How to survive the eurozone meltdown
The euro is in chaos. Greece is going through hell. Spain, Portugal and Italy are on the edge. Experts talk of emergency, catastrophe, armageddon... but what does it mean for you?
There's no point asking the Government, it doesn't know. So this urgent task has fallen to me.
You need to protect your savings from another full-blown banking crisis. If you have less than £85,000, panic over, you are already covered. Provided you hold them with an FSA-registered bank, they are 100% protected by the Financial Services Compensation Scheme (FSCS).
If you have more, spread it between different banks. Watch out as some banks have several different brands, but qualify for just one FSCS payout, notably The AA, Aviva, Bank of Scotland, BM Savings, Halifax, Intelligent Finance and Saga. If you have more than £85,000 with these banks, switch the surplus elsewhere.
Santander UK is protected by the FSCS, but other EU-owned banks are not, notably Bank of Cyprus, and the Dutch-owned ING Direct and Triodos Bank. Under EU law, you have up to €100,000 of protection, but have to seek compensation from the local deposit protection scheme. Remember Icesave? It could be an anxious wait.
2. Destroy your debts
In tough times, you have to be ruthless. Love your savings, but loathe your debts.
3. Kill bills
And while you're at it, kill those bills. Remortgage to a cheaper home loan. Find the UK"s cheapest energy deal. Get dirt cheap broadband. Slash your supermarket delivery costs.
That's the spirit. If you keep it up, one day you might learn to love your bills.
Keep calm, and carry on killing.
4. Avoid unnecessary risks
There are times in life when you need to take risks. This isn't one of them.
Say you are thinking of buying your first property. If you have found the perfect place, can afford the monthly repayments and feel relatively secure in your job, you should probably still buy.
But if you're overstretching yourself, worried about work, or would struggle if mortgage rates rise, think twice. Unless you're buying in prime central London, house prices aren't going anywhere. Time is on your side.
5. Go on holiday...
Take a break from the eurozone crisis by taking a holiday in... the eurozone!
When the going gets tough, the tough get going. On holiday.
6. ... but carry protection
Local strikes, riots and civil unrest could cast a cloud over your fortnight in the sun. Before taking out travel insurance, check what cover your policy offers.
You should also protect yourself in case your tour operator or travel agent goes bust, by booking your trip through a member of travel bonding schemes ATOL and ABTA.
If you book your flights and hotel separately, you don't get that protection. That's why you should pay with a credit (NOT debit) card. If you spend between £100 and £30,000 on Visa or MasterCard, the issuer is equally liable for any losses, say, if your airline collapses or hotel closes.
This protection is the result of Section 75 of the Consumer Credit Act, which you can find out more about in this article.
If the euro is plunged into crisis while you're away, what happens to your holiday cash is anybody's guess. Consider packing some emergency pounds or dollars.
7. Keep your head
Private investors are fleeing the stock market in droves, but do your best to stay calm. Unless you need the money in a hurry, the worst thing you can do is sell your stocks and shares ISAs now. That way you will only crystallise your losses. And you won't claw them back when markets finally rebound.
If you're feeling brave, buy on the dips instead. Shares are nearly 12% cheaper than just three months ago. Markets could fall further, so don't commit all your money at once. Then hold for years.
The recovery could take time, but it will come.
8. Go shopping
If you have a little money to spare, it is your patriotic duty to help your fellow citizens. A little bit of consumer confidence can go a long way.
Your high street needs you.
9. Feed your career
You may grumble about your job, but you need it in a crisis. Developing your career is easier than you think, according to new research from professional network LinkedIn. It takes just 10 minutes a day.
Updating your CV, building networks (both offline and online), maintaining relationships, publishing an article, starting a blog, speaking publicly and getting to know your clients and competitors can raise your profile and boost your career. So you think networking is for nerds?
It is cooler than being unemployed.
10. Stockpile optimism
In troubled times, people stockpile essentials such as canned food and bottled water. That isn't necessary this time. Instead, you should stockpile cans of optimism and bottles of positive thinking. There is a shortage of both right now, but do your best. And no hoarding, share it around.
Remember, they all predicted the end of the world in 2008. It didn't happen. Maybe we'll get lucky this time as well. But prepare yourself, just in case.
- How to get travel insurance if you have a pre-existing condition
- We are being failed by the Financial Ombudsman
- Boost your income at low risk
- Compare savings accounts