Headline news for the last few days on both British and American news websites and televison has been regular reports on the fact we are now crawling out of recession. But what does that actually mean for you and me, i.e. the people that I consider really matter in all this?
If you cut through the headline hype, you can see in the graph above that we are indeed trending towards positive growth again. Economically that is a good thing. We’re not there yet though, and any rebound that caused such headlining is likely to be a short-term blip before settling back down below the magic 0% again to continue its steady rise.
So if the graphs and news readers suggest we’re heading towards growth again, does that mean we safe now?
Unfortunately not. The sad fact is potentially millions of jobs remain at risk. You only have to flick back a couple of posts to see my own plan for possibly being made redundant. Hundreds of thousands of people in all sectors still face this risk and will continue to face it for years to come. But if we’re ‘out of the recession’, why is this?
Positive GDP growth does not equal safety – the output of the country may increase but that does not automatically mean jobs become safe. We as a country are almost bankrupt (3rd most in debt government in the world), and that means the likelihood of significant, prolonged public sector culling as our government attempts to pay off its own debt.
Some may view this on the whole as a positive step – myself included (despite being a public sector employee) – as we have hundreds of roles employing thousands upon thousands of people all over the country that fulfill little purpose (what exactly does a “Young People’s Sexual Health and Teenage Pregnancy Coordinator” do? It sounds illegal, or at the very least, highly immoral).
When the country recovers from recession; personal recessions continue – If we hit the magic positive growth and keep it there, but you lose your job anyway, is the recession over for you? Of course not. Recessions cover both countries and individuals, and affect both in profound, life-changing ways. It took a decade to get into this mess, and I suspect it’ll take at least a decade to get out of it again, if not significantly longer.
Despite this, it is important to stay positive – despite the doom and gloom of this post, it has a positive meaning: be prepared. You’re going to be in one of four employment categories right now:
- Employed, and perceive your job as safe.
- Employed, but know you’re at risk.
- Employed, and have already been served redundancy notice.
- Unemployed already.
The important message is it is never too late to prepare.
“I’m employed, and my job is as safe as houses!” – If you think you’re safe, recession proof yourself now with plenty of time. You are in the best position to maximise and continue your perception of safety with the added bonus that even if you do not end up making use of everything you do, you will be financially much sounder for it. Keep reading, as implementing the ideas below as well as planning for the possibility of redundancy, will save you from the mad rush later should the worst happen.
“I’m employed, but I think I might be at risk.” – If you believe your position or entire company to be at risk, you definitely need take action now. This is where I’m at. We might not be in the best position, but all is certainly not lost. Now is the time to knuckle down and:
- Pay off as much debt as you can (or ideally, all of it)
- Create your own personal SCRAM Plan
- Cut your monthly spending as much as possible (switch utilities, get rid of that ‘premium’ bank account costing you £25/month to operate, knock down your mobile phone price plan a notch)
- Continue to work hard. Just because you’re at risk doesn’t mean it’ll happen
- Keep your head down. Now is not the time to sponsor wild ideas or start fights
- Do be noticed at work for the right reasons – i.e. doing well, being on time, well turned out and polite
- Build a 1-month emergency fund that can be accessed quickly
- Throw all other surplus cash into a high interest, maximum 30-days notice savings account.
“I’m employed, but not for much longer.” – If you’ve already been served notice, despite what you might think, it’s still not too late. You hopefully have at least one payday to come yet, so now is the time to start making massive lifestyle changes, batten down the hatches, and really start to recession-proof yourself:
- Negotiate an improved redundancy package
- Cut your costs in all areas of your life (i.e. downshift your food).
- Implement your SCRAM plan
- Continue to pay off debts while you still can
- Talk to your lenders. They’ll want to help you
“I’ve already lost my job. The situation is hopeless.” – If you’re here right now, firstly, I am sorry. Hopefully you got some sort of package from your employer; This may include retraining grants, lump-sums from holiday owed, or perhaps just the statutory redundancy pay. Whatever happened, you still have options.
- You must talk to any remaining lenders urgently. Advise them of your position.
- Send them a copy of your budget. (Use the Statement of Affairs Calculator).
- Once you “know what you owe“, work out what you’re entitled to. Don’t forget JobSeekers Allowance.
- Take stock. What assets can you sell? (Second car? Clothes? Books? DVDs? Electricals? Gold?)
- Update your C.V. and hit the job market. Any work is better than no work.
- Consider alternative revenue streams (blogging, car boots, auctions, leafleting).
- Reclaim bank charges. You could be owed thousands under the Financial Hardship ruling.
- You can do the same thing for Credit Card Charges, too.
- Activate any Payment Protection Insurance you might have on outstanding loans/credit cards/mortgage.
- Check you don’t have cash you’ve forgotten about in banks or building societies.
- Have a room spare? Look for a lodger and up your income by as much as £300 per month.
Wherever you are at in your personal recession, there is no time like now to take positive steps. Remember, it’s never too late to take positive action.
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