When your bubble bursts!

I think that almost everyone has had a rude awakening with all the stuff thats happening with the economy

However, the economic downturn hasn't hit everyone in the way that the last recession did. A lot of people are 'okay'. In their own little worlds, if you; can pay the bills, have benefitted from the interest rate cuts and have made sensible cutbacks in your lifestyle, your own little world could be quite comfortable and potentially be financially better off.

The problem comes when something rocks the boat, for most it's when that dreaded letter is sent or a meeting is called by your employers. It's the infamous, and remarkably unwelcome, 'we need to make cutbacks' theme.

Now what we see on the news is that companies are 'making redundancies and millions more workers are going to be un-employed'. By the sound of the media, all that has ever previously happened is that companies get in to hard times and make people redundant without even thinking about the other possibilities. This isn't the case, I am sure that most organisations look at alternative possibilities

Possibilities that can ease the financial/cash flow burden and still keep the workforce and therefore the expertise in the organisation.

Things like;

• Wholesale wage cuts. If everyone gives a bit, the sum of little from many make a lot.
  
• Offering a reduction in hours if you are in a role that is less busy. This option not only eases cash flow but enables you to be able to earn additional income elsewhere.
  
• Working from home. What is the cost for people to work at work? Of course, their role may not allow them to work from home though.
  

These items on their own could potentially save a job in the workforce. With minimal impact to your own life.

I say that flippantly of course as we, as a nation, have been encouraged to borrow, borrow and then borrow some more to fund a lifestyle based on grossly inflated house prices. The times where we 'needed' to replace our TV with the most up to date version, to get the latest games console or i-pod are now in question.

No-one has been safe and almost everyone was duped in some form or other as our house equity increased, the loans came a plenty, with us thinking we were safe in positive equity, and then what happens? The market crashes and the bubbles burst.

We as a nation and as individuals need to learn our lessons from these troubled times. To start making provisions for these rainy days, to become a nation of savers again and to reduce our own personal debt.

Only by reducing debt can we stimulate spend.

We cannot stimulate spend by borrowing more.

By teaching ourselves and our young ones the value of money and of delayed gratification i.e. saving for what we want, rather then getting it now on a credit deal.

Credit is a useful tool and is sometimes essential, but I have been taught by people various, you should never get something on credit that you couldn't afford to buy. To live on credit is to live on borrowed time.