What is in Store for 2009

I am reading wide ranging view points on what will happen in 2009 to our economy. All agree that employment will suffer, but after that is really is pure conjecture. Ask me when it is over and I will be able to give you a very accurate account of 2009.

However it is safe to assume that when job losses gather pace, then naturally personal spending will decrease (unemployed people don't spend as much) Others around them will see what is happening and get nervous, and thus also cut back in expenditure.

Talk of home prices falling out of the sky may have some truth in the high end of the market, but the low to medium end should be held up by the First Home Buyers Grant and lower interest rates, which will put extra money into the pockets of all mortgage borrowers. Those lucky people who don't have any debts and have surplus cash to invest, will not get much of a return on their savings for some time.

Interest rates will drop again in February (next week) and they will fall further before this is over. Rents may come under pressure to pass on a reduction, but at the moment there isn't enough accommodation to go around so it is likely that pressure won't amount to much.

Make sure that you look after your job. If you can do that you should be able to save money as the price of goods will fall, property prices won't increase much if at all, petrol prices will stay low, and as already mentioned the cost of borrowing will be low. Put that extra cash away for a rainy day. Pay it off the mortgage so that you can redraw it later (first check to ensure that you have a redraw facility) but just don't waste it.

Be cautious if investing, and generally be careful with money, but above all don't panic as opportunities will appear over the next year or so. Newspapers and the rest of the media always exaggerate the situation. So take little notice of current affairs programs such as "This Day Tonight" or "Extra" as they will try to increase ratings by bending the truth (well alright they lie). Don't rush your strategies as conditions will stay depressed for 18 months to 2 years.

Happy 2009