Paying into Regular Savings

It is more important than ever to have a cash cushion to rely on in the light of a credit crunch. Experts suggest three months' salary.

Life Insurance

Life insurance is essential if you own your own home and have a family. If you live alone, or are in rented accommodation, it could potentially be cancelled to save you money.

Pension

When money is tight it can be tempting to stop paying into your pension in order to save money, but pensions are passed on the notion of compound interest – leaving the money away for a long period of time to gain interest. Thus even paying in the bare minimum is essential for a healthy pension fund on retirement.

Holidays

Cancelling a pre-booked holiday can incur a fee. Avoid doing so if at all possible. The era of cheap flights could be coming to an end as the cost of fuel continues to rise. Already noticeable charges exist  for luggage, airport check-in and even onboard food.

Social Life

Shopping, eating out and buying non-essentials are the key areas which are being reduced in light of the credit crunch. The price of basic food items such as bread, cheese, pasta and rice have continued to rise - see below for more details. See the food section for more information on how to keep the cost of food down. Clothes retailers are also affected as consumers are less willing and able to buy non-essentials and stores must reflect this in their prices and stock.

Food /Increased Cost%

Eggs/47%

Salted Butter/62%

Cheddar/25%

Rice/60%

Pork/7%

Bread/5%