tell whats around the corner.

Surely though, if every family thought like us and reined in spending then there's less money in the economy for things to pick up?

So whats the answer? should austerity be the answer or should the government be encouraging families to go out and spend? The shops local to me (Asda, tesco, M&S, Next, Boots etc) seem full with people buying every time I'm there so are people as badly off as the newspapers would like us to think? Is there really worse to come? I don't know what to think?
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Old 08-05-2012, 10:39
jmclaugh
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Surely though, if every family thought like us and reined in spending then there's less money in the economy for things to pick up?

So whats the answer? should austerity be the answer or should the government be encouraging families to go out and spend? The shops local to me (Asda, tesco, M&S, Next, Boots etc) seem full with people buying every time I'm there so are people as badly off as the newspapers would like us to think? Is there really worse to come? I don't know what to think?
Depends what you mean by austerity. If it is a government cutting public spending and increasing taxes then it can't sensibly expect people to go out and spend more when they don't have it to spend. This is especially the case when wage inflation is below price inflation and many people already have a high level of private debt.

So while we may have governments urging the public to spend more in the economy they aren't doing anything practically to make that possible so it is ridiculous to expect it to.
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Old 08-05-2012, 10:45
jessmum
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I meant should we be saving and keeping every spare penny and not booking holidays, buying clothes, having days out etc even if we do have some spare money to do this with.
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Old 08-05-2012, 10:52
jmclaugh
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I meant should we be saving and keeping every spare penny and not booking holidays, buying clothes, having days out etc even if we do have some spare money to do this with.
Not sure if you mean yourself or everyone.

Anyway 'we' is a collective term that covers very different groups of people with very different situations and what they should be doing is up to them based on their situation. If everyone does what you are asking the world economy will crash.
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Old 08-05-2012, 11:13
jassi
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I meant should we be saving and keeping every spare penny and not booking holidays, buying clothes, having days out etc even if we do have some spare money to do this with.
Although I don't believe in getting into debt over the sort of spending you are refering to, what is money for if not for spending? On the other hand, spending on stuff you neither need nor want is pointless.

It's wise to have some savings to fall back on, but if you have too much, you can be sure that the state will find ways of taking it from you
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Old 08-05-2012, 11:33
auntiesocial
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It's a difficult question. Can you ever really be prepared? My family were much like yours, except I had four children. My husband and I had always worked and we liked to save. We never went on holiday and days out were limited, but we did have small luxuries like Sky and the kids had their games consoles. We never spent stupid amounts of money on the latest trainers or mobile phones. If the kids wanted those sort of things, they had to get a paper round or something to pay for it themselves. We built up quite a nest egg, so when we were both made redundant when the economy tanked, we thought we would be okay. WRONG! We survived nearly three years but still had to claim benefits in the end. I can tell you now that is soul destroying! Especially when you have done all you can to avoid it, yet you are treated as though you are a criminal.

You say both you and your husband work in manufacturing. Hopefully this is not for the same company as my husband and I discovered too late is not a good idea.
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Old 08-05-2012, 11:58
Hitchhiker553
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The Eurozone crisis isn't going away any time soon as the indebted countries debts are increasing by the minute.

The best thing people can do is to increase their income by diversifying and starting their own business.

I run a Kleeneze business and feel more secure now than ever.
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Old 08-05-2012, 11:59
jessmum
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We did work in the same place but hubby got made redundant after 23 years in 2008. What a shock, but he was extremely lucky to get temp employment elsewhere within a week of being made redundant and he was made perm in 2010.

We still have some of the redundancy left (about 5 months pay I guess) but I'm starting to get a bit scared about what may be around the corner again with us having gone back into the recession - we may not be so lucky next time around. It started to feel that confidence was returning in the economy and we felt we could relax a bit but everything I'm reading is that it ain't over yet, by a long way and I'm losing confidence in spending for the family now....
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Old 08-05-2012, 12:06
jessmum
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Kleeneze? Well I have to be honest, most canny shoppers like myself find their products very overpriced.

I wish you well but I think you'll find that as peoples' purses are being increasingly squeezed as ours are, shoppers will look elsewhere - the only part of my outgoings I have total control over is my food and cleaning materials and household items I shop hard to make savings - I now exclusively shop at Aldi saving around 30 a week - this helps the holiday fund massively!
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Old 08-05-2012, 12:10
tysonstorm
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Now I know most of you haven't got a crystal ball but I'd like an idea of whether the economy and country REALLY are in as much a mess as the newspapers make us out to be and what the average family should be doing about it.
No we are in so much deeper than the media lead us to believe, 100x deeper. As for the average family and what you can do about it? well they can't do nothing. This is Economic Warfare and during any form of warfare there are casualties. And that casualty is you,your family and your way of life.

http://maxkeiser.com/ and http://www.youtube.com/user/MaxKeiserTV is a good point to start educating yourself of the seriousness we are in.

Even now the turds in the Coalition, who have only implemented 6% of the cuts and austerity they committed themselves into and are admitting that the financial mess is far worse than they expected. http://www.metro.co.uk/news/898409-d...han-we-thought

I'm just grateful I don't own any assets nor have 2 pennies to rub together.

If you are going to shop then shop cheap, go to the poundshops and also buy second hand. Don't bother keeping money stashed under the beds because when the economy tanks they'll be just worthless bits of paper.
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Old 08-05-2012, 12:13
Phil 2804
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Britain's business are collectively sitting on a 750 billion cash pile. That is roughly 50% of our annual GDP. That could pay for projects like a new Thames aiport, of HS2 twenty times over.

That they would rather sit on that money and endure recession, than invest and get the economy moving speaks volumes about whose interests our overpaid business leaders truly have at heart.
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Old 08-05-2012, 12:24
sayeds33
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You seriously don't need to have an annual holiday. Honestly.

I would skip 2013 and save that money for a rainy day. Perhaps if you dont holiday so often you will appreciate it more too.

Don't just shop at one supermarket, compare prices at home and make a decision. Are there any warehouse shops like Costco around? On some things you can save a fair bit. Work out how much income you get every year and how many outgoings you have every year. You might only spend 35 a month on sky TV but when you consider it costs you 420 a year you begin to question whether Sky sports etc is really worth the money.
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Old 08-05-2012, 12:34
husted
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Osborne is borrowing more money to cut the corporate rate of tax and other tax cuts for the rich.

He has the forlorn hope that these people will invest in the economy to foster growth. But everyone including the OP is trying to save as much money as possible in case things get even worse.

Money borrowed to invest may make a profit, money borrowed for tax cuts for the rich is money wasted.
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Old 08-05-2012, 12:39
jassi
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You seriously don't need to have an annual holiday. Honestly.

I would skip 2013 and save that money for a rainy day. Perhaps if you dont holiday so often you will appreciate it more too.

Don't just shop at one supermarket, compare prices at home and make a decision. Are there any warehouse shops like Costco around? On some things you can save a fair bit. Work out how much income you get every year and how many outgoings you have every year. You might only spend 35 a month on sky TV but when you consider it costs you 420 a year you begin to question whether Sky sports etc is really worth the money.
Very true.

When I was young, back in the '50's, people just didn't have formal holidays, and certainly not several a year
The nearest most got to mediterranean sun was when they had served in the 8th army

However, attitudes & expectations have changed since then.
Austerity is all about making choices - that word so beloved of Tory politicians - should i eat, or keep warm this week?

We've a long way to go before anyone will actually starve, but giving up what one has come be used to is going to be difficult.
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Old 08-05-2012, 13:12
auntiesocial
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We did work in the same place but hubby got made redundant after 23 years in 2008. What a shock, but he was extremely lucky to get temp employment elsewhere within a week of being made redundant and he was made perm in 2010.

We still have some of the redundancy left (about 5 months pay I guess) but I'm starting to get a bit scared about what may be around the corner again with us having gone back into the recession - we may not be so lucky next time around. It started to feel that confidence was returning in the economy and we felt we could relax a bit but everything I'm reading is that it ain't over yet, by a long way and I'm losing confidence in spending for the family now....
Yes, he was lucky. My husband and I were 51 and 53 respectively when we were made redundant so the odds were stacked against us. We sold our home and moved to London for better job prospects, but even the capital is short on jobs at our age. At least our 3 eldest children are all working and I have started my own business which would not have been the case if we had stayed up north.
All I can say is if at all possible start finding ways to make money other than your employment. Start a small business part time, sell on Ebay, anything you can do to independantly earn. Don't wait for it all to go pear shaped before you do that as it's far easier to get going if you have a cash flow.
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Old 08-05-2012, 13:26
Frood
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The problem with austerity measures - which has historically been the call in such economic situations, is that they only really effect the less well off in society.

The well off (and who are the ones who 'control' the economic levers and have the biggest media access?) are happy to call for this as it doesn't touchthem.

Historically economies will recover but normally after quite a long and only when money is actually put back into them.

I wonder if money was kept in, or even added to, the lower end of society would things improve quicker and with a lot less pain for the less well off?

Trouble is, it would hit the richer more - although they'd still be very comfortably off.
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