Saturday, 6 September 2008

All change (yes, again)!

On the news this morning we are told that the credit crunch, by which I assume they mean the general downturn in the economy, will last until 2010. So we are probably in for a rough time but hopefully not for too long. Can we ride it out?
Yesterdays paper (I haven't been wasting my money - I read it at Mums house!) noted some of the more shocking food price increases that we have seen since January. Over 40% for some.

Pack of four croissants: +47.4%
Original/Bolognese pasta: +46.2%
Ham (125g pack): +45.4%
Chicken breasts (skinless): +42.6%
Basmati rice (500g): +42.1%
Medium whole chicken: +41.9%
Mayonnaise (400g): +40.6%

On top of that we know that petrol has gone up by 30% and then down again a bit (but not much). British Gas are increasing power costs by over 30% and so it goes.

Meat and fish: +22.9%
Store cupboard/general: +15%
Fresh fruit/vegetables: +14.7%
Laundry/washing/paper: +14.4%
Drink: +6.8%
Pet food: +6.5%
Bakery/cereal: +6%
Frozen food: +5.8%
Household: +4.4%
Health & beauty: +0.4%
Ready meals: -0.4%
Dairy: -1.8%
Baby food: -2.5%

Shame we dont need baby food or ready meals.

Beloved and I have been discussing how we are going to cope. He would also like some money towards an investment which he doesn't want to miss out on. I have mentioned before that where he comes from (Syria) it is more normal to invest in property to secure your future rather than a pension scheme. So he has some ideas to secure our future but of course they will cost us now instead.

Our biggest expense is out mortgage. Our assets are worth considerably more than our liabilities (mortgage) so if it get really tough we could sell something and we would be OK but the future is an unknown place as there is a good chance things will get harder not easier. Instead I have been thinking about changing the mortgage. I would like an offset account. I have to pay some bills periodically so from time to time I can have quite a bit in savings. I we had an offset mortgage this would reduce the amount of the mortgage that we are paying interest on. We currently bank with Abbey and Abbey do have an offset mortgage now available so I am going to enquire about it details. The mortgage which I like the look of is a Bank of Scotland product so maybe this is the way to go but first I check out Abbey.

I explained to Beloved that the boys and I had already started cutting down on our energy usage in the home. He tends to think all of the things are unnecessary and we should be able to have everything that we want,but for once the shock headlines have worked in our favour and he realises this time he has to change. So this time he falls in with our plans. I also went though with him the advice published to ensure your car is running as economically as possible - guess what? He is finally going to take the roof rack off. Amazing.

Next we will meal plan together. I have plenty of ideas and a few rules, but we must find a way which works for all of us.

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