Not only is today’s economic crisis causing us to cut back on non-essentials, but as a consequence, it is also forcing us to ask how significant these non-essentials are. So where are us Brits cutting backward if it comes to our monthly spend? And whenever it comes to some of the things we’ve been idly paying for until now, are we in danger of forgetting how necessary these things actually are?
According to ‘firstrung’, in a recent survey 42 percent of those asked said that should they be forced to cut backward on one monthly payment, they would stop paying into their savings accounts. Additionally, from a survey of families carried out through ‘creditchoices’, 37 percent would claim to reduce their savings, in a move to seemingly ignore the consequences this could have for the future.
That’s not to say that we are not also cutting rearward in less essential areas. In the same survey just over half of souls asked said they would stop spending money on leisure activities and holidays. However, this is not only due to the fact that we have less credit due to the crunch, but also since the cost of raising a family has increased at a crucial rate recently - 4 percent in a year, and a full 38 percent in the last five years.
This is where the respective meanings of ‘essential’ and ‘non-essential’ seems to be getting a little foggy, for it doesn’t seem illogical to me that I would consider paying for a holiday as not necessary. However at the same time, the statistic of just 52 percent of families picking out to cut back in this area suggests there is a great portion of souls who would disagree with me.
Similarly, tho’ I would consider life insurance to be closer to the ‘essential’ end of the payment spectrum (especially where raising a family is concerned), there are a fair amount of individuals who are eager to stop those payments despite the risk to future security.
Interestingly, there is a crucial difference between those asked in the ‘individuals’ survey discussed through ‘firstrung’, compared to those asked in the ‘family’ survey through ‘creditchoices’. The former survey reports that five percent would neglect their life indemnity policies, although 23 percent are said to be reducing or cancelling life insurance in a family situation.
So is this percentage difference because of the greater require for families to cut rearward in more areas, or since of a gradual change in what we as a nation prioritize if it comes to spend? Essentially, do we feel more obliged to have a holiday now than we did in the past? It’s a complex question, but it seems to be a worry to some in the business who are also arguing that long-term financial security such as life indemnity is more important now than it has been in the past. To those people, even the thought of cutting backward in such an area executes not seem sensible at all.
Uchenna Ani-Okoye is an internet marketing advisor
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