Is the Credit Crunch forcing Pet Owners to Abandon their Pets?
August 26, 2008 | Leave a Comment
“Pets hit first as financial crisis affects household income.”
According to an article in “The Independant” by Jerome Taylor on 20th May 2008, “Britain’s economic woes are forcing people to abandon animals in unprecedented numbers as desperate families struggle to cut costs by dumping their pets.”
Apparently Britain’s animal sanctuaries are becoming overwhelmed by pets that people have either handed in or deserted due to financial pressures meaning that they can nolonger afford to keep them. In 2007 the RSPCA was forced to rescue 7,346 abandoned pets and, in the first 4 months of 2008, this trend appears to be rising. The trend has also been seen to be rising by amimal sanctuaries in the United States.
“So what causes people to abandon pets that they love?”
Sometimes the decision to hand in a pet can simply be because a home has been reposessed and rental properties will not often allow pets…therefore forcing the owner to surrender their pet in order to have accommodation….a heartbreaking decision. In many situations, however, people are not prepared to allocate sufficient money from an already stretched household budget (due to the impact of the credit crunch) to a pet that may be perceived as non-essential. This has been a particularly distressing trend witnessed by the RSPCA and the Cats Protection League. Surely there must be another way to save money?……
Will the Credit Crunch affect Student Loans?
August 19, 2008 | Leave a Comment
Rising concerns over availability of student loans….
Paying for your child to go through College or University next year should not be much harder than it is now in so far as obtaining student loans is concerned.
However, private loans taken out by students or their parents may prove harder to obtain. With rising fuel and food prices taking a huge proportion of most households’ incomes, lending houses are going to be much more skittish about offering credit….especially where there is a poor credit history or already too much credit card debt..
So how many students are likely to be affected?
It is estimated that approximately 15% of undergraduates rely on private loans and, of course, no guarantees can be made about similar amounts of federal or government financing being available to future students and parents.
Financial aid groups have reported that at least 43 lenders have quit programs supporting students in recent months due to their own financial pressures resulting from the credit crunch.
A press release by the National Association of Student Financial Aid Administrators, based in Washington states that “To date, the association is not aware of any student being denied a federal student loan due to market conditions.” However, many parents are concerned that the situation may change when falling real estate values and rising costs mean that they have less security to offer as collateral to the lending companies.
In private colleges, federal loan programs usually do not cover all tuition and fees so a declining availability of private loans will hit hardest at this group.. In all, it is important for parents to start doing their research as soon as possible so as to secure the required financial support for their children.
Beware Equity Release for solving a Credit Crisis!
August 15, 2008 | Leave a Comment
Wherever you look at the moment whether it be television, newspapers, bill boards or magazines, it seems that there are adverts with grinning couples apparently delighted that they have “sorted out their money problems” by getting an equity release scheme arranged on their property. Such schemes may seem appealing during the after shocks of the credit crunch.
“So what is an equity release scheme?”
The way these work is that the company gives you a lump sum / monthly payments that will boost your income in the short to medium term but will ultimately hand over ownership of your property to them.
“Sounds good….so why would an equity release scheme be a problem?”
There are many reputable companies offering this service out there…but there are also many scams so you need to be really careful when looking at a deal like this otherwise you could loose not only your home but be sold short in the money you receive for it.
These schemes can be useful for supplementing your pension and, if you live for a long time after retirement, you will do well financially from it (although there will be reduced or no capital from your home to leave to family). However, if looking at this type of scheme for dealing with medium term cash flow problems due to high credit charges, you would be advised to seek professional debt advice as it may only prove to give short term relief to cash flow without addressing the buying behaviours that have led to unmanageable debt.
The Final Cost of Easy Credit
August 14, 2008 | 1 Comment
“What is easy credit?”
“Easy credit” is the term used to describe an extra willingness by financial institutions to lend money to businesses and individuals often at low interest rates. This makes is appear to be easy to pay off and a good option.
The prevalence of easy credit and 100% mortgages made it so easy for households to believe that most planned or impulsive expenditures were possible.
For the last 20 years we have become accustomed to easy credit, sometimes regardless of our credit history and ability to pay. The impulsive buy was easy and our “wants” have been perceived as “needs”.
Suddenly, as cheap re-mortgages and 100% mortgages have become a thing of the past as the credit crunch bites, the opportunity to use equity from the family home to reduce credit outgoings has become a thing of the past and the effect on household budgets alongside the the rising costs of fuel and food have been terrifying for many households.
What, then, is the final cost of easy credit?
Despite all of these stresses, the painful lessons that will be globally learned are those that our parents’ generation already knew. Living within our means, saving for the things that we would like to buy and ultimately knowing that we will not be hassled by creditors are the true financial freedom……not a cheap loan or another credit card allowing us to buy something in the here and now. Businesses have become accustomed to making easy sales when offering low cost credit to enable the purchase. The huge reduction in such sales are bound to lead us into recession.
