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Surviving the credit crunch

Jan 31, 2011

Worried about your finances and the rising cost of living? Start talking. Talk to your lender, your bank, family and friends. Share ideas and explore ways of reducing expenditure.

If the credit crunch has you in a pickle, here's our guide to help you ride out the storm:

Home front

If you're having trouble managing your mortgage repayments, ask your lender if you can change the terms of your mortgage or take a repayment holiday. There may be other ways to help towards the cost of your mortgage, too, such as taking in a lodger.

If you are managing your mortgage repayments but are worried about the value of your property - sit tight. Unless you need to remortgage or sell your home, its current value is just a statistic. House prices will rise again, even though many experts predict that the present slump may last until 2010.*

In the bank

If you've had the same current account at the same bank for many years, ask your branch for a review. If you pay a fee for a particular account but don't make use of the associated benefits, you could save money by switching to an alternative. Check out the competition, too, as another provider may be able to offer you more.

Seek advice

If you are worried about debt, you can get free and independent advice from a number of organisations, such as Citizens Advice, Teacher Support Network, Shelter and the Consumer Credit Counselling Service.

Don't panic

If you have savings and are concerned by all the news reports about the global financial crisis, remember that deposits with all UK banks and building societies are covered by the Financial Services Compensation Scheme up to a new maximum of £50,000 per person.

Mutual advantage

Building societies and other mutual organisations don't have shareholders and tend to take a cautious, responsible approach to lending. No investor has lost money with a building society since at least 1945 and probably for a long time before that**.

Live within your means

The boom of the last decade or so has resulted in many people buying what they want, when they want it. These challenging times, however, are forcing people to return to a lifestyle of buying what you want, when you can afford it. If you have credit cards, pay off what you can each month and try using them in emergencies only.

Waste not, want not

It may be a cliché but there's wisdom in the old saying. With the cost of food on the rise, save leftovers in the fridge and try cooking a larger quantity and freezing a portion or two for another meal.

Shop around

If you're loyal to one supermarket and usually do one big weekly shop, give alternative outlets a try and compare prices and offers. If you're able to, shop for food on a 'little and often' basis and buy only what you really need. Shopping closer to home could save fuel, too.

Save energy

Petrol, gas and electricity prices are peeking, so anything you can do to reduce your consumption will help to keep bills down. Consider walking shorter distances rather than using your car and reduce the times that the heating and hot water are switched on.

For more ways to save money day-to-day, check out our article 'Top Tips to Save Money' here: Money Saving Tips

For more information about building societies in the UK, visit the Building Societies Association www.bsa.org.uk .

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