Image courtesy of Petras Gagilas

Sometimes it can feel like you can get really affected by changes in the economy. This could be because of changes of interest rates, productivity, prices, stock market and taxes to name but a few. It can be difficult to manage when things like this change, which are out of your control. However, there are things that you can do which will protect your household budget from such changes.

Obviously the things that affect you will differ depending on your personal situation. If you have debts or savings, then changes in interest rate will have an effect on you. If you are working, then a change in productivity may affect whether you get pay rises or bonuses or whether you have job stability or not. Changes in prices will have an effect on everyone. If you have shares or investments which have a stock market backing then this will affect your return. If you earn enough to pay taxes and buy luxury goods, then any changes in income tax or VAT will affect you and changes to other taxes may also have an effect as well.

One thing to do which could help in all situations is to have as few debts as possible and as many savings as possible. This means that if you lose your job, you costs go up or your return on investments go down, you will still have some money to fall back on and will not have too many responsibilities to worry about. If interest rates are low, it can be tempting to borrow, because it is cheap, but if you lose your job or prices suddenly go up then you may struggle to make the repayments. It can give you a feeling of security knowing that you have done everything you can to be able to manage in such a situation.

It can also be good to make sure that you are in a good position in your career. Try to do training courses, especially if they are free or offered by your company so that you have useful skills. Work hard and show that you are a worthy employee. If you feel that you role is in threat or that your company is not doing well, then look around to see if there are other opportunities for you. You may not want to change jobs right away, but being aware of what else is out there, could help you later.

If you have savings and investments then spread them out a bit so that any changes to certain types of investments will not have such a severe effect on your money as a whole. Unless you have time to do lots of research or are an expert, it is wise to use a financial advisor to help you with decisions like this. Some investments will be more likely to be effected by economic changes than others and you will need to find out and decide which you think will be the best options for you.