Tuesday, August 12, 2008

Credit crunch

So how is it affecting you?

I was interested to read this article yesterday, saying that the food bill for the average family has risen by £27 a week, as that is exactly what I had thought. We are an average size family (although two teenage boys do eat more than average...) and I was only thinking last week that I seemed to be spending around £25 a week more, even though I don't shop extravagantly.

Then of course there are the fuel price increases. We are a two car family but getting rid of one is not an option, as Hubby uses his for work and I need my tiny old car to taxi Son 2 around, even though I use public transport myself whenever possible. We use the washing machine and tumble dryer at least once a day because of the mess Son 2 creates, though we haven't replaced the broken dishwasher. The house needs to be heated all day in winter as I work mainly from home. Our council tax is already huge and will no doubt increase even further.

But in many ways we are lucky. Our mortgage is finally paid off, five years early. We had a deliberate policy to make the most of a more prosperous cycle (Hubby, being originally an economist, is quite tuned into the cycles of the economy) and were also lucky enough to inherit some money to pay off a chunk. So we are not going to get caught out by rising interest rates or the need to find a new mortgage at the end of a fixed rate deal. Although house prices are falling, our house is still currently worth about twice what we have spent on it. After all, what is most important is having a place to live and it is just about big enough for us all (though the conservatory plans are on hold temporarily).

We live for now. What we don't have is adequate pension provision, because living on one and a little bit salaries we can't afford to pay into pension plans. Our eggs are all in one basket as far as work is concerned, since I am also employed as a very part-time accountant by Hubby's company, so if it were to fail we'd lose both salaries at once. He works in an industry that is already seeing a huge downturn, though the nature of his work is perhaps more recession proof than some. We are about to lose child benefit for Son 1 as he is not going to college yet. The complications of the benefit system and the need for after school and holiday care restrict my own earnings capacity, otherwise we could end up worse off by losing my Carers Allowance.

We are OK for now. We are not in debt. We do have some back up savings from the days when we had two well-paid jobs. But I believe the credit crunch is real and it will hit us all hard next winter when our power bills increase. I just pity anyone trying to move house or get on the housing ladder.

Three notable things:

1. Working with the BBC webfeed of the Olympics on in the background and celebrating welcome early British successes.

2. The kindness of the staff who look after Son 2 on holiday playschemes.

3. Trying not to worry too much about the news that my mother is displaying some worrying symptoms of confusion. Best to wait until she has seen the consultants and we find out something more concrete.


Jenny Beattie said...

Cathy, I noticed how expensive everything was in the UK, but we're seeing it here in Thailand aswell. We're just relieved we kept our house and rented it out while we're out of the UK.

Cathy said...

Yes, it really is global this time. Very wise to keep your house, you'd never have got back into the market otherwise.

I bet London prices shocked you the most, they shock me too!

Anonymous said...

Ugh *shudder* the credit crunch, definitely feeling it here (I've just cancelled a bunch of pre-orders on Amazon sob for that very same reason). Our original about £50 - £60 weekly shop (of course plus the cost of milk and bread etc. during the week) crept up to £80+, I've managed to rein in back to £50 - £60 by cutting out a lot of meat etc. and menu planning. I shop online and if it's a good week and I've managed to get the bill to £50 it's literally arms jubilantly in the air, dead chuffed with myself that I've managed the weekly shop with that.

We're lucky with fuel bills, rarely use the car (and cutting back on it even more) and have a newish very economic boiler, plus I suppose a benefit of our shoe box it costs less to heat!

We're really hoping for the youngest qualifying for DLA though, we need it more than ever to justify me staying at home. If we don't get it I'll have to consider finding more permanent work and the thought of trying to get Boy Lacer into childcare . . .

Cathy said...

Lacer, I'm very impressed that you can get your bill anywhere near £50 I spend much more than that, though of course I have two very carnivorous young men here I'm afraid...

Re DLA, yes he should qualify and if he gets given middle rate care you could apply for Carers Allowance. The NAS has a factsheet I think about filling in the DLA forms for children with his type of issues...or email me if you want!

Deborah Carr (Debs) said...

Usually I think it's the papers doing a bit of scarmongering but this credit crunch thing has really bitten everyone it seems.

I can tell the difference in such a short time as everything keeps going up and up.

Casdok said...

Im feeling it too, especially now that C has moved into a home and all his benefits have gone with him.

I hope your your mother is ok.

Kate Lord Brown said...

Wise words - we got out of the market and have found it impossible ... Still, I think those of us writing have always been good at juggling, making a little go a long way and enjoying the dance whatever life throws at you. Great blog.

Cathy said...

Debs and Casdok, I am amazed when I read that some people don't think the credit crunch is real...can only assume that they have so much money they don't notice the price rises!

Kate, welcome and thanks.

Chris Stovell said...

Hi Cathy,
Popped by to say that encouraged by the positive feedback I have signed up for OU215! Thanks for your help.

Credit crunch - badly hit by fuel prices out here in the sticks and we also have to stare at the very hungry green monster in the garden aka the oil tank.

I do hope that your Mum proves to be fine.

Cathy said...

I'm glad you are going for it Chris. I'm sure you'll enjoy it and you already have a head start.

Jen said...

Ugh, rising food and fuel bills are truly beginning to grate - not to mention that National Insurance went up couple of months ago and, even on my humble salary, that's an extra £60 a month I haven't got.

And don't even mention the fact that I sold my house a couple of years ago and now I can't buy another.

It's just really not fun, this being grown up lark. Luckily, all we need to write is jim-jams and Kit-Kats.