The First Timer's Guide to Surviving the Recession

29 Jun 2009 Tell a Friend

Recessions come and recessions eventually go but if you were born in the 1980s or 1990s, you may not know what to expect or how to cope during a period of financial uncertainty. This guide gives all you first-timers a few pointers to surviving until the next boom comes around.

Stick to the essentials

Decide what's essential and what's not. A recent survey for CreditExpert, the online credit monitoring and identity fraud protection service, found that half of us have given up thinking about a new car this year and 30 per cent of potential homeowners have decided not to buy a home. A quarter of 25 to 34 year olds have also put plans for a family on hold due to financial restraints and 12 per cent are delaying their wedding. So, if you don't really need a new car but do want to get married, set your priorities, and your budget accordingly.

Bye-bye bling

Bling and ostentatious displays of wealth are out, so you might want to ask your grandparents for tips on scrimping and saving. They've been through harder times than this and survived.

Be money wise

Get a handle on your money. Go through your bank and credit card statements and look back through your major bills. Identify where you can cut back, then set yourself a budget and stick to it. One way of making this easier is to set a budget for the week, take the cash out of your account to cover it and leave your card at home.  This way, you're physically handing over the money when you make a purchase, making you less tempted to overspend.

Know what you owe

It's easy to overlook a credit card, loan or store card account, so take a look at your credit report, which lists your credit accounts and repayment record. It gives you a snapshot of your current position and helps you to identify which accounts are costing you more, which can be closed and which you should aim to pay off.  You can see your Experian credit report with a 30-day free trial of CreditExpert*, with no obligation to continue as a member after this time.

Understand interest

Make sure you understand interest rates - and know the rates you're paying on your loans. Another CreditExpert survey shows that two-thirds of us don't know the interest rate on our credit cards and more than half of us have no idea what the APR (or annual percentage rate) is on our loans.