"Credit Crunch" - the monthly £ impact on your family

[LadyMuck]

Keep on seeing media stories, or non-stories or wannabe stories indicating that families are cutting back on school fees etc due to credit crunch, so I was trying to work out how much the "credit crunch" was affecting people that I knew.

Now if someone has lost their job, then that has huge consequences. But relatively the numbers are still few, and even the worst estimates are less than 1 in 10 being affected in this way.

So I'm guessing many people are being affected by the increase in food costs, heating and fuel. I think that without changing any of my habits I could have been up to £400 per month worse off (£100 heating/£200 food/£100 petrol). And I've benefited from the drop in mortgage rates, though will have lost on paper at any rate in terms of some investments.

We are fortunate that we can absorb £400 per month, and I know many people can't, but in terms of paying school fees, this increase in costs wouldn't mean that anyone I know would be pulling kids out of school soon.

I assume that self-employed people could be seeing a drop in income depending on what they do. But to a family with one or two wage-earners, are there other cost increases that I've totally missed? Our major impact is really the uncertainty both for jobs and investments, but that hasn't yet impacted our income or expenditure.

So without wishing to either dismiss the struggle that families will face due to these cost increases, or if they face redundancy, am I missing some huge implication from the current credit crunch?

Have they not officially announced the recession yet?

'Credit crunch', my arse.

Well I would guess that a lot of people have credit card debts and have been shifting them around on 0% balance transfer deals. If those deals have dried up and people cannot shift the debts, they will have to pay pretty high interest rates on the remaining balance.

That's one example. Will think of some more...

i think the prices of things have gone down remarkably over the last month. pint of beer to one pound in a pub round here ( read in paper) gas and electric were always v. high for is and have stayed the same since moving to a smaller house. petrol has gone down substantially

potentially of course there is the short term equity on the house, but as we were always in it for the long haul ( ou r'working' retirement sans children home) then that doesn't really make any difference - certainly not financially

could have done better on interest rates had we got a tracker - but hay ho - its not gone up in outgoings for us - it just didn't go down.

i like this credit crunch.

also in the last few years people were getting mortgages at cheap discount rates and were overstretching, to, say, 5 X their salary just to get a foot on the property ladder - when it's time for renewal if these people don't have a good credit record they don't have a cat in hells chance of getting an equivalent deal, so their monthly payments will rocket

I'm assuming that that will come in the next couple of weeks Expat - they have to wait for the official Q4 results to have their 2 consecutive quarters!

In terms of credit cards, see the point, though I guess the main issue for refinancing these is that so many providers may have merged.

Hugh implication in our household, Dh works for one of the banks involved in all the stuff recently, and has worked there for over 20 years has never had bonus of less than 15%. This year there will be no bonus, so this will have the impact of if I can't get another contract in the next three months, dss will be taken out of pirvate school at the end of this academic year.

I will have to contact the local schools to see if there are any places and then tha's it. Not major to some people but has reduced me tears on more than one occasion in the last few days.

F*ing credit crunch!!!

We cant sell our house and although we are getting most of it back in rent there is still a shortfall. Dp is going down to a 4 day week, loosing his holiday so not costing us any money but definetly affecting us. There is no overtime any more for dp as well.

We are down at the moment by about £600 to £800 a month. This ironically was money we had earmarked for dd school fees but now she is in the state sector. It is hurting though as I have taken a £500 a month paycut to come down here so we are actually aproximately up to £1300 a month worse of. It hurts!

our mortgage payments are nearly £200 pounds cheaper than this same time last year, so that's a huge help to us. But dh missed a xmas bonus - no one had one at all - in fact there were 20% redundancies and will miss out on one at end of year (April) as well which is pretty significant.

we live within our means so don't really see it affecting anything. won't get our bathroom done though, was counting on bonuses for that.

Sorry to hear that Deegward. Has his nil bonus been confirmed by letter yet? Dh is expecting his bonus to be cut, but we've always invested it so will still have some spare. Dh doesn't hear until mid Jan.

Not confirmed but can you imagine the outctry if HBOS gave out bonuses??? If we got just 10% that would be fine with all our savings etc. Last bonus we took it as lots of shares to save on tax

Surely price rises have been mainly due to oil prices though rather than the Credit Crunch per se?

We're spending about an extra £20 a month on food, but petrol prices are back down to about 2005 levels so better off now in that regard, we have oil for heating so that's come down in price loads, we're more stingy with electricity and shopped around so that isn't costing us any more than a year ago.

I've taken a permanent job in the public sector for security, rather than being self-employed so my income hasn't changed too much although I'm working longer hours for the same money. Dh works for a big multinational who are doing rather well at the moment, so pay and bonus isn't likely to be affected much.

Mortgage has gone down by about £300 a month. However, we had been hoping to use some of the equity in our house to pay for an extension and are unlikely to be able to do that now and will have to do things more slowly.

On balance, we've done OK out of it, but I'm very aware that we're extremely lucky and that there are no guarantees that it will continue.

I had not even factored in fuel prices, but as do now works from home I dont think ut has hit us by too much.

fuel is incredibly cheap (0.88 p) at the moment (considering it was 1.18 last year), ditto food - again, much cheaper than a year ago.

The only increase I have found is in gas/electricity bills

and my mortgage has gone down to £470 - it was at £1040 8 months ago.

Wow laurie that is some drop!

Do you feel better-off Laurie or are you concerned about the future?

Cashwise we haven't been affected really as of yet, but if we are then it will be a large adjustment.

i think as things have shaken out so far we may be better off due to recent changes. dp was in the astonishingly fortunate position of having a pay rise calculated according to inflation the very month it hit its peak. we also have a tracker mortgage which has gone down nearly £200/month. we don't really run a car so petrol's neither here nor there. heating and food costs are biting but not unbearably. i did lose my (very) part time retail job, but that money went to my account rather than the general family one, so it just means i've had to ebay all that stuff i'd been meaning to sell for months so i can have cash for clothes, haircuts etc.

for once we have a small financial cushion - an advance on the mortgage for work that we haven't yet completed which is sat in a savings account somewhere - so that makes me feel more secure now than any time in the recent past tbh. and then just odd stuff like getting the 2002 child tax allowance thanks to the thread here, makes us feel pretty flush and thankful at the moment.

I know - I remember posting on here 2 years ago whining on that we could hardly afford our mortgage as it was half our monthly income.

Now, with a combination of pay rises and interest rates going down it's only one sixth of our monthly income.

We are not affected by the credit crunch at all as yet. Ironically we are financially better off now than we have been in 10 years, mainly due to my earnings going up.

However I am self-employed and DH is an IFA, so we are being careful and saving any spare pennies, just in case.

No, not concerned and I hesitate to put that as its sounds like gloating - it's not, 2 years ago we were going without food while all my friends bought new cars and had fantastic foreign holidays. I really felt like I was living in a parallel universe where we once had 0.20 pence left in the entire world (and no room on credit cards if anything went wrong).

I spent the 0.20p on doughnuts

Now I feel secure money-wise for the first time ever - dh is a teacher. Back then I wished he would get a better paid job, now I'm just so grateful at how secure (and now well-paid) his job is.

I saw this coming......a long time ago.

We got rid of every scrap of debt, we had.

We have a mortgage, we have a small personal loan for the car, and over and above that we owe Jack Shit.

We live in a very affluent part of Surrey. When all around us were going skiing during Mid-Term and hiking in Swiss mountains in the summer, we refused to.

As long as both of us retain our jobs, we will be fine. In fact, mine could go and we would still be fine, but who would pay for the pizzas/ take aways on a Friday.

It affects us in that DH works in the car industry and is waiting to hear whether he will be made redundant at the end of the month. If he isnt, his salary will go down to basic rate pay and there has been no overtime for months. I am a p/t teacher and although this doesnt sound like he would lose that much, it would prob be nearly £200 a month and that is a huge amount to us. We never have any money left at the end of the month as it is.

We are fortunate to have no debt. However our disposable income has gone down as DHs company have not raised his pay in line with inflation and there will be no pay rise this year. At the same time season tickets and other costs go up.

Anyone going on holiday in Europe will also be affected by the fall of the pound against the euro which makes everything more expensive.

Then there is the risk of redundancy which will put many people off buying larger items such as cars or moving house.