Recession-Proof Your Life

Unemployment is on the rise, the stock market is hitting lows and prices are increasing on everything from a gallon of milk to a gallon of gasoline. Here are a few ways you can protect yourself:

1. Tighten your belt

Cut down or reduce spending that isn’t essential. Pay down credit card debt – which can add hundreds to your annual household budget. The average American household with at least one credit card has nearly $9,200 in credit card debt. And often that interest rate is in the mid to high-teens. Scale back any household renovation and pay down any home equity line of credit you may have.

2. Protect your job

The economy has shed 438,000 jobs since the beginning of the year. To make sure yours is not one of the next ones to go, make sure your boss knows your value to the organization.

Volunteer to help with any tasks left unfinished due to layoffs. Raise your profile with trade groups or professional organizations that could help you find a job in the event you lose yours. And update your skills by taking a class at a local college–consider it a career investment.

3. Talk to the family

Tweens and teens can easily push your household budget into the red. Enlist their help in curbing spending. Lead by example – share your savings plans and realities with them. If you are carpooling let them know it; show them your brown bag lunch. Practice what you preach.

4. Set aside a just-in-case fund

You always hear about the importance of setting aside an emergency fund of three to six months worth of savings – and the scenario today is the reason why – a slow economy poses extra risks and costs to the average family. Even if the high price of gas has you struggling to save, set aside some money on a regular basis.

The good news is that banks are desperate for deposits and paying more than they otherwise might for your money. Some banks are offering introductory rates as high as 4.65% on money market accounts.

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