Credit crunch? Don’t panic!

Everyone is talking recession, recession, recession. It may sound scary and upsetting. But don't panic.

iVillage.co.uk, the UK women’s community site, offers tips on ways in which you can protect yourself during the credit crunch and even profit from it!

1. Get out of debt
Getting out of debt is important in any economic climate, but in a recession getting hold of loans and mortgages is even more difficult, and therefore more expensive. So make sure you sort out your debts as much as you possibly can, as quickly as possible.

There are various things you can do to reduce your borrowing costs and pay off your debts more quickly:

Try to transfer credit card balances onto 0 per cent interest cards to give yourself a break from interest payments and help you make a dent into your actual balance.

If you've got a loan at the moment, see if you can get a better deal elsewhere and switch it fast.

If you are coming towards the end of the fixed-term period on your mortgage, start looking for a new deal straight away. You can sign up for a new mortgage up to six months before the end of your fixed-term period, so if you see a deal, grab it.

If your debt situation is really frightening and you don't know how you're going to get out of it, get in contact with the CCCS, the Citizen's Advice Bureau or the National Debt Helpline. These services are all free of charge and will help you sort yourself out so you can work towards being debt-free.

2. Cut down on your expenses
Firstly, cut your costs the easy way by switching your monthly bills to cheaper versions. Find cheaper gas, electricity, loans, insurance, phone services and other services online. A good way to find out where your money is going each month is by visiting ivillage.co.uk/money/cashflow - a simple tool to plug in your monthly expenses and see where you can cut down.

Take a couple of evenings out and give yourself the goal of saving hundreds of pounds over the year on all your essential bills. Then you need to turn your attention to your daily spending on 'bits and pieces'.

If you think you don't fritter your money away, then keep a spending diary of everything you spend for a month. That way you will be able to see what things you spend on that you don't really need and can cut back on.

You shouldn’t impulse buy or shop. Before heading to the grocer or supermarket, write down the items you need to buy and when you get to the store, stick to your list. Impulse buying can be dangerous to the wallet and slowly eats into your income. Whilst it isn’t always an option, if you have children, do not take them grocery shopping with you. They will want items you don’t necessarily need. If you do need to take children with you, avoid going down the snacks aisles.

It may sound silly as some of these items may be just a few pounds here and there. However, it all adds up and with more expensive mortgage payments, a couple of pounds here and there could make the difference between you keeping and losing your house.


3. Increase your income
There are thousands of ways to boost your income that don't involve taking on another job. If you've got a house, you can rent out a room or a driveway. Renting a room is tax-free income up to £4,250 so it's a great way to make a bit of money and perhaps a friend or two.

The internet is a great resource for making a little extra cash, although it will take a bit more effort than renting a room. You can do online surveys or even make money from shopping online using cashback sites.

If you have items in the home you don’t need, sell your items on an online auction site. One man’s trash is another man’s treasure.

4. See how much you can get for free
Sign up to a mystery shopping agency and you'll get paid to try out products and establishments that you would usually pay for. The pay isn't great, about five pounds a go generally, but you will get free products to test out and free meals in restaurants and pubs.

We all need a holiday, even if it means staying in the UK. Instead of paying for hotels, why not try doing a house swap. It gives you the experience of properly living in another country or area and also is completely free, helping you save funds to spend on other things. Have a look at a home exchange site such as homeexchange.com to get more information about how it works.

If you don't have a house to swap, swap smaller things on websites like swapitshop.com. This way you can get items you need by swapping them for things you don't need, and you won't have to spend a penny.

5. Take advantage of the good side of a recession
'There's a good side to a recession?' I hear you exclaim suspiciously. Well, yes actually there is, namely that there will be bargains to be had and you can take advantage of this.

As consumers become more hesitant to spend, shops and businesses will find it harder to meet their targets. This will put you in a position to bargain, even in High Street stores. There are already tons of restaurants with special offers on Toptable.co.uk, often with 50 per cent off food.

Hotels, travel companies, gyms and other service industries will be feeling the pinch so keep your eyes out for great bargains.

For more money saving tips, visit ivillage.co.uk/workcareer/money

Where is your money going? Use the iVillage Cash Flow tool to figure it out, visit ivillage.co.uk/money/cashflow