Here are some common words, phrases and idioms to talk about problems in the economy, money and finance.
Credit crunch = when borrowing money (from banks) becomes harder to get and more expensive.
(In the present credit crisis, banks stopped lending to other banks, then stopped lending to their customers, which means that there is now a shortage of credit and no more cheap credit).
The Central Banks and Finance ministers are trying to decide whether to inject more money into the financial markets (places where stocks or commodities for example are bought and sold).
Many countries are now in an economic recession. Apart from the credit crunch, there are other signs of a downturn, such as rising inflation and an increased cost of living. Governments often respond by cutting interest rates (to bring down the rate of inflation).
To compound the misery (=make things worse), falling house prices mean some home owners face negative equity (when your house is worth less than what you originally paid for it).
Overall, the forecast is pessimistic or gloomy.
High street banks (see our page on banking vocabulary) lend money to customers in the form of loans (such as car loans or personal loans) or in the form of mortgages to buy houses.
Sub prime mortgages, now often referred to as toxic mortgages, were sold to people with poor credit ratings. It is a combination of this type of risky lending, falling house prices and high interest rates which led to defaults on mortgage payments and foreclosures (=repossession). This in turn triggered the global financial crisis.
A number of banks have already gone bust or have been nationalised (= bought by the government) who try to reassure customers that their savings accounts are safe. However, consumer confidence is low.
People worry about losing their jobs, or being made redundant. Some industries are cutting their workforce, and laying off staff. These job losses / job cuts / redundancies mean that there will be more claimants (for unemployment benefit) - or more people on the dole. (dole = unemployment benefit).
More finance and economy phrases
weather the storm = survive bad times: "We're trying to weather the storm by lowering our prices."
be in good shape (the economy is in good shape) = to be strong: "Fortunately, we're in good shape financially, so we should be able to weather the storm."
live beyond your means = not earn enough money, so you need to borrow money: "We have to stop living beyond our means."
pay the price = pay for your mistakes: "The country is paying the price for its previous spending policies."
foot the bill = pay for someone else: "He took me out for lunch and footed the bill."
at rock bottom = to be so low you cannot go any further down: "The economy must be at rock bottom now."
in free fall = keep falling without anything stopping the fall: "The economy is in free fall."
to break the bank = to cost a lot of money: "I can't afford a skiing holiday this winter - it would break the bank."
to cost an arm and a leg = be very expensive: "It costs an arm and a leg to buy all these Christmas presents."
to pay through the nose = cost a lot: "They had to pay through the nose to get their son insured to drive."
to splash out on something = to pay a lot for an important event: "They're splashing out on their anniversary this year."
Idioms meaning a person is rich
to be loaded: "He works in the City and he's loaded!"
to be sitting on a small fortune / goldmine: "She will inherit everything. She's sitting on a goldmine!"
to have money to burn: "I've just received a bonus and I have money to burn!"
Idioms meaning a person is poor
to be as poor as church mice: "His family have always been as poor as church mice."
to be skint = British slang that means having no money: "Can you lend me some money until next Friday? I'm skint!"
to be broke = have no money (also "flat broke" or "stony broke"): "She's always broke at the end of the month."
to scrimp and save = to make as many economies as you can to save money: "His parents scrimped and saved to send him to university."
Idioms to mean you don't want to spend money
a scrooge = Scrooge was a Dickens character, famous for being mean: "Why don't you want to buy her a leaving present? You're such a scrooge."
a skinflint = someone who doesn't want to spend money: "She reuses tea bags - she's such a skinflint!"
tight-fisted: "One reason he has so much money is that he's so tight-fisted!"
Other money idioms
to have more money than sense = to have a lot of money which you waste rather than spend carefully: "He just bought another camera - he has more money than sense."
to burn a hole in your pocket = to not be able to stop spending money: "He can't just go out window-shopping. Money burns a hole in his pocket."
money for old rope = an easy source of income: "He sells bunches of flowers he has grown himself. It's money for old rope."
make a fast buck = to make money quickly and sometimes dishonestly: "He made a fast buck selling those shares. I wonder if he had insider knowledge."
Ten a penny = very common: "These scarves are ten a penny in the markets here."
For more idioms about the economy, finance and business, see my ebook: 303 Business English Idioms and Phrasal Verbs.