I am writing this month's article at the beginning of October as the global financial crisis continues to monopolise the headlines, and the stock market has already fallen by 5% today!

By its very nature this article cannot be at the leading edge of the developments in the world of finance because of the print deadlines we work to. But maybe that's a good thing. To review the thoughts I pen today in a month's time should be quite an educational experience! They used to say a week was a long time in politics, but over the past few months a weekend has become a long time in the current financial maelstrom. The passing of the United States Government rescue package by Congress last Friday seems very old news this Monday, as European banks now come under pressure.

The question most of us are asking is how will all this affect me? Let's take a look at what I believe the implications are for those in the Services and their families, both at home and abroad (the stock market is now down 8% - gulp), and start with the potential impact on your employer, the Government.

Most experts are agreed that the credit crunch combined with higher fuel and food prices will result in a recession in the United Kingdom . Higher unemployment and falling revenues will undoubtedly put pressure on Government spending and budgets. One suspects that the MOD will not be immune from this, and therefore its ability to spend, particularly on capital projects, maybe affected.

On the positive side, those with an Armed Forces final salary pension scheme will not have the same concerns as many employees in the private sector, who have to watch the value of their money purchase schemes tumbling.

Whilst a recession normally produces higher unemployment, I believe those in the Forces will be protected from this, particularly given the level of current commitments. In fact there may be fewer leavers as opportunities dry up in the outside world, and recruitment may prove easier. Consequently, given the current economic uncertainly Service personnel may be right to believe they are in a better position than many of their civilian counterparts.

So having looked at the impact of current events on your employer what will it mean for you as individuals? I should say at the outset that I do not believe the Government will allow anyone to lose their savings because of the collapse of a bank or building society. If you are lucky enough to have more than the current £50,000 protected amount in an account again I would argue you will probably be safe. Whilst on the subject of savings, anyone with products linked to the equity market - be they ISAs, Child Trust Funds or investment bonds - will have seen their value fall by 30%. However this is only a problem if you need the money in the short term. History shows that markets do recover, it just takes time (usually about five years). But remember, if you have a regular saving plan your money is buying increasing numbers of units as their value reduces, which will be good news for you when the markets recover.

The credit crunch is all about the banks' lack of confidence to lend to each other, and as such access to credit is now more restricted than we have so far experienced this millennium. Bigger deposits are required to qualify for the best mortgage deals, and lending criteria such as income multipliers have been tightened. Buy to let mortgages will be more difficult to obtain, and parents may be less able to act as guarantors for their children coming into the housing market.

However military personnel naturally wish to continue to put down roots, encouraged by government initiatives such as the increase in the stamp duty threshold and key worker schemes. So the news that house prices are falling both at home and abroad is good for those climbing the property ladder. After all a 20% deposit on a £200,000 property is a lot easier to find than 20% for one valued at £375,000, and I predict the housing market is likely to see falls of circa 25% before any recovery in 2010 or 2011.

Unfortunately the increased cost of living and borrowing will also have negative implications for an activity close to the heart of many serving personnel – motoring. Putting aside the increased running costs, dramatic falls in second hand values mean most of us will feel compelled to keep our vehicles longer, and those buying tax-free cars will be unlikely to make a profit.

Talking of cars, the credit crunch has also had repercussions for some of the biggest insurers in the world, including those underwriting motor insurance. I'm afraid you should expect to see increases in premiums in 2009. However the most serious consequences for insurance are likely to be felt in the area of personal protection. Given the current economic climate, and the high level of military claims resulting from action in Afghanistan and Iraq , it is my view that there will inevitably be premium increases for these products in 2009.

I do hope my thoughts on the medium to long-term financial situation haven't dampened your spirits too much, as we also have to think about the short term with Christmas just around the corner! Here are a few tips that may help you enjoy the festive season, whilst getting in better shape to deal with a difficult year or two ahead:

•  Set limits on the amount you spend on gifts
•  Use cash not credit cards
•  Only send Christmas cards to those you will not see and do not have access to the internet
•  Wait for sales – they come round quickly
•  Open a deposit based savings account for Christmas 2009 now

Until next time - batten down the hatches!