Consumers Have Financial Concerns

A significant number of Britons are worried about the country's economic prospects, new research shows.

In the Cracking the Credit Crunch: Recession Veterans vs Recession Virgins study by Fool, it was revealed that 17 per cent of people believe Britain is already in a state of recession. Recession veterans were indicated as being those who have experienced economic difficulties during the past 40 years, with recession virgins yet to face the impact of a slump in the monetary markets. Findings from the personal finance publication also indicated that one in five respondents admit being filled with fear at the smallest hint of an economic downturn.

The drop was attributed to the continuing impact of the credit crunch, which was seen the availability of cheap loans and other types of borrowing diminish. Consequently, just under three-quarters (74 per cent) of Britons claim that they are to change their spending habits to help protect them against a financial slump.

Following an economic downturn it may be possible that significant numbers of consumers develop problems in meeting demands on their finances. Such areas could include home loans, store cards and mortgage repayments.

An estimated 41 per cent of recession veterans claim that recent difficulties in the financial markets have already had a negative effect on their own money management. One in three of people yet to experience a slump are reported to be "clueless" about the predicted difficulties that they may face. In addition, a third of recession virgins believe they are in a fiscal situation where they are forced to go into the red. Furthermore, 33 per cent of Britons state that they are unable to afford saving money.

Commenting on the research, David Kuo, head of personal finance for Fool, said: "The term credit crunch has become a part of our everyday vocabulary over the past eight months but it's instructive to see how people feel about a looming recession. In an economic downturn there will be opportunities and threats and we can take steps to maximise the first and minimise the second. And simple measures such as reining in spending will ensure that we have a pot of spare money tucked away to see us through a slump."

Mr Kuo reported that those who have cash to spare may be able to manage various financial commitments such as making mortgage repayments or investing money into a savings account. "It won't make the credit crunch go away but it will make life more bearable until it does," he added.

Research from Fool also indicated that 31 per cent of people think that a recession will last for at least two years. Some five per cent of respondents meanwhile claim it will carry on for an indefinite period of time.

For those consumers who are concerned about their ability to manage money as 2008 progresses taking out a low-cost loan now could be advisable. By applying for a UK loan it is possible that borrowers can meet numerous demands on their spending at once, leaving them with a single low-cost repayment to make. This may be particularly helpful to those experiencing difficulties in paying their mortgage. A recent study by the Council of Mortgage Lenders revealed that 27,100 homes were repossessed during the course of 2007.

Abbi Rouse is Editor in Chief for All About Loans. Our visitors have access to homeowner loans of all types: From self employed loans to bad credit tenant loans.

Financial Decisions Split Between Parents

Men and women tend to have a fairly equal say in how money is spent within the family home, a new study indicates.

Research released by the Norwich & Peterborough (N&P) Building Society shows that in the 16 subjects studied families tend to make decisions about money together, with 13 areas reported to be addressed this way. However, in the three topics where spending is not agreed upon by both parents, females were revealed to be dominant. The study indicated that women decide how much is splashed out on supermarket shopping in 59 per cent of households, with the same proportion also in charge for expenditure during festive periods. In addition, just under three-quarters (71 per cent) of women are in control of food shopping.

Meanwhile, the building society claimed that men and women often work out spending on "major outlays" as partners. It was revealed that 85 per cent of Britons make a joint decision when moving home, with 78 per cent deciding together on where to go on holiday. More than half (56 per cent) report that expenditure for household bills is managed between them.

It was also revealed that just under half of parents make use of a joint account for their household spending. Research from the financial services firm also revealed 44 per cent of mums and dads take decisions about saving money together, with two-thirds of those questioned setting cash aside every month. The study also indicated that just under a fifth (17 per cent) of respondents claim that they have never put money into a savings account for their families.

For those consumers who are struggling to save for the future, it is possible that they may encounter difficulties in meeting demands for payment on areas such as personal loans and utility bills in later life.

Commenting on the figures, Gary Lacey, group product manager for N&P, said: "Although men are generally the main income earners in a family, it is fascinating to see that most financial decisions are actually made jointly by both the mother and the father. Indeed, this puts the myth of the father as the financial head of the family to rest. In addition, while men rarely appear to have the final say so in matters of finance, women often step up to make the day-to-day decisions with regards to spending on their homes and children. This may be due to the fact that they are the main caregivers or - possibly - because mother often knows best."

For those households which are looking to supplement their finances as the year progresses, taking out a cheap loan could be advisable. In doing so it is possible that consumers can meet costs for areas such as property repairs, electrical goods, holidays and moving home. A loan may prove to be of particular assistance to parents after a recent Engage Mutual study showed that more than half of mums and dads believe they will have to cut back on expenditure for their children due to the impact of rising living costs. It was also suggested that about one in three of those who previously believe they were living comfortably now think they have to reduce their spending.

Abbi Rouse writes for All About Loans where visitors can apply online for tenant loans. We also specialise in homeowner loans, and self certification loans for the self employed.

The Benefits Of Renting Versus Owning

Because of current housing conditions that are currently taking place many people believe that no one should buy a home, at least not soon. That is simply not true. There are some issues that home buyers should watch out for, but those issues, such as sub-prime loans, can be avoided by many working people who have good credit histories.

Another truth is that owning a home today can be just as affordable as renting in many areas of the nation. With falling home prices, the time to buy could never be better.

Here are some things to think about when you are considering buying a home.

Buying a home allows you to begin building equity in the home. As you pay off the mortgage you begin to increase your wealth in the home. This is never true with renting.

You will be allowed to take advantage of tax deductions that renters do not have access to. Mortgage interest is tax deductible per the current IRS code.

Monthly mortgage payments under a fixed rate loan are fairly steady, while a landlord can easily increase your rent.

Homeownership allows you to put down roots in a community and become a part of that community. It lets you buy into the American dream.

There are some drawbacks to homeownership as well.

Maintenance costs will be your responsibility. These costs will have to come out of your pocket and the work will have to be done by you or someone you hire.

During the first years of owning the home it may difficult to sell if you find yourself needing to do so. This can tie up your cash significantly. Also, it is not nearly as easy to simply pack up and move on, as some people like to do.

Your property can increase or decrease in value because of conditions that you have no control over. For example, if foreclosures take place near to your home, your home loses value. Not fair, but that is the way it is.

Building equity is usually considered one of the main reasons to own a home. In fact, for many American, homeownership is the only way they can build substantial wealth. Equity is easy to understand. As time passes and you pay your monthly mortgage an increasing amount of that money goes toward paying down the principle. This means that over time you have more of a share in the home in real dollar value. Later on, you can borrow from this equity if you wish to do so. This borrowing power can be a huge benefit for those who pay their bills on time and find they need credit in the future.

Owning a home also allows you to deduct mortgage interest and property taxes from your federal income taxes and some state income taxes. This is not small change for most people. These deductions can mean big tax savings, especially in the early years of the loan when interest makes up most of the payment. In fact, you may find that with the tax deductions it is actually cheaper to buy a home than it is to rent. You can find current tax law on homeownership at various online sources or through a qualified tax advisor.

Lastly, having a home also allows you to feel more secure in knowing that your family will have a place to live. When you rent from someone else, you may not always be able to renew your lease.

Peter Kenny is a writer for The Thrifty Scot, please visit us at http://www.thriftyscot.co.uk/mortgage/ and http://www.thriftymortgages.co.uk/remortgages http://www.thriftyscot.co.uk/Loans/022008/making-the-most-of-your-equity-1.html