No sign of the recovery
How Money Can be Saved
The markets are usually a good indicator of the future economic prospects and if the current volatility is anything to go by, we are indeed in for a shaky next few years.
Political leaders are struggling to come up with either the cash or the ideas to kick-start the global economies back into growth following the last recession and financial crisis.
Without either of those, the prospects are for flat line growth at best and double dip recession at worst. There are even doubts now as to whether China and India can continue to grow even at modest rates given the reduction in global demand.
So for the general public, that means uncertainty in just about every aspect of personal life. Job prospects are weak, wages stagnant or falling, inflation is rising fast and savings rates are at record lows.
This is not an appealing outlook for anyone, whether in the private or public sector. So, the domestic focus has to be on cost effective living and preserving whatever resources one has and saving money wherever possible.
Doing our bit to kick-start the economy means spending but doing that within a constrained budget means generating some cash from somewhere and getting the best value for money we can.
Financial products and services have changed significantly over the past few years. There are fewer providers offering less products but that does not mean that there aren’t bargains or deals to be had.
Just reviewing the credit cards at money supermarket will show what deals are available and how money could be saved. Whether it is a balance transfer deal or a new card, there are good offers available.
Even those with less than perfect credit histories may be able to benefit from some of the card offers available as lenders are still seeking some perceived higher risk account holders to balance their portfolio.
For investors, the outlook is less certain. Knowing when the market has bottomed is an art best performed in hindsight. Only invest in the stock market if you are prepared to lose some of the funds.
But for those with a long-term view, it could be a good time to buy shares or get into property. Both have excellent long-term growth records. Whilst some commentators doubt that the future growth rates will get anywhere near those enjoyed in the past, they may at least give a better return through rent or dividends than ordinary savings.
For those already invested in the market through pension funds or savings, there is little alternative but to ride out the turbulent times and hope for a better future.
Retirement planning has undoubtedly been severely hit and many pension funds will be under funded as a result. For those with more than a few years to go to the end of a working life, working hard and diversifying investments is probably the optimal strategy.
Politicians and governments need to be weaned off the debt habit and rein in public spending. There appears to be limited appetite for this approach as most fear electoral backlash.
But without credible fiscal plans that generate confidence and encourage businesses to invest and grow we are not likely to see favourable conditions for many years to come.
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