Every day there seems to be more and more headlines telling us that the recession is worse than predicted.  This is worrying news for everyone concerned and it scares people.  When people get scared they fear for the worst and start saving their money which is a completely normal and rational thing to do.  Unfortunately this pushes us further into recession.

Let’s assume you work on the production line of a car manufacturer.  Naturally you are worried about your future so every month you save as much money as possible ‘just in case.’  Your home needs new carpets and essential repairs but you prefer not to spend money on these items at present.  Because you haven’t called the plumber, the builder or the carpet salesman, they suffer too and as a result decide not to buy the car they had been thinking of purchasing this year.  They’ll ‘buy it next year when things get better.’  Now the car manufacturer can’t sell the cars you build so there is no need to employ you anymore and as a result you are made redundant.  Now it’s highly unlikely you will look at any of the essential repairs and carpets for some time to come which makes things more difficult for those further on down the line.  Now things won’t get better for them next year.

Governments can put all sorts of plans in place to bring us out of recession but unfortunately they do not have a quick fix.  The recession is something everyone has to work hard to get out of.  The only way out of recession is to keep spending and keep the economy moving.

This doesn’t mean stop saving.  Saving is good too as the banks need your money to be able to lend money to customers seeking mortgages and loans.  The whole system is a very delicate balance but everyone is involved and unfortunately there is no mathematical formula that tells us how much of our money we need to save and how much needs to be spent to get us out of recession.

So how do you beat the recession?  By continuing to spend some of your money and telling everyone you know why you are doing it.

This article does not constitute advice in any way.  This is simply an opinion and all feedback is welcome.