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.