The recession has millions of consumers spending less, saving more and paying off debt. The fact that we are adjusting to the reality of this economy is good news, to be sure. There are items in any budget that can be scaled back easily.

But there's some spending where you shouldn't budge. 

Retirement Planning
The Pension Rights Center counted about 20 corporations in December that announced changes to their 401(k) plans. Many others have discontinued or downsized their traditional pension plans. If your company is still offering matching dollars, you should keep kicking in money to grab them.

"To get that free money from your employer is so important for the long-term growth of your retirement nest egg. Especially now, with the down market, when you're dollar-cost averaging in at lower prices, that free money has more value in the long run," said Derek Kennedy, a financial planner in Cincinnati.

If your company has cut back, it still pays to contribute. Also consider an Individual Retirement Account. You can get your money out any time and, after five years, use it without penalty for a first-time home purchase.

Don't cut your homeowners insurance thinking that because home values have dropped you don't need as much coverage. What you're paying for is the amount it would cost to rebuild your home and replace your belongings. If you need to save, boost your policy's deductible. Raising it to $1,000 from $500 could shave 25 percent off the cost. 


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