One hears the phrase “cutting one’s cloth” a lot at the moment, as people seek to put into words the need to cut back, batten down the hatches, tie themselves to the mast and generally plunge into a linguistic Anderson shelter for the coming year or two. The best guide to cutting the cloth that I’ve seen so far is the Sequoia slideshow that everyone’s been talking about. Here it is:
The need for business to think about these issues it obvious, but I think there is even greater relevance for domestic spending. If you could feasibly show this deck to every household in the UK, and if they understood it, it would come down to this: you’re overstretched. You need to stop doing things. You need to keep cash in the bank. And you need to be paying down your debt. In fact, I’m showing it to my kids tonight prior to an extended conversation about restructuring household responsibilities and realigning pocket money to the new economic realities. In Keynesian mode, I might put them to work repairing some of the wobbly infrastructure in the garden as well.