Finance Wanted.

By Paul Dubsky

When recession starts creeping in it will become noticeable. Spending on households gets smaller and smaller as incomes get smaller. Business in general gets slowed down, and when that happens, unemployment starts going up. The consumer has less money to spend and gets worried, and any major outlays will tend to be delayed as much as possible. The consumer hangs on waiting for better times.

It does not mean that everybody earns less, but many will. What does make an impact is the feeling of having to be more careful about spending.

Naturally, consumer confidence starts to tumble, as a gloomy point of view takes over. It does not help to see reports of subprime crumple and other financial horror stories.

On the housing front, it is also a time to ponder, since most people are governed lately by the rising or falling value of their homes. Many have been dependent on the continuation of the increasing market price of their house and got used to this magic phenomenon which enabled them to get so many things they could not afford otherwise.

The financial standing of people is not always best measured by what amount they have in the bank, but their steady earning capabilities, and the competence of the control of their funds as well as their reliability. Thousands of instances occurred, when people have won fortunes or inherited them, only to wind up in a big minus. These are the most vulnerable people, because quick money came their way, and good luck to them, but they have problems to keep up their new style of living if something goes wrong. To fall into money is one thing, but to keep it, is another. Finding a way out is always hard, but at least there is a lesson to be learnt, and that is, when you get into money, do not be in a hurry to spend it all without making sure you can really afford it. Keep enough money to ride out a possible storm.

Of course, there are those who have been careful with their money, and to them many opportunities will unfold to purchase property at rock bottom prices. They are undoubtedly only waiting for the right moment to pounce and will gain eventually.

There are others, who have made investments which have lost in value. They have not spent their money recklessly, but are victims of circumstances which may change later. Mostly, these people can wait and will be back in good shape ready to fight on.

Looking to spot inflation is not too hard. The Retail Price Index is a good pointer to the inflation position. This is taken once a month.

The R.P.I. is arrived at by taking a numerous lot of prices and ascertain as to what extent there has been a price move. The items selected will generally be important such as food and other everyday necessities.

When you notice the phone bill, the electricity and gas bill, and various items on your shopping bill go up, you are looking at the arrival of inflation.

In other words, we know that your money will not go as far as it did before. Inflation can start eating into your savings, so make sure that your invested money makes at least enough to counter this.

Of course, gloom comes but it also goes. At all times be sure you get the best you can for your money whether it is buying a house or currency or a car or whatever.

There are many foreign currency exchange companies, so find the one which gives you the best exchange rates. It is well worth the few phone calls. The same thing goes for buying a house, so do not be afraid to make an offer thinking it might be on the low side, you never know your luck. With cars or anything else, the principle is the same, look for value.

Paul Dubsky is director of Foreign Currency Exchange & Transfers Ltd. The company is focused on being able to offer really friendly currency exchange rates. We believe we are the only Foreign Currency Exchange company which offers special rates to Senior Citizens.