Recession Proofing Your Finances: Top 3 tips to beat the economic meltdown

Now is the time to have a plan for dealing with a recession- even though we are already currently in one. The economy is a cyclical process and even though this notion means that it will come up again, it also suggests that there will, unfortunately, be another down turn in the distant future. These tips will prepare your finances for both good times and the not so good times.

If I've learned anything over the past several months in America's rocky economy, I've learned the importance of setting up finances to withstand the uncertain times of recession and economic turmoil.

Whether it is the fact that the "bottom" finally fell out of the Real Estate boom or the reality that bankruptcy can even hit the most revered and seemingly financially sound banks in America, we've all witnessed first hand how important financial preparation is to maintaining success even in a downward spiralling economy.

While it is important to note that a lot of situations are beyond our control during these times ie- the price of gas, employer layoffs, interest rates, and the cost of a loaf of bread -- there are still many things that we can do within our own finances to lessen the blow of these hard times.

Tip 1:
Cut unnecessary spending. Now is the time to begin to train yourself to live without the unnecessary which not only drain our time, but can also drain our finances. Think about downgrading or eliminating your cable TV/Internet package or maybe even decreasing the number of times you dine out weekly from three to one. Whatever it is you choose to eliminate, now is the time to go over your monthly expenses in order to determine where you are spending unnecessary money.

Tip 2:
Recognize the importance of credit. The recent "credit crunch" has really opened up a new wave of oversight from credit companies. A few months ago, a credit score of 650 or above was considered good. However, in today's market, individuals and businesses with a score below 720 are finding it very difficult to secure a loan or obtain new credit. In addition to paying bills on time and keeping your debt to income ratio low, there are many tips available (check out this link for YBR's tips) today with ideas on how to raise your credit score. It is wise to take advantage of these suggestions, especially in today's economic climate.

Tip 3:
Plan for the long haul. Even though the norm in American society is to get things as fast as you can and instant gratification is oftentimes our goal, this current recession has proven how important it is to engage in long term planning. Strive to begin saving at least 10% of your monthly income for a financial cushion. Many individuals who have unfortunately lost their jobs recently are finding themselves grasping at straws as they try to make ends meet. It is wise to have at least 6 months worth of expenses in a fairly liquid account in case of emergency. As cliche as it sounds, a penny saved is truly a penny earned.

Check out these and more finance tips in my new e-book, 30 Days to Success, here!
Do you have any other tips or advice on how you are coping with today's economic times??

To Your Success,
Alecia D.