Recession-proof Your Finances

With everyone talking about an impending recession -- or declaring that we are in a recession now -- do you feel that your financial future is safe?

Struggling consumers are worried about how economic decline in the months ahead could affect their wallets. Here are some things that you can do to soften the blow and maybe help you come out of a recession looking like a winner.

* Pay down your credit cards. Carrying a huge balance or multiple balances is doing severe damage to your financial well-being. If you are having problems, contact your credit card company to negotiate for a better interest rate, or contact a credit counseling agency, such as Consolidated Credit Counseling Services, to discuss the benefits of being on a debt-management program.

* Build an emergency fund. You should have up to 6 months of savings to take care of your living expenses. If you don't, then start saving by cutting down on unnecessary spending.

* If you receive any checks or rebates from the government, put that money in your emergency fund. You can also get a 2nd job and put that money in your emergency fund or use it to pay down your credit cards.

* Apply for unemployment benefits if you are laid off from your job. It may take some time for the paperwork to be processed. You'll want to collect these benefits as soon as possible.

* If you have stocks and bonds, talk with an expert to make certain that you are diversified. You should not panic and sell right away. Keep a close watch on the market and your investments. If you are in it for the long haul and are diversified, you should be fine. If not, re-evaluate your portfolio and come up with a formula that you are comfortable with.

* Don't take cash advances on your credit card with exorbitant interest rates; federal statistics show outstanding consumer credit reached about $2.6 trillion at the end of August 2008. That was up 3.8 percent from a year earlier.

Ultimately, it's important not to panic if you feel you are being financially stressed out. Work with your family to come up with new ideas on how to save money or make money and if you feel that your job is at risk, don't hesitate to start looking for new work. Strategize and make a commitment to adjust to anything the fluctuating market throws your way.


Receive a free Debt and Budget Analysis by visiting www.ConsolidatedCredit.org and take the first steps to becoming recession-proof. A certified credit counselor can look at your budget and advise you on additional ways you can protect your finances in these difficult times. Copyright © 2008, ARAnet, Inc.