How to Survive Financial Hardship - Some Household Tips

The effects of the downturn may still be lingering but every cloud has a silver lining so lets see how to beat the financial blues.

Here are some simple tips to lift you and your loved ones and shine a light into the economic gloom. So, if you are ready to beat the downturn, then lets going!

1. Get Rid of 'Value Added'

What do I mean by Value Added? Take water for example. In the good old days we drank plain water from a well, a faucet or a tap. Now we've moved on to the bottled stuff. It is not unusual to drink French water in New York or London. We also drink bottled water with added sparkle (CO2) or with flavour added. In reality unlimited quantities of what we happily pay a dollar or more per bottle is available for nothing from the kitchen tap.

The marketing people have 'added value' to plain water. In other words they've created a brand, advertised it, put it in a bottle, shipped it around the world, and added a generous profit for themselves in the process.

The same thing happens with designer clothes. A $20 pair of jeans you might buy from WalMart becomes $200 with the right label.

So what am I saying here? Well if you need to cut back on your spending then start with the 'value added' stuff. Go back to tap water.

Don't buy expensive labels where supermarket labels will do. Buy supermarket brands in place of 'big name' brands.

Cut back on all those vitamin pills and supplements and just eat healthy food containing the vitamins you actually need. Cut out the chips, crisps and other junk food and start buying fresh fruit and veg.

2. Go For Home Made

Start making stuff at home. Bake your own bread and fill your home with a lovely aroma. Make jam. Start home baking. Why not make your own clothes.

Find that dusty old sewing machine in the garage or dig out the neglected knitting needles and some old wool.

If its legal where you live then brew your own beer or make home-made wine. Some of you are probably way ahead of me and already have a still in the attic or the old shed out the back.

Of course, I don't recommend making your own 'Moonshine' both because where I live it's illegal and also you can seriously damage your health if you don't get the chemistry right!

Why not combine this activity with tip no. 2 and produce home-made lingerie and sexy underwear?

Beware, however that although knitted knickers and bra may be a real novelty they can also be itchy!

No more paying hundreds of dollars for a football game or a rock gig. Why not turn your DVD player to full volume and get a crowd of friends around to enjoy a 'live' performance by a great band?

Similarly, watch the ball game on TV and pass the home made beer and hot dogs around at half time time.

Failing that you can always resort to old-fashioned parlour games like 'Consequences' or 'Charades'. Or what about a family talent show?

"Is there another alternative?", I hear you ask in desparation.

Well try to think of something you and your partner can do alone together that involves some invigorating exercise and is totally free. Any ideas? No not decorating the bedroom (You need to buy paint and brushes!)

Got it now? They do say the best things in life are free. Should you get bored making out in the altogether then you can always spice it up with some sexy underwear (but no expensive fancy labels!).

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An obvious thing to do at the start of a recession is to get rid of as much debt as possible. If you are spending beyond your means then cut your spending immediately.

Try to consolidate all your debt into a single loan with the lowest possible interest.

Stop using high interest credit cards and if you can't stop using them then pay off the balance, cut them up into pieces and close the accounts. Make sure all your future borrowing is limited to 'Good Loans'.

So what is a Good Loan and for that matter Good Debt? Well if you borrow money in order to invest it wisely to make more money then this good, sensible debt. Home loans in the past have been an example of this.

While property prices are rising then borrowing money to buy a house makes good sense as long as you can afford the repayments and are prepared for future interest rate rises.

Another example of a good loan would be borrowing money to insulate your home in order to reduce your energy costs or investing in a wind generator or solar energy.

So what would be an example of a Bad Loan or Bad Credit? The classic would be borrowing for a holiday in the sun because once you return home and shake the sand from your suitcase you have nothing left from the loan appart from a sun tan.

If you bought a new car, although the car continues to have value, that value depreciates rapidly as the car ages. It is therefore much better to buy an older car as the depreciation in value is much less.

The final tip involves heating. The first thing you should do in a downturn is look at your outgoings and one of the biggest financial drains these days is energy and in particular heating costs.

If you don't already do so then consider burning wood in a modern woodstove. Wood is carbon neutral, often free and certainly much cheaper than natural gas or oil. For more on this check out the following:

Credit Crunch, Energy Crisis and 10 Reasons to Burn Wood

How to Manage a Wood Burning Stove

Finally, remember that an economic dowturn isn't all bad. It presents a first-class opportunity to learn new skills, relearn old ones, learn about managing our finances better and rediscovering good, old fashioned home entertainment.

So what are you waiting for? Get loving, knitting, baking, brewing and hence saving money!