UK: Q&A on Brexit with “Good With Money”

UK: Q&A on Brexit with “Good With Money”

WMN Feature Brexit Big Ben

Brexit. The news is everywhere. How does this affect families in the UK and around the world? We called on our friends (literally, they are friends with Jen Burden’s sister-­in-­law!), “Good with Money” in Great Britain, a site launched by two moms who provide financial information and inspiration for families, to get their perspective from inside the UK!

What is Brexit (the short version!)?

Brexit. A week or so before the EU referendum I was in the playground with my youngest son. An elderly Chinese man looking after his grandson started up a conversation. I could just about understand his English. His comment was, basically,

“What on earth are you doing, Britain, holding a referendum on whether to leave the EU or not? Are you mad?’” Well, clearly, we are.

The UK woke up on the morning of 24 June, many of us in utter disbelief on realising 52 per cent of the country had voted to isolate our tiny island kingdom and leave the European Union. The EU currently has 28 member states, a combined population of more than 500 million, a combined GDP of more than US$18bn and an internal single market governed by its own laws. The UK joined the precursor of the EU, the European Economic Community, in 1973. So to answer the Chinese grandad, yes, we are mad, we held the referendum, and (gulp) we voted leave.

And, if that was not enough madness in itself, we’ve since seen the Prime Minister at the time, David Cameron (Remain), who called the Referendum somewhat as an election winner, resign. The two main Leave campaigners, Boris Johnson and Nigel Farage, also resign (from the resulting Conservative Party leader election race and as leader of the UK Independence Party respectively). The other key UK political party, Labour, remains in turmoil with a leader, Jeremy Corbyn, refusing to step down despite more than half of his ministers resigning just after the vote. AND…we’ve still not really heard a peep from the Greens or the Liberal Democrats (who led our coalition government between 2010 and 2015). The only person with any sense saying anything with any sense is the Governor of the Bank of England, Mark Carney, who is Canadian!! (Read our latest on that here.) And current Prime Minister Theresa May, who voted Remain, vows to follow the will of the people after the vote to Leave.

Leave or Remain, there is no averting the harsh lesson we are now getting in how that abstract and amorphous “economy” deeply affects our personal lives and society both close to home and further afield.

They say nothing is certain in life except death and taxes. Well, in the two weeks after the vote, I’d say that’s been proven, and one million times over. Previous certainties about jobs and the employment market, freedom of movement, house prices, household bills to loan rates and other personal finances have all been thrown upside down, topsy­turvy.

And one of the worst things is that some of those who are most likely to have voted Leave – the disaffected and disenfranchised – will now be among those most negatively affected by the country’s decision.

We will ALL be affected, and in far more subtle and profound ways than just how much our mortgage bill or rent goes up, as the impact of the financial crisis proved. Following the shock of 2008, higher house prices resulted in an increase in the age at which people get married and have children; the huge public deficit resulted in more people working into retirement and young people who can’t get jobs have to live with their parents for longer. More of the same again cannot be ruled out.

Despite the crazy turmoil at Westminster and in the City of London, a lot of clever people are working out how to protect us from Brexit’s illest effects. Lower interest rates and money printing are on the cards. These strategies might be a recipe for ever­living debts and poor retirements, but they will buy us time.

What are the top 3 effects on the world economy after the Brexit vote to leave the EU?

The effect on the UK economy has been, understandably, pretty pronounced. There are apparently 700,000 fewer jobs advertised in Britain since the Leave vote. Across the globe, too, markets were rocked and currencies in freefall, although they have since recovered.

Almost two weeks after the vote, the British Pound had hit another 31 year low, and it still remains well below its pre-Brexit value over one month later. There is talk of it reaching parity with the US Dollar before the end of the year. Good news for tourists visiting the UK, but not, generally, for many others.

Meanwhile, inflation, made worse by the falling Pound making imports more pricey, looks set to increase. But by how much? A few spikes notwithstanding, inflation has been fairly low for a number of years. Now, economists predict it could more than double before the end of the year, rising to as much as 4 per cent next year.

In the UK we import 60 per cent of our goods ­- that’s a lot, hey? So what do we do if our EU or even global trade agreements are not (re)negotiated fairly? That’s a lot of stuff to miss if our friends in Europe no longer choose to sell it to us ­ at favourable rates. Say au revoir to affordable Mozzarella, Balsamic vinegar, Feta cheese… blimey, this could even spell the death of our beloved Prosecco habit!

The GBP has seen a devaluation. What are some of the challenges this presents for families in the UK and abroad?

As soon as the Leave vote was announced, the British Pound slumped to its lowest level against the US dollar in 31 years. Almost two weeks later, it fell yet further, to new 31 year lows. It has also tumbled against the Euro. Despite a growing chorus of positive voices, this still makes for pretty hard reading.

It means British families with holidays booked to Europe, the US, or even elsewhere, are going to find it pretty tough going, financially.

With the Pound worth less than it was a month ago, everything is going to seem almost unstomachably expensive. So, those Brits who’ve yet to book a holiday will most likely see the summer of 2016 as their Staycation year, keeping the money closer to home. UK resorts should do well from British travellers, and they should also do well from an influx of visitors from around the world making the most of a cheap Pound.

More worryingly, perhaps, the 4.5m British families living and working overseas (with 1.4m in the EU according to the UN) are in limbo, wondering for how long they will be able to stay, and suddenly finding everything significantly more pricey.

While some in the Leave camp argued prior to the vote that Britain would be able to carve out a fuller role in foreign aid outside of the EU and would be able to develop broader international political alliances, such as with former Commonwealth countries, there’s still scant evidence emerging that this will be the case. (Frankly, there’s little evidence of anything emerging, on any future matters at all, eeek!) In fact, a number of leading names in international aid such as Oxfam, WWF, Christian Aid, ActionAid and Save the Children, signed a letter pre Brexit stating their view that only by remaining in the EU can Britain extend its reach and influence when tackling global humanitarian crises such as Syria, Middle East and north Africa.

Britain currently spends 0.7 per cent of gross national income on foreign aid, with the official budget rising to £12.2bn. The signatories of the letter said: “Every pound of aid the UK spends through EU institutions is matched by £6 from other member states. This larger pool delivers better lives for the poorest people. It also helps tackle problems in areas where the UK has no large presence. EU aid complements activities that other aid agencies cannot undertake, like police and security missions in fragile hotspots.”

So, much as those Brits living and working abroad are likely to suffer, people from developing countries who work in the UK will also be hit, as the value of what they have to send home falls further.

Will the UK’s exit from the UK make it more difficult for EU members to work in Britain and vice versa?

The jury’s still out on whether it will be more difficult for people from EU member states to work in Britain and Brits to continue working across the EU. Although I am very happy in Britain (even if it still feels a bit like a rather rudderless, possibly sinking, ship at the minute). I did find myself embracing my Irish roots (my mother is Irish) when I woke up on 24 June, the thought of wanting my kids to have the same European freedom of movement I’ve been lucky enough to have, if they so wish. I heard a rumour they’ve shut the Irish passport office though, so too late for me!

What is your top practical financial advice for families everywhere?

If like many of us in the UK ­ British, European, African, American, Asian, etc., ­you find yourself wondering w h a t   t h e   h e c k   t o  d o  n o w , we’ve come up with a few post ­ Brexit ‘keep calm and collected’ financial tips:

  • ­Consider switching your energy supplier. ­Homegrown renewable energy is less sensitive to price volatility and kinder to the planet.
  • ­Check your savings balances. ­ Up to £75,000 deposits are covered by the Financial Services Compensation Scheme; the EU deposit guarantee limit is Euro 100,000.
  • ­Analyse your everyday spending to guard against too much vulnerability to further falls in the Pound.
  • ­Hold off buying foreign currency. (Or see it as a chance to change all those Dollars and Euros hiding in drawers and down the back of the sofa back into Pounds!)
  • ­Consider fixing your mortgage. ­ Yes, rates are tipped to fall, but there may be short term volatility and fixed rates are super­low at the moment
  • ­Go local, buy local. Support the local economy, it’s going to need it.
  • ­But go global, too. ­ Investors should ensure their portfolios are globally diversified and denominated in several currencies, not only the Pound.

You could also check out our Positive, Practical and Principles Good with Money tips to get your family finances back on track post­-Brexit.

For more on the financial effects of Brexit and more, Lisa and Becky can be found providing financial tips for families in the UK at Good with Money.

This is a guest post to World Moms Network by Lisa Stanley in the UK of Good with Money. (Thank you, Lisa!)
Photo credit to Jennifer Burden.

World Moms Blog

World Moms Blog is an award winning website which writes from over 30 countries on the topics of motherhood, culture, human rights and social good. Over 70 international contributors share their stories from around the globe, bonded by the common thread of motherhood and wanting a better world for their children. World Moms Blog was listed by Forbes Woman as one of the "Best 100 Websites for Women 2012 & 2013" and also called a "must read" by the NY Times Motherlode in 2013. Our Senior Editor in India, Purnima Ramakrishnan, was awarded the BlogHer International Activist Award in 2013.

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Massachussets, USA:  Traveling Like a European

Massachussets, USA: Traveling Like a European

bags

Our luggage for a three-week trip to Europe for a family of four

We just returned from a family trip to Europe. It was the first time we took our kids, ages 7 and 4, on an overseas vacation and we wanted to be sure to make the most of the experience. Right from the outset, we did two very un-American things: 1) we took more than two weeks off for the trip, and 2) we packed really, really light. For four people on a three-week vacation we took just three carry-ons and one back pack.

Possibly demanding even more attention than our travel itinerary, our luggage became a bit of an obsession for my husband.

When we decided to take my cousin and his wife up on their invitation to visit them in Poland, we wanted to be as economical as possible, both about getting to Europe and traveling within it. Thanks to my husband’s frequent cross-country business trips over the past two years and the added perk that his company’s European headquarters is in Cork, Ireland, we were able to cover three of our four tickets without spending a dime. We figured once we got to Ireland, like well-traveled Europeans, we’d rely on discount airlines to get us where we wanted to go.

The challenge became figuring out which carriers would get us where we wanted to go for the least amount of money. From Ireland, we wanted to get to Poland, and from Poland, we wanted to fly to London. Then from London, once more to Ireland, for our return flight home.

Ryanair, a notorious (and insidious), Irish, discount carrier was top on our list for cheap flights. Following a close second was Easy Jet.

Though Ryanair has incredibly low prices—we bought tickets from Cork, Ireland to Warsaw, Poland for US$70 per person—they also have ridiculously restrictive carry-on luggage requirements. This is how they are stated on the Ryanair website:

“Strictly one item of cabin baggage per passenger (excluding infants) weighing up to 10kg with maximum dimensions of 55cm x 40cm x 20cm is permitted. (handbag, briefcase, laptop, shop purchases, camera etc.) must be carried in your 1 permitted piece of cabin baggage.”

If your carry-on does NOT meet these requirements or fit in the miniature luggage cage positionedryanair by the Ryanair ticket counters and flight gates, then these are the penalties:

Extra/oversized cabin baggage will be refused at the boarding gate, or where available, placed in the hold of the aircraft for a fee of £60/€60. Fees are subject to VAT on Italian, French, Spanish, Portuguese and German domestic routes at applicable government rates. If you are unsure, check at the Bag Drop desk before going through security.

In other words, if your luggage doesn’t pass, at the gate you may be forced to pay as much as or more than your actual flight ticket to check the offending item.

I’m pretty sure Ryanair caters to the weekend travel crowd, whose weekend’s worth of necessities easily fall within these parameters but for a family of four on a European sojourn, the restrictions were crippling.

The restrictions caused two dilemmas for us. The first dilemma was that the standard size of all US carry-on suitcases exceeds Ryanair dimensions. In fact, after browsing multiple websites and purchasing and returning two, new carry-ons, we could not seem to find wheeled luggage small or light enough to fit their limitations. The second dilemma was that without wheels, our children were not old enough nor strong enough to carry their own luggage. Meaning that everything we needed for our three-week trip would have to be carried by my husband and me.

Armed with a tape measure and digital luggage scale, my husband became a man possessed by the Ryanair luggage restrictions.

Our packing list went from vacation-size to commando-style. Each of us was rationed: five tops (two long sleeve, three short), four bottoms (two pants, two shorts or skirts), seven under garments, three pairs of socks, two pairs of shoes, one sweater, a swimsuit and a travel-raincoat.

Added to this were toiletries, my husband’s laptop computer, business attire for the days he needed to put in at the Cork office (including a sports coat and a pair of dress shoes), entertainment items for the kids (foam-weight, modeling clay; travel journals; crayons; a travel game; a deck of cards; markers), a DSLR camera, and a tablet computer loaded with books, two movies and a variety of travel apps.

We divided these items among our backpack and three small bags, weighed and measured each one…twice. Then stood on our bathroom scale and weighed them again. When we were pretty confident that our luggage met the size and weight requirments—dictated most restrictively by Ryanair—my husband added a contingency plan, which involved wearing all of our heaviest and bulkiest clothing items on travel days.

We were determined to travel small, light-weight and efficient, just like our European counterparts.

So though Ryanair set the stage for our minimalist luggage, thankfully, we only flew one flight with them. In comparison, Easy Jet was a luxury liner with far less restrictive rules and the three other regional carriers we flew even allowed passengers to check items, free-of-charge.

Considering the stress that packing for our trip caused up front, in the end, it was a great lesson in minimalist travel:

  1. confined to a week’s worth of clothes, we were able to do laundry twice on our trip.
  2. With careful and clever planning, our clothing choices yielded 21 different wardrobe combinations, preventing us from looking like we had on the same outfits in the copious number of pictures we snapped.
  3. The time we spent in airports was significantly reduced by the lack of our need to wait at the luggage claim each time.
  4. And, perhaps most rewarding, we’d like to think we blended in with other European travelers, rather than sticking out like typical boisterous Americans on holiday.

This is an original post for World Moms Blog by our Managing Editor and mom of two in Massachusetts, Kyla P’an.

Photos credited to the author.

Kyla P'an (Portugal)

Kyla was born in suburban Philadelphia but spent most of her time growing up in New England. She took her first big, solo-trip at age 14, when she traveled to visit a friend on a small Greek island. Since then, travels have included: three months on the European rails, three years studying and working in Japan, and nine months taking the slow route back from Japan to the US when she was done. In addition to her work as Managing Editor of World Moms Network, Kyla is a freelance writer, copy editor, recovering triathlete and occasional blogger. Until recently, she and her husband resided outside of Boston, Massachusetts, where they were raising two spunky kids, two frisky cats, a snail, a fish and a snake. They now live outside of Lisbon, Portugal with two spunky teens and three frisky cats. You can read more about Kyla’s outlook on the world and parenting on her personal blogs, Growing Muses And Muses Where We Go

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Friday Question: What is your favorite memory of your father?

Not all, but a great number of countries celebrate Father’s Day on the third Sunday in June.  In honor of Father’s Day, we asked our World Moms…

“What is your favorite memory of your father?”

Read on to see what they said…

Amy Hillis of Ohio, USA writes: 
“My dad used to restore old gumball machines and he would let me sit at his work bench and help. He would give me little jobs and let me use his tools and paints to make my own ‘creations’.

I realize now that he helped encourage my creativity and provided an escape for me when things with my mother were rough.

My dad is still around, but lives 400 miles away- I still miss doing ‘projects’ with him.”

(more…)

World Moms Blog

World Moms Blog is an award winning website which writes from over 30 countries on the topics of motherhood, culture, human rights and social good. Over 70 international contributors share their stories from around the globe, bonded by the common thread of motherhood and wanting a better world for their children. World Moms Blog was listed by Forbes Woman as one of the "Best 100 Websites for Women 2012 & 2013" and also called a "must read" by the NY Times Motherlode in 2013. Our Senior Editor in India, Purnima Ramakrishnan, was awarded the BlogHer International Activist Award in 2013.

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