| Looking back over the last 50 years, housing | | | | transportation. |
| downturns have usually signaled pending recessions. | | | | - Spend wisely by becoming a student of money |
| Now with the first employment drop in 4 years, | | | | saving techniques: There are many excellent authors |
| stock market fluctuations and the credit crunch many | | | | to help you save money such as Mary Hunt and |
| wonder if we may be headed that direction again. | | | | money saving blogs that provide a whole host of |
| Wall Street bulls, or those who have a positive | | | | money savings tips. Budgeting, limiting unnecessary |
| outlook, hope that strong global economies will keep | | | | purchases, and spending wisely can save you a few |
| things on an upward track. | | | | hundred dollars per month to help you build up your |
| To a great extent, the health of our economy rests | | | | rainy day fund - all with little sacrifice to your |
| on the shoulders of the American consumer's buying | | | | standard of living. |
| power. If we are able to continue spending, many | | | | - Develop your long-term goals. Having written goals |
| corporations may report positive results, which will | | | | and a mapped out plan of action puts your spending |
| buffer negative downturns. However, the consumer | | | | into the proper perspective. To get started list 10 |
| may be running out of steam when you consider the | | | | things you want to accomplish, these goals can be |
| low savings rates, high level of debt, home | | | | things you want to achieve now or in the future. |
| foreclosures and consumption of home-equity | | | | Secondly, get a financial plan. If you can afford to, |
| coupled with stagnant home prices. | | | | consider hiring a financial planner. Not everyone can |
| Tips for Financially Challenged Individuals | | | | afford a financial planner, and some people prefer to |
| Those in financial difficulty are more susceptible to | | | | do it themselves. Today there are more resources |
| the affects of a recession, because they probably | | | | available than ever to help you do a lot of it yourself. |
| don't have adequate savings or the ability to borrow | | | | Tips for Financially Healthy People |
| more without risking financial disaster. | | | | Some people are naturally good financial managers or |
| Negative financial circumstances can come at any | | | | perhaps have not faced financial setbacks. If you are |
| time such as a major car repair or large health bill that | | | | in this category, have a firmly established financial |
| isn't completely covered by insurance. But, if a | | | | plan, excess income and savings - recessionary times |
| recession were to occur there is a greater likelihood | | | | provide opportunities that you may want to take |
| of other consequences such as: | | | | advantage of. |
| - Corporate cut-back | | | | - Become self-employed and or buy a company. Are |
| - Difficulty obtaining credit | | | | you an experienced business person, with great |
| - Smaller wage increase | | | | ideas, work ethic and contacts but burned out in |
| - Bonus reductions | | | | your corporate position? Owners facing recessionary |
| - Inability to sell real estate | | | | times may want to retire or avoid enduring an |
| - Less overtime pay | | | | economic downturn. Your ideas may breathe new |
| - Slow sales and lower commissions | | | | enthusiasm and life into a business. Seek qualified legal |
| Prepare don't panic. Prepare instead in case you are | | | | and tax counsel to steer you through the transaction |
| thrown a financial curve ball. If you prepare, you will | | | | process. |
| be better able to face financial challenges when (not | | | | - Purchase discounted large items: auto |
| if) they come. | | | | manufacturers are already beginning to offer buyer |
| "What can you do?" | | | | incentives. |
| - Delay large purchases: you may want to put off | | | | - Invest: don't try to time the market by moving out |
| purchasing the new car or going on a big vacation. | | | | of stock mutual funds, but stay with the proper |
| You can always buy the item later, but you usually | | | | asset allocation (that fits your risk tolerance and |
| can't take it back. This particular tip could potentially | | | | return expectations) between stocks and bonds |
| save tens of thousands of dollars. | | | | funds regardless of short term economic forecasts. |
| - Accumulate money in savings or rainy day funds so | | | | When stock values decrease you get more mutual |
| that you don't have to pull money out of retirement | | | | fund shares for your money. You will likely enjoy |
| funds, borrow, or fall behind on payments during a | | | | great appreciation in your investment portfolio when |
| hardship. Savings can be invested in a money market | | | | the stock market goes up. |
| account earning around 5%, which isn't great, but | | | | - Purchase real estate. Real estate purchased for |
| much better than paying 18% on a credit card for | | | | investment purposes should always be for the long |
| emergencies. | | | | term since it can be costly to own and difficult to |
| - Develop and follow a household budget and limit | | | | sell, however recessionary times may provide |
| spending on discretionary items. Utilize good budgeting | | | | opportunities to purchase property which has gone |
| software to track all of your expenses. This way | | | | down in value. |
| you can see if you are overspending in any particular | | | | If you are wise and plan accordingly, recessionary |
| category. | | | | times should not affect you deeply. Plan now and |
| - Avoid unnecessary smaller 'want' versus 'need' | | | | make good decisions. Regardless of whether we |
| purchases. For example, your cell phone contract may | | | | enter a recession or not, proper planning can help |
| be due to renew, opt for the free or low cost phone | | | | prevent a financial disaster and hopefully increase |
| and avoid the multi-media entertainment devices | | | | wealth. Remember, the best years can be ahead for |
| unless internet and email is a must for your business. | | | | those who correctly gauge the signs of a recession, |
| - Since transportation costs are a significant | | | | take control of their finances, and seek ways to |
| household expense, you may spend less on gasoline | | | | grow wealth regardless of the financial climate. |
| by combining trips, car pooling and public | | | | |