How to Survive the Credit Crunch

Heres a very good article I found over at MSN Money:

http://money.msn.co.nz/money-expert/?blogentryid=415852&showcomments=true

Money Expert

Crunchonomics: 12 things to do to survive the crunch
21/05/2009 5:17:00 PM, Diana Clement

The credit crunch is set to get a whole lot worse. Or so say economists who predict unemployment is going to rise from 4.8 to 8 percent.

Ouch! That's scary. Anyone's neck could be on the block. But there are ways to survive the crunch with your savings intact.

1. Make yourself invaluable at work. Who would you fire if you needed to cut costs? Would it be the person you can't do without or the one who whinges about change?

2. Build up a rainy-day fund. Three months' living costs give you breathing time to find another job.

3. Add a string to your bow. That means acquiring additional qualifications or experience. Depending on your line of work, you may need to study part-time or you may be able to shadow someone at work to expand your skills. You'll impress your employer and make yourself more employable.

4. Overpay your mortgage or personal loans. This will allow you to take a payment holiday if you lose your job. It's nice to be three months ahead on payments if you can manage it. You'll pay less interest. But do check the fine print to see if this is allowed.

5. Cut out non-essentials one at a time. It's hard to go from spendthrift to tightwad. If you budget, you can cut down excesses slowly.

6. Review expenditure that can get out of hand like grocery buying, power and phone bills. Shopping around can save a lot of money. So, too, can taking simple steps to reduce power and water consumption. You can also quit the gym and re-engineer your wardrobe to make more use of what you already own. Using the Internet is a great way to cut down on costs. You can compare prices and shop for bargains. But beware of buying stuff you don't need on sites like TradeMe. Even better, become a seller.

7. Socialise for less. Hire a DVD and watch it at home with friends, have a pot-luck dinner, make one drink last all evening, meet after dinner for dessert to save on restaurant meals, or go to galleries and free exhibitions. There are endless ways to have a good time and enjoy the free things in life.

8. If you can't get ahead financially, get help from a budget advisor. It's free. The Americans call a budget a "spending plan". And if you think of it that way it's much easier to stomach. This will help you plan what spending is essential and what you can ditch.

9. Earn more. Negotiate a pay rise, get a part-time job or set up a business on the side. Even if you work one night a week in a bar or restaurant, the money will soon add up. If you're smart you can even convince yourself that the work equates to a night out.

10. Be smart with your credit cards. If you always pay off your credit cards on time, you get interest-free credit for up to a month.

11. Rent out a spare room. These days people want more rooms than they have members of the family. If you have a spare room, find another flatmate. Foreign students sometimes pay as much as $250 a week for a room and food.

12. If you're into the property market up to your neck, sell off your least-profitable properties before the bank comes knocking. You can always start again.