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Am I bing naive to be doing nothing at all about the impending recession?

(23 Posts)
RandomIdiot Wed 17-Sep-08 19:03:54


We don't have savings to fall back on - but we do have reasonable scope for cutting back on quite alot of monthly expenditure.... which I guess is what we are relying on...but not until we need to IYSWIM.

We also have a loan where the repayments will finish in about 4-6m...which will give us extra "income" after Christmas

And we are paying into an endowment for the sake of it continuing (i,e, we could save ourselves a 3 figure sum in DDs per month...and cash it in for a 5 figure sum if necessary).

My company is reasonably secure financially, although redndancies can't ruled out. But in the event there are redundancies the redundancy package is v healthy and there is not much risk that it wouldn't be paid out, as the risk of bankrupcy is probably pretty low. I also have solid income protection polcies to cover mortgage etc.

So I guess I feel that there are plans in place that should see us through teh next cuople of years at least without actively doing anything right now. Am I being Naive?

littlelapin Wed 17-Sep-08 19:07:59

Message withdrawn at poster's request.

onepieceoflollipop Wed 17-Sep-08 19:09:07

I would say you are actually doing quite a lot. (paying in to protection policies etc and haven't overstretched yourselves on loans etc)

I assume you mean that you haven't (yet) made cutbacks like eating baked beans every night and drinking weak squash instead of wine? grin

onepieceoflollipop Wed 17-Sep-08 19:09:57

Also wanted to add are you being particularly extravagant at the moment?

hanaflower Wed 17-Sep-08 19:11:12

Message withdrawn at poster's request.

expatinscotland Wed 17-Sep-08 19:12:13

we haven't done anything because there is nothing really for us to do.

we have some debt on a credit card with a low monthly payment, but that's it otherwise, no mortgage (we rent), loans or the like.

we don't subscribe to Sky, gyms, clubs or any of that.

for some it is business as usual, BUT if this would not be the case for you should one of you lose your job, then it's best to start making some moves just in case.

better safe than sorry!

ivykaty44 Wed 17-Sep-08 19:12:56

Yes you are - your choice though. I would cut back now and have some savings to fall back on if things go tits up. For example three months or four months expenditure to give yourselves breathing space.

Think about the endowment - is it really good or do you just think it is? Endowments aren't going to be doing well over the next few years - should you cash it in?

RandomIdiot Wed 17-Sep-08 19:13:12

I guess so onepiecelollipop..

We are still having more takeawys that we could have.

I think that DPs business (self employed) is actually brining in more that it has in a long time so we are treating ourselves to a few luxuaries. I don't mean mega luxuaries though. We don't actually live a high life...but we are comfortable.

I guess I havn't changed energy provider yet...still waiting for MSE to say it is a good time again.
We are planning to buy a new wardrobe at the weekend which is needed but not essential IYSWIM.

DP is thinking about letting DTDs put laptops on their Santa lists...which again is quite luxurious....

RandomIdiot Wed 17-Sep-08 19:15:17

Our endowment is still on target to pay off our mortgage...somehow. Although we now have a repayment mortgage.

If our mortgage repayments were to double we should be OK with the measures outlined in my OP.

Aero Wed 17-Sep-08 19:17:23

Sounds like you have already thought about this and have at least insurance policies in place, but following our news this week, I'd advise definitely putting away some savings to buy yourself time in case the worst happens. Wish we had! sad

suey2 Wed 17-Sep-08 19:19:36

depends on your circs IMO. Yours sound healthy with minimal debt. But if dh is self employed, I would always have a cushion as others have suggested.
We are in a similar position: both doing better than at any time in the last five years. I still feel on tenterhooks, though

RandomIdiot Wed 17-Sep-08 19:19:45

I appreciate the advice Aero...and I am sooo sorry for the situation you are in.

ATM I really don't think that redundancy for me would be as big a blow as it has been for you. Thats perhaps part of the reason I am less worried.

RandomIdiot Wed 17-Sep-08 19:22:06

Yes once our loan is paid off in Dec/Jan we will be debt free (with the exception of our mortgage).

Oh I think DP might have a smallish business loan with another 12m to run.

Gobbledigook Wed 17-Sep-08 19:23:03

Ooooh, being self-employed is risky in a recession. That's why we are turning thrifty! I'm a freelancer and dh has a large chunk of his income as commission. No sign of anything going wrong...yet...but worth battening down teh hatches, no?

WideWebWitch Wed 17-Sep-08 19:23:10

If you've got enough savings to cover 12 months of expenditure then fine, don't worry. If you haven't, I'd save. We haven't but thankfully have reduced our outgoings over the last year so they really are low and could go lower and we could manage on Dh's salary alone if we had to.

RandomIdiot Wed 17-Sep-08 19:25:03

Our outstanding mortgage is only about 1* my annual salary...

I think my current feelings of relative comfort may be clouding my judgement though.

I obviously am thinking about it though or I wouldn't be posting this.

i guess I am not really worrying about the day to day stuff though like cutting back onfood bills etc. But I am starting to think about things like whether new wardrobes/TVs/laptops are necessary...but I am also thinking "get them now whilst we have the cash"...

RandomIdiot Wed 17-Sep-08 19:27:35

WWW I don't have savings to cover 12m expenditure per se...unless you consider teh endowment or redundancy...which I guess are still full backs...although obviously nothing is guaranteed withh teh redundancy package.

sarah293 Wed 17-Sep-08 19:28:30

Message withdrawn

Aero Wed 17-Sep-08 19:29:17

If your company was ever unfortunate enough to go into receivership though, would there still be a redundancy payment? If your company is financially secure, then chances are you'll be ok, but who knows what's around the corner? I think a couple of months salary as back-up is a good plan.

We really felt we couldn't afford to save, and like expat, we don't have sky, gym membership etc so no savings to be made there and we're careful when shopping already and takeaways are rare.

It's a tough one, but in this climate I feel nothing should be taken for granted and it would be wise to save at least a little where you can for peace of mind if nothing else.

Our news has indeed been a blow, but I'm sure we'll be ok eventually. Thanks for kind words.

SqueakyPop Wed 17-Sep-08 19:30:09

We haven't done anything.

When it was just Credit Crunch, it didn't affect us because we have not plans to move house or ask for any new credit.

The inflation is rather worrying - it is really noticeable. Our budgets are fairly tight, with only a few luxuries (eg bottle of wine here and there). We can do some cutting back. We do have some savings if ends stop meeting.

DH and I were discussing cars yesterday, and we feel that we have a good four years in each of them - so that is a relief.

RandomIdiot Wed 17-Sep-08 19:33:08

I guess that is what i am saying Aero. I think that my company is financially secure enough to avoid insolvency...but who actually knows I am not the accountant.

I guess you could have said the same about Lehman 2weeks, 2months, 2 years ago????

TBH although DP is self emplyed his income, whilst still important is only 1/6 of mine as he is hte main carer...and the effective value of his income is actually less than that as if he didn't work we wouldn't need any childcare.

I am just trying to pull the wool over my own eyes aren't I?

expatinscotland Wed 17-Sep-08 19:50:15

'Yes once our loan is paid off in Dec/Jan we will be debt free (with the exception of our mortgage).'

KEEP paying that loan. You're used to that money being gone every month, so once it's paid, keep direct debiting the money off - to a savings account.

RandomIdiot Wed 17-Sep-08 19:52:14

Thats what we plan.

But that s what we planned for my student loan....and the one that we finsihed paying in July.

Although this time we might actually do it as the current because of the financial climate.

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