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Picking up a newspaper or turning on the TV these days almost inevitably means hearing about the latest economic woes that so many of our world economies are facing. We know that our governments are putting efforts into alleviating the malaise but the likelihood is that the current recession will go on for some time yet. Let's look, then, at what this means for us and what we can do to ensure that we survive the economic crunch.

Understanding the economic crunch and its impacts:

The most devastating impact of the recent economic mess has been those mortgage holders who have been unable to meet their monthly mortgage payments and have subsequently lost their homes to the banks. Initially, the phrase sub-prime lending' was bandied around, with the view being that most of the foreclosures had come about because banks had given mortgages to people who were unsuitable for a mortgage or at an amount that was always likely to be stretching their finances too far. Losing your home must be a devastating occurrence and with job redundancies now gathering pace the danger is that this threat could extend to many people who in no way could be described as sub-prime.

The sub-prime mortgage crisis has had another consequence too. Banks have been increasingly unwilling to lend to each other, with the result that the funds needed to resource mortgages have dried up. This has been called the Credit Crunch and it means that it has become increasingly difficult for people to get a new mortgage. The result has been that the property markets have stagnated and house prices have dropped. Banks have also tightened their lending criteria so that you need an even better credit score than usual to qualify for a loan, mortgage or credit card.

The additional burden that consumers have been faced with has been increases in fuel and food prices. Such cost rises have hit people's budgets and make it more difficult to avoid going overdrawn or becoming more reliant on credit card debt. Inflation also reduces the value of the money you've carefully put away into a savings account, which is depressing at a time when share prices have also been hammered. Indeed, some shareholders have suffered large falls in the value of their stock portfolios as banks and other companies profits have been hit and, in some cases, have had to resort to Rights Issues to try to stay afloat.

What you can do to survive the economic crunch:

The biggest threats, from a severe economic downturn, include the possibility of

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