Thursday, July 3, 2008

Thursday Money Tips: Surviving the Bear Edition

Each Thursday Ms. Moneypenny publishes 5 money tips. Have one you would like to see listed? Post it in the comments, and I'll file it for possible future use.

Okay, the economy is bad. So, you know this. And most of us are a teensy bit worried. Or more than a teensy bit. It's pretty clear things might stay bad for a while too. Instead of panicking though, be productive. Fear never gets anyone anything except sleepless nights and migraines.

Unless of course you are currently being chased by a wild carnivore with significant landspeed capabilities, and big shiny sharp teeth, that is. Then you may panic to your heart's content. Presumably though, you'll be focused on running and not on reading this blog in that case.

For those of us not being chased by a hungry leopard, here's 5 things to help you breathe easier. Some of them I've mentioned before.

1. Rebalance your portfolio, then leave it alone
No, you may not panic. Put down the phone and stop screaming 'sell, sell!'. The market goes in cycles. If you've invested in well-rated no-load mutual funds or index funds, then check to make sure you aren't overly invested in a single type of industry or area, and then keep contributing. You are 'buying low' - and that is a good thing.

2. Cut back on nonessential spending
This is a good time to build up a good amount of padding in your savings account. List out all your expenses - cell phones, car, cable, etc - and think seriously about what you can cut. So your kids hate you for taking away free texting? Better that then staying awake nights worrying about how to pay the bill. Here's some Cheap Alternatives to Cable TV

3. Take that savings and....
All that money you are going to save by trimming the eating out and cable budget? Put it away for a rainy day. Experts recommend 3-6 months worth of savings in an emergency fund. Even if you can't get there, the more you have, the fewer panic-ridden days you may have. Consider using ING Direct

4. Work harder and smarter
Now is not the time to be surfing the internet or texting your boyfriend from a meeting. Volunteer for projects. Offer ideas. Help others be successful. Having a paycheck is better than contemplating cardboard box living.

5. Figure out what is important
It isn't the expensive activity that should count, it's the time with the people you do it with. Try these 72 ideas to simplify and focus on what really matters.

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