- [Shaf] Anyone remember
what they were doing
in the Summer of 2007?
I do, vividly.
I was watching the economy
with a sense of impending doom.
Just a few short months later,
the U.K. was in the grip
of the deepest recession
since the Second World War
and we're still feeling
the effects of it today.
Public spending was
slashed in the aftermath,
wages still haven't recovered
and the worst thing is,
because of the damage that
the coronavirus has caused,
we'll be plunged into another recession.
Don't worry, today's "Ask
Shaf" is going to help you
focus your mind on how to
budget when the recession bites.
(upbeat music)
Let's rewind and have
a quick history lesson
about the last recession.
In July and August of 2007,
our seemingly strong banking
sector began to wobble.
The stock market was volatile
and banks stopped lending to each other.
They were terrified of exposure to losses
on the U.S. subprime mortgage market.
The credit crunch had
began and before long,
banks on this side and the
other side of the Atlantic
were feeling the effects.
Northern Rock, Lehman
Brothers, Bradford & Bingley
were all household names
that fell by the wayside
or had to be bailed out
by their governments.
Much of 2008 and 2009 was
spent in full-blown recession.
In the U.K., unemployment
rose to a whopping 8.3%.
That was 2.63 million people whose lives
were turned upside down.
Global events mean that the likelihood
is we're heading for another recession.
Coronavirus, Brexit,
a slowing U.S. economy
and the Chinese debt
crisis is unfortunately
the perfect storm for
economic uncertainty.
For businesses and in personal finance,
the key thing is knowing
what you're dealing with.
That means knowing your
finances inside out.
The only way to do that is
to go through your finances
with a fine-tooth comb.
Start with your take-home salary
and take away everything you
spend money on every month.
So your mortgage or rent, bills, foods,
and all your direct debits
and standing orders.
You should still have enough
left over to try to save some,
pay off your debt and stick
some in a pension fund.
Once you have your budget,
you need to stick to it.
That's the hard part.
Of course, there are things you can do
to make your money go further.
Modify your lifestyle and cut
back on unnecessary expenses.
For example, if you're
worried about the prospect
of losing your job, it would
be foolish to press ahead
with that extension you want.
Postpone it until things look rosier.
Been planning a month-long trip
to Australia to see family?
Bad idea if your income
is getting squeezed.
Of course, there are
things you can do to add
to your monthly budget
which might give you
a bit of breathing space in a recession.
The most obvious one is
to ask for a pay rise.
If your firm is watching its expenditure,
you might not be successful
but it's always worth asking the question.
Ensure you argue why you're worth it.
The other option is look for a better job.
Sure, there might not be the
same number of opportunities
available in a recession but
there will always be some.
Keep your eyes and ears
open and don't be scared
of jumping ship in a recession.
Do you have skills that you
can make extra money from?
The internet has opened up a
whole new online marketplace
for selling so take advantage of it.
Would you consider joining the gig economy
for some extra cash?
The thought of another
recession might seem scary
but we will get through it.
Sticking to a budget is
the best thing you can do.
Yes, it's boring but
it'll mean you can escape
relatively unscathed if your
income remains fairly constant.
Don't forget to sign up
to my free YouTube channel
and if you have anything you want to see
covered in "Ask Shaf,"
you know what to do.
That's right, just ask me!
(upbeat music)
