So what does this credit crunch mean for people?

[sammysam]

Dp and I are completely clueless about the economy and as we are young we have never really seen a recession (only as children), We want to know what it means for us...we understand if you have debts then you are going to suffer quite a bit, but we have no debts at all (only our mortgage), so what does it mean for us? Dps job is quite seccure (touch wood) so is it just a case of riding it out? I suppose the main issue for us is that we would like/need to move house and i have inherited some money that a year ago would have enabled us to....but now that the housing market isn't moving I can't see that happening for some time...or could we be lucky?
What I am really asking (and hoping) is if you don't have debts will you be ok-or is that very naive? Sorry for the ramble!

My understanding of the recent big spikes in inflation, is that much of it is down to rising fuel prices which in turn are partly down to people investing in oil because of fears over the state of the American economy. However, food price rises are also to do with things like crop failures and an increase demand for food from places like China and Asia. These countries have also increased their demands for raw materials which has increased manufacturing prices and thus price rises in the shops. If the world economy suffers (as looks likely) then demand will fall which should result in lower prices.

Practically for my family:

My business's turnover has dropped by 50% in 6 months
I have laid off 3 staff & made 1 redundant
I worry about paying the mortgage/bills

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I worry about ds job, rising costs, paying the mortgage, having 2 dc to raise...

dilemma - to be entitled for benefits, i think (maybe i'm wrong) they assess you on your savings as well as income!

mumfor1standmaybe2ndtime! I agree i find lots of empty shelves, my thinking is that supermarkets are busier as people aren't eating out as much....

i wonder if we all might ultimately gain from the results of this. I don't mean for those who lose their jobs - not at all - but if we all start to rein in our spending and start to have more frugal aspirations.

we've started to be so much more thoughtful about spending - choosing a picnic day out that costs nil over trip to expensive theme park for example so we spend more time with the kids!

Better for the planet too.

For me,it means that I have lost a days work a week & that adds up to a lot of lost income.I'm a self employed gardener & have always been snowed under with work.Until now.The past 3 months I've lost 2 customers,who have had to cut back,and there is no more work about.It's a good job that we have always been frugal,as we are certainly going to have to be for the forseeable future.

George - can you offer to work single days doing autumn "tidy ups"?

Dhs of 2 good friends of mine have just lost their jobs. Neither saw it coming. One has a young family, the other has their first baby due very soon.

It is very hard to feel optimistic about the near future imo.

Thanks Grammaticus.I have ordered some business cards and as soon as they arrive,will start visiting notice boards,post offices ect.I've never had to advertise before,so I guess I've been very lucky in the past-all my work has been reccomendations.

I'm still getting people saying that someone they know needs a gardener & can they pass on my number,but for the first time ever,the phone isn't ringing.I've never known anything like it.

sammysam if you've inherited some money that you were going to put towards a house, agree with others that you shouldn't move right now - everything will be cheaper in a year's time and while that means your house will sell for less, if you are buying somewhere bigger and more expensive that will have fallen even more in price relatively speaking ifyswim.
(eg if your house now is worth 200k and house prices fall by a quarter, you'd have 'lost' £50k; but if the house you wanted was worth 300k it would have fallen by a quarter too ie would be £75k cheaper. so you would still be doing pretty well)
but in the meantime be careful where you put the money if it is a lot. dont invest it in the stock market, and if there's more than £50k in cash either spread it between different bank accounts or bung it all in Northern Rock which is specially protected. bank deposits of up to £50k are now protected by government but in theory deposits of more than that could be lost if another bank collapses (tho in practice very unlikely govt would let this happen)
and dont worry too much. we can all work ourselves up into hysterics (i've done it over the last few days) but can't know exactly what the future will bring. just carry on being sensible about debt, sit tight and ride it out! if you have some cash cos of the inheritance you should be in a good position eeven if your dh does lose his job

I'm sorry to hear that some of you are struggling-from watching the news it looks like it will effect all of us soon
Woodstock-that makes sense-dp had always said that surely if our house had lost money it would all work out the same-i hadn't thought about it in percentages
The money is not enough to worry about re savings etc so thats one less thing to worry about!
And yes you are right-at least if things did get really bad we do have something to fall back on.
Does anyone know if we should pay it off our mortgage (the max we can overpay in a year) as we could always take a payment holiday if things got bad? Or should we just bank it?