WHAT TO DO IN AN ECONOMIC RECESSION

The present economic recession is actively being discussed, analyzed and debated, no matter what radio station you listen to, newspaper you read, or program you watch on TV.

You hear about people being let go from jobs they've been at for years. You hear about people that can't afford to live in their homes anymore and are forced to either move in with family or in some cases, just walk away from their homes and the lives they've been accustomed to.

Even people who are not in danger of losing their homes have been affected by this economic recession as the value of their home has fallen, and will more than likely continue to fall as this credit and housing mess continues.

All of this can cause a great deal of fear and stress, especially since an economic recession can go on for years. What are some things that we can do to have a defense against any economic hardships yet to come?

The unfortunate fact is that today's typical consumer carries a whole load of debt and not much in savings, if any at all. Credit card debt is high and most people have multiple credit cards, carrying debt on each card. The savings rate is so bad that the average person is at a negative savings rate, not seen since the Great Depression. All of this means that people are living beyond their means, spending more than they earn. Scary stuff.

One of the first things that can be done to survive this economic recession is to actually live within your means. Stop accumulating any further debt, and make a commitment to yourself to do this. If you live alone, this is a personal commitment to yourself, but if you have a family, it needs to become a family goal. Don't try to hide what's going on from your children and never underestimate their ability to understand, even if it's just a basic understanding. Every person in the family should understand why changes need to be made and how to make them.

If it means buying a winter coat at Walmart instead of The Gap, so be it. It'll still keep you warm.

If it means buying no name food instead of a favorite label, and actually having to bag it yourself instead of the bag boy doing it for you, so be it. Be thankful to have food in your cupboards.

If it means driving a Honda instead of a gas-guzzling SUV, so be it. You'll still be able to get to your destination.

If it means you have to actually cook something versus take-out or a restaurant, then go to the library and sign out a cookbook.

You get the drift.

These are all simple things that we can implement. We are a society of "I want" and "I deserve", and it's finally come to an ugly end.

And don't get into the "what will the neighbours think" syndrome. Who cares? They're probably worse off than you are. Just concentrate on your own family's business and let your neighbours take care of their own problems. Believe me, they have them too.

Once you stop the "financial bleeding", you can then work towards paying down your existing debt. Make a debt reduction plan. Of course, paying the bills for the roof over your head is priority. The car or cars can be "modified" as discussed above. The next thing to tackle is your credit card debt and getting rid of that as fast as possible. Please refer to the Get Out Of Debt page for details on how to do this.

At the same time, you will need to implement a Pay Yourself First program. Please read the Pay Yourself First page which will show you how important it is to start putting some money aside, even if it's a dollar or two.

Whether in an economic recession or not, dealing with debt is crucial. Working at improving your credit ratings and increasing your savings makes sense because it will help secure your financial future and help you start on your way to creating wealth.