The dictionary definition for this is a period of reduced economic activity or more technically, the economy has to shrink over two successive quarters.
In terms of employment this can impact us in various ways. As a direct result of people holding back on spending, companies will be making lower profits, which in some cases will lead to redundancies. During this recession unemployment is predicted to rise to 2.5 ? 3.0 million. As an alternative to redundancies, companies could look to reduce your monthly income by cutting pay, or banning overtime for those who earn it. Either way, this means disposable income will take a hit.
With the redundancy risk, changing jobs is never a good idea as job losses will often be on a last in first out basis. So, think carefully before moving jobs.
On the positive side of recessions, interest rates are likely to drop, making mortgages and borrowing cheaper, not so good news for savers. Price cuts and special offers are likely too due to diminished demand.
To help us through the recession here are some saving tips.
Many people are trying to find ways in which they can reduce the amount that they spend so that they can try and save money each month to make up for reduced income from elsewhere. It is vital to have as much money as possible put aside, and this means cutting back on spending money unnecessarily. Credit conditions during the recession are very tight, so getting additional finance by this route may be impossible.
Start off by cutting back on the amount that you spend each month on non-necessities. You should go through what you spend each month on items that are not bills, rent, mortgage, and other non-essential things and see where you can make cutbacks and how to save cash. Items such as cable TV, gym memberships, magazine subscriptions should all be questioned.
You should also aim to cut back on the amount that you pay out on your bills, as many people end up paying far more than they need to for a variety of services and products. By switching providers you could potentially save significant sums each month.
Many people tend to stick with a particular supermarket when it comes to doing their weekly shopping, but there are alternatives that can be significantly cheaper. Force yourself to go there for one week and you may be pleasantly surprised!
