How the credit crunch has bitten me (How has the Credit Crunch affected you?)

Member Name: yackers1

Product:	How has the Credit Crunch affected you?
Date:	14/01/09 (327 review reads)
Rating:

Advantages: Changed my attitude to spending which will stay with me

Disadvantages: Far too many to list

Many of you will know who I blame for the recession.... Sorry, credit crunch - the banks. Between them they managed to produce a large credit bubble that engulfed many consumers along the way that has been waiting to burst for a while and it finally has. Now the banks financial year end is over and (hopefully) they have filled the holes that should have appeared in their accounts they will start lending to each other, as well as the general public, and get the economy going once more.

I think that the credit crunch has affected everybody to some extent or another. Whilst some people have been hit really hard, others appear to have suffered minimal effects.

Whilst the credit crunch has affected me in many ways the significant ones are as follows:

****Redundancy****

I work (I guess that should now be used to work) in corporate finance and this is a sector that is largely dependent upon the economic climate and the availability of cash. When times are good and the banks are actually lending cash then there is plenty of money sloshing around the economy and merger and acquisition activity is rife.

As the economy slowed down and loans were becoming harder and harder to obtain the activity slowed right down and deals started falling apart. My department became increasingly quiet to the point where there were no deals on the go and nothing in the pipeline.

In hindsight I should have read the signals and started to look sooner, but I just didn't think. Besides, I thought that I would be shifted in to a general accountancy department instead I was shown the door.

Redundancy is a horrible and stressful thing, especially around the festive period, and I wouldn't wish it on anyone. There is always a light at the end of the tunnel though and I now see this as an opportunity for a change. As one chapter finishes another always opens.

****Grocery shopping****

In order to save a few pennies we have taken on the brand challenge. This involves buying a brand lower than you usually would buy. So if you usually buy a premium brand then you buy the super markets own. If you usually buy the supermarket own brand then you would buy the value brand.

I have found that in some cases it is possible to buy two brands lower. When dealing with bulk up items, such as tinned tomatoes, then I have no problems with the value items. Ditto with any items whereby you add spices or other flavours to enhance the food. However, there are some items where only the premium brands will do. I have tried the brand challenge on these items, but I just don't like the cheaper alternatives.

In addition to the brand challenge I now try to make a lot of dishes from scratch. Instead of buying ready made curry sauces in jars, I now make my own from scratch (please see my "homemade curries made easy review" for details of my madras recipe). The jars cost around £1.50 whereas a curry sauce made from scratch costs around £0.40. In addition to being a lot cheaper they are also a lot healthier, and it is satisfying making your own food from scratch.

Supermarkets are the most likely places that consumers get exploited. All the so called offers of buy multiple items for less, and buy one get one free only makes customers spend more money on items they probably wouldn't buy. Do you really need multiple items? Do you usually buy the product?

I saw a prime example of the above during a recent supermarket trip whereby a lady put two jars of sweet and sour sauce in her trolley. Her partner immediately took them out and questioned what she was doing stating "we never eat this" and the reply was "But it's buy one get one free". Does this sound familiar? I know I have done it in the past. To ensure that I don't spend more than is totally necessary I now take a list and only buy what is on that list. There are no impulse buys whatsoever.

****Clothes shopping****

When I was younger I used to only buy designer labels and branded items. I would never buy anything that was unbranded. Whilst my buying habits changed as I got older I guess I was still a bit of a snob.

Since the purse strings have tightened I now find myself scouring the supermarkets for clothes, and I must say that I have found some really good stuff for not much money. The quality is very good too and you don't get pretentious and pushy assistants forcing themselves on you to sell some clothing. In my opinion it is as clothes shopping should be in that you make the decisions and not have people all around saying "oh that looks lovely" when you damn well know that it is too tight on the thighs, the legs finish above your ankles and the colour is all wrong.

I know that supermarket brands such as George and the like do not sound as good as "Diesel", "Hugo Boss" or "Levi" etc. but then unless you actually look at the label inside the clothing you're not going to know where you got it from.

****Other spending****

The credit crunch has made me question every single purchase I make. Before, if I saw something that took my fancy then I would have bought it. I was mad about gadgets and bought some real 'rubbish'. You know the items that are great fun for 5 minutes and then they are put on the shelf and forgot about.

Before any purchase is made I now ask myself loads of questions. Do I really need it? Have I already got an alternative? (e.g. if buying a tie for a particular shirt have I checked to ensure that I haven't already got a tie that will go with it?) Can the item be bought cheaper elsewhere? Do I have the funds to buy it?

This situation has taught me to shop around for all items from insurance to white goods to trinkets. The internet is a fantastic tool and enables the consumers to get great deals through the many comparison sites available.

****Days out****

Days out used to involve going to expensive attractions, such as theme parks, sea life centres, zoos or just going to Great Yarmouth and spending a few hours in the casino or in the arcades gambling. As well as entrance fees or 'playing money' in the case of arcades money was spent on food, drinks and other useless trinkets and souvenirs. All of this added up to an expensive day out.

Days out now include cheaper activities such as mountain biking, walking/rambling or using my other half's dad's boat on the broads (red diesel costs very little and lasts for weeks in such a small boat). We take a packed lunch and drinks with us to keep the costs as low as possible. Whilst this alternative sounds boring I now find I really like it. It is great to get out in the fresh air, see some great scenery and actually get fit in the process.

We still have the occasional day out at a theme park or popular attraction but these are few and far between and it is now considered a treat.

****Meals out and take aways****

Prior to the credit crunch if neither of us felt like cooking then we would go for a take away or go out for a meal. I'd hate to think how much money we have wasted in the past on this.

Now we force ourselves to cook, or we go hungry. And yes, we did try the latter but we only did it once.

Cooking at home is actually quite good fun and it is something that we can both do together. An hour in the kitchen gives us a chance to actually talk and communicate other than spend it in front of the idiot box watching mindless trash. In addition, it has encouraged us to be a lot more healthy and learn to appreciate food more.

****Utility bills****

I am the first to admit that prior to this situation I would leave lights and electrical appliances on, "waste" water and turn the heating up so high that it was only bearable whilst I was wearing just a pair of pants (not a pretty sight).

This situation has made me a lot more careful and sensible. All lights are now turned off, as are all electrical appliances and the heating is nowhere near as high and we put additional jumpers on instead.

****Conclusion****

On reflection the credit crunch (or the recession) has been an eye opener for me.
Whilst it did affect my Christmas and New Year (through the stress of redundancy) it has made me more aware of my spending habits and has shown exactly how much money we used to waste. The above demonstrate a few ways in which my spending habits have changed.

Hopefully the credit crunch will be over soon, the economy will pick up and we will all prosper once more. I have learnt many lessons during this tough time and during the next boom I will continue to live as I am now, just in the knowledge I will have the spare cash available to be occasionally frivolous.

Summary: Thank you Mr Brown, HSBC, Lloyds, Northern Rock, Natwest and all the other banks.