Spending Power

The country is in a state of doom and gloom, as reflected in the daily news.

The UK economy is now clearly experiencing one of its worse recessions in recent history; the problems seem desperate and the idea of growth simply out of the question.

The UK jobs market is weakening significantly and, according to labour market statistics, unemployment last month stood at 7.9%, with youth unemployment expected to pass the million mark shortly.

Feeling the pinch in our own lives reflects the stats only too well: holidays have to be through carefully in terms of expenditure; home extensions have to justify the investment; cost cutting shopping is becoming a necessity…

So, is it possible to remain positive about the future given the above?  Is it possible to live life to the full ‘on a budget’ and at the same time to plan ahead for a more prosperous future?

I find myself reflecting on the ‘conservative approach’ my parents took to managing their finances, and whilst at one time I might have criticised them for their extreme caution, I can now see they did not ‘expect’ their money to buy them luxuries and lifestyle – they used their hard earned cash to protect themselves and their family from the ups and downs of life and the most basic ‘costs of living’.  My parents did not have a cheque book, and paid ‘up front’ for what they could afford. My father constantly calculated his incomings and outgoings sitting at the breakfast bar in the kitchen – he knew what he had in his accounts ‘to the penny’.

A return to the old fashioned philosophy – ‘if you can afford it and you need it, buy it’ – is harder for our generation. We’ve been brought to up want more than we have and to try to keep pace with other people’s buying power. By setting ourselves unrealistic aims we tend to create our own financial crises.

Maybe we have to start taking more personal responsibility – myself included.

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