Smart Choices for Riding Out the Recession
Time to regroup. To make smart choices. To control what you can control as far as your savings, investments, job and home are concerned. Here's how:
Layoffs were huge last year, and the U.S. unemployment rate has jumped to 7.2 percent. Most of us are in danger of being forced to cut back. If you only have a three-month emergency cushion, try to boost it to six.
"There is some interesting research about having an emergency savings account, and what that does for you from a mental health point of view. It makes you feel much more comfortable, and allows you to deal with emergencies if your hours are cut down or you lose your job," said Ted Beck, CEO of the National Endowment for Financial Education.
Where does the money come from? Use the Web to get the most from couponing. If you joined a car pool to save money when gas was $4 a gallon, don't quit now. Have cash transferred automatically to savings each time you get paid.
If you're going to buy, be realistic. Try not to allow the price of owning the home— including mortgage payment, insurance, taxes, utilities and maintenance (which can cost 1 percent to 2 percent of the value of the property annually)—to exceed 35 percent of your take-home pay.
Of course, do this while remaining diligent at work. Face time is important in this economy. When you do something great, take credit in a suitable way.
Jean Chatzky's Layoff Survival Guide