In an attempt at frugality, many may decide to stop heating the house this winter. With global warming fears continuing to plague the papers every time the temperature rises above average, you could be forgiven for expecting heating costs to go down. However, as global warming is a consequence of our use of the very fuels we use to heat our homes, we have no such luck. The effect of increased demand and reduced supply of fossil fuels, coupled with carbon taxes and other disincentives to use power far outweigh any benefits we could receive from global warming (if there are any noticeable changes.) However, with prices looking set to rise and an impending energy crisis inevitable, it is vital we do what we can to avoid being bitten by this loss of income, or indeed the cold winter for those who have not enough money. It is therefore an increasingly popular idea during this recession to make use of efficient heating products such as electric blankets. Most of the time it is unnecessary to heat a whole house and an electric blanket will provide the warmth needed.

An alternative option for those who do not live alone is to use panel heaters to heat up the individual rooms required. The age of central heating is dying, its reckless inefficiency in this new age of scarcity is no better than the sports utility vehicles used in America or the ski slope in the desert built by the Emiratis. If a good thing can come from this recession, perhaps we can rebuild in a more sustainable way, both economically and environmentally.

The current economic climate is making survival for small businesses a difficult feat. The rising cost of lending, coupled with the reluctance of many banks to lend at all is making it harder for struggling companies to extend their credit. This is a bad news for everyone if otherwise-profitable businesses are being bankrupted by deleterious interest levels. For many businesses, their survival was dependant on the bubble which was burst in 2007; the recession was inevitably going to clear them out for the benefit of the economy. It is important though for entrepreneurs to continue to spawn, to make the most of the recession and take the lead into the new period of growth. It is necessary to identify the sectors which can afford to minimise losses through downsizing and help save the competitive market places and of course, jobs. One important issue many SMEs need to deal with is the appropriate acquisition of office space in a downsizing plan; many are looking to their gardens. Garden sheds offer all the comforts of a small office space without many of the rental costs and with a lovely working environment. Sheds are now a vital option for a sole trader with the need to downsize. With no need to gain planning permission and without building restrictions, sheds can be big and perfectly adapted to requirements at a very reasonable cost. They can also add value to a property, without the capital outlay and need for credit an extension would require.

This option brings the best of both the home and office environments together, enabling families to spend more time with one another and for businesses to stay afloat in difficult times. It will not be a surprise to see new shed sales soar in this recession and old shed refurbishment markets flourish.

As risk of default rises, so does the rate of interest. As the rate of interest rises, so does the likelihood of default. As defaults rise, rate of job loss increases, as rate of job losses increase, less people earning leads to less people spending meaning a higher rate of default and foreclosure on businesses. This vicious circle can only be stopped by fiscal policy incentives i.e. the central bank lowering interest rates or embarking on quantitive easing. Even then, banks being as hard hit as they have, the interest rate cuts are not necessarily being passed on to borrowers: ironically the banks’ prudence is now holding us in recession, when their recklessness put us here in the first place, (indicative of bankers having the collective intelligence of a herd of sheep?) Anyway, all these tight-fisted consumers and fearful lenders make the current climate prohibitive to potential shopkeepers, unless the right market is chosen.

Some markets thrive in times of negativity. Particularly, studies have shown; second hand guitar shops. As people become desperate to meet mortgage repayments, guitars are one of the first things to be sold at a knock down price, making a musical instrument shop a terrific choice for a start-up in these otherwise-prohibitive circumstances. While strings, plectrums, music books and the like can be bought and sold as new, the guitars keep flooding in, as a seemingly saleable household item. Of course this is not foolproof advice, as if guitars are being sold by consumers, then they are probably not being bought too. However, by buying from the worst hit areas (near a recently closed factory) and then selling in a less affected area, profits from opening musical instrument stores are quite possible.

With the continuance of job losses as the recession digs its heels in a favourable trend is appearing for those not on, or looking to be on, the property ladder. As more people look to save money by moving in with their parents or by sharing flats which previously had one tenant, demand for flats to rent in Leeds is at a new low. This is particularly the case in West Yorkshire, where more rental flats sit empty than any other area. The boom Leeds realised in the last ten years was mostly funded by the fervour for buy to let mortgages following Leeds’ resurgence as a thriving student destination following years of post industrial stagnation.

This has caused a problem for landlords trying to let the plethora of empty properties, often a vicious circle emerges whereby the potential tenants are put off by the lack of neighbours, instead wanting to find a less isolated area. This problem is exaggerated by the tendency of buy to let developments often being constructed with the usual negligence found on the wave of a boom; in their rush to construct housing, no other infrastructure has been developed. These Leeds flat rentals are particularly unappealing, not just due to their eerie, echoing hallways but that there is not a shop nearby, nor would one survive anyway! This has led the landlords to make some dramatic offers to aid their sales, such as a free month’s rent, reduced lease length or even free heating supply. While now may prove to be a good time to step onto the property ladder, it could also be a good time not to!

Individual savings accounts are ideal for those looking to find a safe haven for their cash during a recession, with the FTSE and the Dow Jones both suffering greatly since October 2007, investors have been looking for a more secure option to save. Even the bond markets have been tested by the downgrading of national credit ratings. Only available to UK inhabitants, ISA savings give tax favourable status to those who take this financial product. They replace the PEPs and TESSAs which have been accused of being narrowly targeted at higher income groups, ISAs have been criticised for being overly confusing although their purpose was to appeal to those less familiar with finance.

This savings option sits alongside other tax free investment options the government offers through its national Savings and Investment programme, offering products such as premium bonds, where the interest is accumulated in a common pot then divided by lottery with prizes ranging from $50 – £1,000,000. For the less adventurous individual looking for a steady return, one of the range from either cash ISAs or stock and shares ISAs would be more appropriate. However, in this time of uncertainty, cash ISAs are becoming an increasingly popular choice as no one can be certain whether the current rally in the stock markets will continue, a more secure savings option is required by investors.