With the UK preparing to leave the EU next year, many people are beginning to question the financial stability of our economy and worry that a financial crisis is on the cards.
Since the last financial crash in 2008, measures have been taken to safeguard the banking sector against another crisis, but many politicians are concerned that we could be heading towards another financial meltdown.
One of the reasons why so many people are getting a little jittery is because the availability of ‘cheap’ debt has seen the nation borrowing money like never before. With low interest rates, more consumers than ever have been tempted to take out record levels of loans and credit cards and max out their credit potential.
And with one of the side effects of a financial crisis being unemployment and job losses, it’s a worrying thought that a great deal of us might not be able to service our loans and credit cards should we find ourselves out of work.
So, what can we do as individuals to safeguard ourselves in case a financial crisis hits the UK once again?
Here are a few tips on how to better manage your finances should the worst-case scenario actually happen.
Consolidate existing debt
If you’ve got a range of credit cards, loans or store cards that you’re struggling to pay off, now is the ideal time to try and consolidate these debts. Having one monthly payment with a lower interest rate not only means that you’ll save money that can be used to clear the outstanding balance, but you’ll only need to remember to make one monthly payment rather than several.
Revisit your monthly budget
With the cost of daily living rising at regular intervals, its always a good practice to revisit your monthly budget to see if there are any opportunities to save money. Changing energy providers, negotiating discounts on home and car insurance and trying to get a better deal on TV and broadband services can all pay off. Whatever you save can be put towards paying off existing debts.
Fight the temptation to borrow
Although borrowing money in the form of a loan or credit card is sometimes necessary, there are occasions where we throw caution to the wind and allow ourselves to be tempted by high street retailers to part with our cash.
If it’s not an essential purchase, then either save money for the item over time or walk away; your bank balance will thank you for it.
Make sure you get the best deal
If you do need to take out a loan or a credit card, then make sure that you’re getting the best deal on your borrowing before going ahead. Compare loans that are specifically based on your individual circumstances to ensure that you’re getting a good deal. Look at which source of borrowing is also the most manageable long term and don’t forget to ask questions and look outside of your usual bank or credit card provider to ensure you’re choosing the best product for your financial health.0