Tip #1- Get a firm grip on your finances. Make a simple list of your income and expenses. Add up all your debt and debt payments. Find out if you are spending more money than you are making. This seems easy but it can take some time to see where you stand financially. Once you get a clear picture of your finances, making changes are easy to see.
Tip #2- Try to pay off debt...if you can. Notice I said "try". Not everyone is in a position to pay off debt. Some people are struggling just to make minimum payments each month. So, if you are in position where cash flow is a problem, focus your resources on the basic necessities, food, shelter, clothing and transportation. If you have money left, add half of it to a simple savings account and use the other half to make debt payments.
Tip #3- Get brutal cutting expenses and stockpile money. If you cannot afford a cell phone, get realistic about it and turn it off or go to the most basic plan. To be honest, cable tv and the internet are also luxuries. Those 3 expenses alone could add another $200 to your savings each month. Don't listen to politicians that believe you should go out and spend everything you earn.
Tip #4- Keep your vehicle in good running condition. Your vehicle will last longer, and although maintenance does cost money, it still is a lot cheaper than purchasing another vehicle. Plus, if you are saving money like I suggest, you can start to build up an emergency fund of cash for car repair bills or for the purchase of another car.
Tip #5- Be Flexible. The future is uncertain and if you can be flexible and react to changes in the current economic state, you will be much better off than those that stick their head into the sand and ignore reality.
About this Author
Mike George wants readers to prepare for the worst case economic scenario. You can get more information about financial defense strategies from the double dip recession that is coming at Recession Defense
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