Recession is defined as a significant decline in general economic activity extending over two or more consecutive quarters. That cold, clinical definition doesn't begin to describe the tough times you, or people you know, may be going through.

If you are one of the newly unemployed, or in danger of losing your house, undoubtedly your world is turning upside down right now. Even if your job is not at risk, seeing coworkers "let go" affects you. And even if you can pay your mortgage, the knowledge that others in your neighborhood cannot may add stress to your life. Understand that whatever you are feeling, you are not overreacting. It's important to allow yourself to have feelings. Remember, you haven't done anything wrong. You haven't failed in some way. Give yourself time to grieve over any losses, to talk about your situation, or to just react however you need to.

Then what? Get in control, prepare, and stay sane.

Control What You Can

Yourself: You can't stop your company from downsizing, but you can downsize your own personal stress level. Keep yourself healthy. Exercise, eat right, and get enough sleep. Yes, it's easier said than done, but letting yourself get sick doesn't help you in any way. Try to stay positive

Your spending habits: Whatever happens with the economy, having more savings and less debt is the smart way to go. Sometimes just the process of not spending money can make you feel more in charge. Think about expenditures. If you really need it, buy it. If you really want it, wait.

• Take books, CDs, and DVDs out of the library.

• Before making necessary purchases, look for coupons and bargains in circulars, in newspapers, and on the Internet. Negotiate with retailers. And don't forget to cash in on any rewards programs you belong to.

• Be frugal! Frugal does not mean "cheap," it means "being careful in the use of resources."

• Yes, go out to dinner with friends, but just order an appetizer or share a main dish. Skip the wine, dessert, and/or coffee.

• Browse the Internet for suggestions on how to save money.

Your credit cards: Pay as much as possible, or all, of your monthly credit card bill and--this is the tough part--don't use your card(s) unless absolutely necessary. (If you do need to use your credit card, make sure you set aside enough cash to pay off that charge as soon as the next bill comes.) The one-two punch of paying down your debt AND not making additional charges will help you feel more prepared for the future. Where can you find extra money to include in credit card payments? If you don't buy those lattes and don't eat lunch out every day that can add up to $4,000 a year!

Your future: Be prepared:

• Take a class to explore to new career possibilities.

• Update your resume.

• Improve your marketable skills.

• Learn how to invest your money

Your Children

How do you explain what's going on to your children? Don't lie to them, but also don't scare or stress them. Kids are smart and either sense or know what's going on. Instead of saying, "We can't buy you the expensive jeans you want because we're poor," try saying, "Right now we need to be careful with our money. We'll still get you what you need, but at less expensive stores." If older children still want higher priced items, perhaps they can chip in on the cost. This is a good time for kids to learn the value of a dollar.

If you can no longer afford to pay for your teenager's college education, he or she may need to transfer to a city or state university or get a job. Consider other tuition ideas, such as student loans, instead of adding to your own debt. And remember to contact the financial aid office at your child's school.

Get Good Advice

If you need credit counseling, use a legitimate resource, such as the National Foundation for Credit Counseling (NFCC). On the NFCC website, you can find an accredited counselor to meet with in person, by phone, or over the Internet. Before picking any agency or counselor, check with your state Attorney General and/or the Better Business Bureau for any filed complaints.

Stay Sane

Limit your exposure to the news. The media tends to put a spotlight on the worst news it can report. Don't bury your head in the sand, but don't become transfixed by the bad news. You have better ways to spend your time, such as taking steps to gain control over your finances and finding economical ways to enjoy life.

Conclusion

In these rough times, you can remain on course by spending less, taking care of yourself and your family, and trying to be positive.

© Harris, Rothenberg International, Inc.

Reviewed 05/10