Recent developments in the global and homeland economy have been turbulent to say the least. The last three years saw the crumbling of major financial institutions in the United States of America, and this has had a huge knock-on effect in all Western economies. The upshot has been that governments, including the UK government, decided that the best course of action was to bail out the banks and building societies that were swept under the tide of irresponsible lending and stock market speculation. But what are the implications for individuals and their savings, and what is the best course of action to prepare for the uncertain future? Although obviously the irresponsible lending and borrowing ought to be a thing of the past, Cash Genie recommends that we all take a leaf out of Douglas Adams’ fictional book, The Hitchiker’s Guide to the Galaxy, which gives us a very important instruction: Don’t Panic!
The economy is at the early stages of its recovery, and experts are unsure as to its stability and timescale. Especially now, in the UK, the argument rages on over the new government’s spending cuts, which are designed to reduce the country’s massive deficit. While many assert that these cuts are a necessary evil to put the country back on its feet, others suggest that the speed and depth of the cuts carry the risk of endangering the recovery and sending the country back into recession. On a more deeply political level, government supporters – including many Liberal Democrats, of course, whose party is a part of the current coalition government with the Conservatives – argue that cuts are being made out of necessity, while others are suggesting that they are ideologically driven by the Tories.
But these political debates are not a part of everybody’s everyday lives. Rather, people are keen to know what the safest course of action is regarding their own money and their expenditure. Whatever the political truth of the matter, there have been early signs that the economy is recovering. Banks are tentatively willing to lend again, and offer a more attractive level of savings interest rates. But sometimes not spending can represent a false economy, if further down the line a reluctance to spend causes greater overall cost.
The best course of action, as in most cases, is to act sensibly. In other words, use common sense. Continue to spend as and when you need to, since, as the famous saying goes, you must spend money to make money. But also, try to keep something aside for a rainy day, regardless of unattractive interest rates. The best advice, as the Hitchhiker’s Guide, and Cash Genie tells us, is Don’t Panic!
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