personal finance articles

To place this in context, "an additional $500 billion a year in interest expense would total more than the combined federal budgets this year for education, energy, homeland security and the wars in Iraq and Afghanistan." This is only part of the story as it does not include the costs of funding $350 billion collective deficits that individual states and local governments will run in each of the next two years. The obvious truth is that such a debt burden is unsustainable.

While the U.S. economy will undoubtedly grow by 2019, such growth is likely to be modest and fall far short of producing the types of tax revenues that could meaningfully reduce the deficit. Moreover, U.S. tax policy is so completely misguided that nothing less than a radical restructuring of the tax code would allow the tax laws to be used as a productive source of economic growth and stability. Accordingly, the U.S. government will have little choice but to monetize the debt through further debasement of the currency and/or inflation and will inevitably face increasingly higher costs for selling its debt. While the current arrangement of mutually assured destruction with its largest creditors (currently China and Japan) is allowing America to delay the day of reckoning, reports like that in The New York Times are increasingly calling attention to the coming storm.

Nobody can say precisely when the tipping point will come, but we investors need to begin preparing well in advance for what is likely to be an extremely ugly denouement for the U.S. currency and U.S. dollar-denominated assets. It is hardly a coincidence that the price of gold, which is the anti-fiat currency, has been inexorably rising as concerns about the unsustainable U.S. fiscal posture have been growing. Moreover, the U.S. is left with few politically viable choices to deal with its fiscal problems. The White House is considering forming a bipartisan commission to tackle the deficit, and certainly any solution is going to require bipartisanship in Congress and stronger leadership than we have seen thus far by the White House. President Obama’s inclination to leave the details of legislation in the hands of Nancy Pelosi and Harry Reid is, like the deficits themselves, unsustainable if real solutions are going to be found.

Other social programs are also going to be starved for funds because so much of the budget is devoted to debt service and other entitlement programs. Finally, support to states and cities, which are suffering from their own fiscal calamities, are going to experience cutbacks that effectively pass the buck to local governments that have been raising taxes and fees to plug gaping holes in their own budgets. The budget outlook is as bleak as we can remember, and this will ultimately have an extremely negative impact on equity and credit markets. It seems we are a long way from the type of strong sustainable growth that the stock market seems to be discounting. What we saw in 2009 was a rebound off lows that were based on a justifiable fear that the system might fail. Because the levels to which the market fell were so low, the rebound was very strong in percentage terms. In absolute terms, however, we are still well below pre-crisis highs on the stock market while valuations are fair to full.

The question remains whether the market deserves a reasonably robust valuation in the eye of so many economic headwinds or rather should more appropriately be trading at lower levels. Ultimately it will be the market that answers this question, but there are abundant warning signs that all is not well in the Wonderful World of Oz. Housing is not recovering in any meaningful way although it is no longer declining. Even where activity is increasing, prices are soft. According to Goldman Sachs Group, Inc., household wealth is down by $11 trillion from its highs, with household balance sheets suffering from the obvious decline in real estate wealth and the fact that the equity market has only returned to 2005 on a nominal basis and 2003/4 on a real (inflation-adjusted) basis. There was some relief when job losses during the week of Thanksgiving dropped to 466,000 (still a large amount) until it was revealed that "seasonal adjustments" added 78,000 jobs to the tally and the raw number was a loss of 544,000 jobs. The truth is that nobody really believes the figures that the government publishes anymore.

Fourth quarter GDP growth will likely struggle to exceed 3 percent, and early 2010 is shaping up as a similar slow slog even with continued government stimulus. In the face of this grim economic news, the stock market continues to stand its ground. It is certainly true that most S&P 500 companies beat their earnings estimates, although most of them reported lower revenues. Those numbers translate into sustained lower employment, which will continue to weigh down consumer markets. <strong>Equity investors</strong> should tread carefully in the months ahead as Mr. Market waits for evidence of which way the economy is going to move. From where Blackhawk is sitting, sideways is a far better result than we should expect or that we deserve. As much as we at Blackhawk would like to find a silver lining behind the clouds, the color keeps coming up gray – dark gray. In a comment that he probably came to regret the moment it escaped his lips, Goldman Sachs CEO Lloyd Blankfein recently told the Times of London that his firm was "doing God’s work." Shortly thereafter, Goldman pledged to invest $500 million in small business and charities while setting aside more than $20 billion for staff bonuses. Goldman Sachs’ is in need of a serious reality check and a radical reordering of its priorities. If a firm that earns 80 percent of its revenues from proprietary trading and leveraged transactions is doing God’s work, there is little hope for God or the rest of us.

The role of Goldman Sachs in the AIG matter will likely haunt Wall Street’s leading firm until it is no longer Wall Street’s leading firm. Goldman Sachs received the largest cash payment, $5.6 billion, in addition to being made whole on $8.4 billion of collateral it had already posted. It is therefore reasonable to believe that Goldman Sachs stood to lose at least $5.6 billion and as much as $10 to $12 billion (depending on the ultimate value of the collateral it posted) had AIG been forced into bankruptcy. Goldman Sachs has gone on to earn record profits in 2009 due to a combination of its trading and risk management skills and the low interest rate policy that the government has implemented in response to the financial crisis. The firm was a full participant in the financial practices that led to the crisis and as such bears its share of the responsibility for contributing it. It also bears responsibility for failing to exercise reasonably sound credit judgment with respect to surveillance of a major counter party, AIG. In other words, the firm’s credit judgment was hardly invincible yet it was still able to save itself by means of the bailout.

It is safe to say that without the direct and indirect financial assistance of the government, Goldman Sachs would be in far worse financial condition today and would not be enjoying the profits and balance sheet strength of which it boasts. Accordingly, the firm’s offer to contribute a paltry $500 million, which represents a couple of percent of its bonus pool, suggests that the firm is either politically deaf or morally adrift. If the firm wants to do God’s work, it has an opportunity to do so by making a meaningful contribution to charity or the U.S. Treasury in an amount commensurate with the amount of money that the U.S. government saved it when it bailed out AIG and lowered interest rates to zero. Something on the order of $5 to $10 billion would be appropriate.

Accordingly, they have already benefited sufficiently from the bailout and should be thanking the government for its support and urging management to do the right thing. Second, the shareholders have a legitimate beef with Goldman management that it continues to pay out too much of the firm’s profits in compensation and that more should be returned to shareholders in the form of dividends. The amounts of money being paid to financial executives continue to be nothing short of obscene, especially executives of large firms who continue to enjoy asymmetrical incentives that protect them from the risks assumed by entrepreneurs and other true risk-takers. The reality is that Goldman Sachs does not only have a perception problem, it has a cultural and moral problem that it needs to address before it threatens the firm’s hegemony.

Bottom Line:

It is a fact today that despite what the US Government is telling you:

- Many companies have debt coming due between now and 2013.

– Many of these companies have too much leverage.

– We see this possibly leading to a big wave of bankruptcies.

– We could see another financial crisis like the one of 2008 in which banks stopped lending to each other because they didn’t know which banks would fail next.

– Another wave of companies could be in trouble because their lenders are taken over by the FDIC and when they need to refinance their loans, they’re no longer dealing with bankers but with regulators.

– Without the time, patience, or experience to work things out or find a new lender to restructure the loan schedule, regulators may find it more expedient to liquidate company assets and put people out of work rather than go to the trouble of a workout.

About the Author

Ziad K. Abdelnour is a deal maker, trader and financier with over 20 year experience in merchant banking, private equity, alternative investments and physical commodities trading. Mr. Abdelnour has been a trusted advisor to a number of the largest family offices in the United States, Europe and the Middle East and a turnaround investor in a number of companies.

Getting involved the right stock broker is critical if you want to do well investing in the stock market. Commission costs are one of the factors to look at but there are other important things to look at. By evaluating a broker well in the beginning you reduce the chance of set backs both in a monetary sense and with frustration that could cut short your trading life. It can often be a little more complicated than following a simple guide like purchasing stocks in five steps.

Commissions are something that can turn a profitable stock trade into a loss in a heartbeat. Whether you profit or take a loss in the market the broker always wins and this must be accepted before you develop a trading relationship with one. Running a brokerage is a business and they are in the business of making money so don’t expect them to volunteer information to save you money on your transactions. Knowing what questions to ask will really help cut your costs sooner rather than later. One question to ask up front is how much do I have to have in my trading account to reduce the price of trading stock? Another question to ask is: how many trades does one have to make in order to get a reduced cost per trade? Both these questions will target the most common criteria for applying a price structure to your account. Usually a broker will require 100 trades per quarter (or more) to get a big discount. Another common amount that is used is $25,000 trading account balance (another is $100K) and that can significantly reduce the amount you pay.

Frustration that strains a relationship with a broker is mis-communication about how service charges are applied or even that they exist. Some brokers charge an administration fee for having a retirement account like a IRA or an RRSP. These fee’s can be waived if you have a certain balance in your account most of the time. And if you are close to the amount you can have it waved if you ask to speak to a manager when you call in. One fee that you should ask about is the cost of transferring or closing an account. If you are not happy with your broker and want to go elsewhere, there can be stiff fee’s applied on your way out. Having a $100 to $150 dollar charge for a transfer to another institution is common and unless you have other business with that broker or their sister company, getting them reversed can be a challenge.

These are a few ideas’ to help you identify whether a prospective broker is the right choice for you. Doing a little home work can save you headaches in the future and save you money. Always consider consulting an unbiased professional before committing to any contract.

About the Author

Picking a broker is something one should take time doing. Don’t use a short cut as this can lead to problems later.

There is a dearth in proper planning and controlling of finance where people in India are concerned. The main objective in today’s world is not only money, but how to put that money to good use to take care of all your future needs! And with responsibilities such as proper education for children, basic household needs, family welfare and health, medicines and hospital charges and even the occasional need for travel and outings the need for personal financial planning in India becomes all the more necessary.

The Indian economy is showing a consistent growth rate and with more and more investment and finance companies cropping up, both in the government as well as private sectors; the Indian financial sector is becoming one of the best and preferred investment options. Most of us do not have the appropriate financial plan to invest and save money for the future, and therefore are not able to meet long term future needs and other financial requirements. Private wealth management programs are therefore very necessary which offer personal financial planning in India to the service class, businessmen, retired professionals etc. These wealth management companies have professional and qualified financial planners who offer wealth management consulting in India.

People prefer personal financial planning industry in India since it helps them to manage their wealth in a proper and systematic manner. The best method to do this is through private wealth management companies that provide a planned and disciplined approach for accumulating, growing and protecting the consumer’s wealth. The basic rules or ingredients of this process are financial diagnostic, sourcing best fund managers and investment ideas, execution and investment performance monitoring and risk management. Wealth management consulting in India not only offers mere services, but also strives to preserve, protect and enhance the hard earned money of their clients for the future.

It is a very common misconception in India that you need some amount of ‘extra cash’ in order to save money for the future. In reality, having a proper saving and investment plan, what we call as ‘budget’, is actually what will help you with your future needs. The private wealth management will help you set your spending goals so that you have the habit of saving regularly. And goals that are not put into writing remain as dreams only. This is where offices of wealth management consulting in India come in. They will help you to be financially literate, provide solutions for best and timely use of credit and money and help you make important financial decisions for yours as well as your family’s future. They will teach you the benefits and options of saving money for your future needs in a separate account or under separate saving schemes; so that they are never interfered with, even in times of urgency. Such companies can also be termed as ‘family office firms’ that offer a professional platform for private wealth management in India. Proper and intelligent investment is the key to a happy and secured future and personal financial planning in India is the need of the hour.

About the Author

Yogesh Kumar has 2 years experience in Internet Marketing and currently working with SEO Company India. If you are looking for Private Wealth Management Services in India, client Associates is a better Private Wealth Management Service Provider.

What to pay attention to

When you have thought about it long enough, you will agree that you ultimately have 3 goals for your retirement protection, or in fact any wealth creation:

1. Safe

You want that it’s safe. Because if it isn’t safe, you might end up with no protection, no wealth.

2. Quickest

Once you know it’s safe, next you want that it’s quickest. Because if it isn’t quickest, you might not yet be protected at the time you need it.

Once you know it’s safe and quickest you might say “That’s it, now I am happy!”, because you know you have a safe retirement protection at the earliest possible time. However, you may still have one more goal.

3. Effortless

Ideally, you want that it’s also effortless. Because if you have to go at great length and into trouble for your retirement protection, you might hesitate to start at all, or to keep going.

This article (Part 1) gives answers to the first goal.

What is safe?

1. Real not nominal

What do you actually do when you put money aside for the future?

First, you don’t put money aside at all! Instead, what you really put aside is purchase power. Hence, in the future, you want your today’s purchase power back, not money!

The purchase power of 1000 you put aside today is 1000 today. But the purchase power of 1000 you put aside today probably is no more than 439 in just 20 years time if you live in the USA, and probably no more than 306 in just 20 years time if you live in the UK.

This forecast is based on the long-term average inflation in the respective country, hence the reality in the future may be even worse, far worse. Since your first goal for your retirement protection is that it must be safe, you will not argue “The reality in the future could also turn out to be better”. Could is not safe.

Second. So what do you actually do when you put purchase power aside for the future? What you do is, you forgo the availability of your purchase power, because you give it to someone else. Hence, the immediate question should be: “For how long?”

For how long do you plan to forgo the availability of your purchase power?

Your answer then determines your maximum time frame for your retirement protection. At the end of your planned time frame you want the real purchase power back, not the nominal money!

Accordingly, when you want to preserve some of your today’s purchase power for your retirement protection, you don’t want to choose any monetary assets. Since monetary assets correspond to debt instruments on the financial markets, you don’t want to choose any debt instruments either.

Therefore you will want to avoid for example:

• Cash and cash equivalents
• Savings deposits
• Time deposits
• Various savings agreements
• Mortgages
• Bonds and debentures
• Bond Funds
• Money market funds
• Property funds
• Pension insurance
• Endowment policy

2. Win-Win agreement

Naturally, a Win-Win agreement is highly likely to be safe, because your counterparty only benefits from the contract if you benefit too. Conversely, a Win-Lose agreement bears high risk for the party that is the loser, while it provides a high profit for the party that is the winner, because what the loser loses the winner gets on top!

In the financial sector most contracts are Win-Lose agreements. Guess who’s the loser?

If you want your retirement protection to be safe, you will want to avoid Win-Lose agreements. Most notably, these are contracts that require you to pay or to accept a lump-sum fee. For example: When your counterparty pays you interest, it’s a tiny fraction of the profit your counterparty is making. When your counterparty is making more profit, you don’t get more interest!

Note: Don’t be confused by the distortions of taxation. Long-term, as retirement protection is, no company can exist on tax benefits (like tax-deductible interest cost). Instead, long-term all company payouts, and therefore your fortune, are determined by its economics only. In short: What’s relevant is profitability, not profit.

3. Basic human desires not speculation

When your retirement protection is based on basic human desires, it is safe. When it is based on speculation, it is risky.

A basic human desire is to make a living. Accordingly, people go to work or they work from home to make a living. If you participate, in other words, if you share in people’s basic desires you will always profit long-term!

Conversely, if you speculate on the future price of an asset, for example the price of property, you rely on hope. The hope that the future price, at the time you want or have to sell, will exceed the sum of 1) your initial purchase price, 2) all further amounts you have spent before you sell, and 3) the time decay of money of all these amounts! If you rely on hope, your retirement protection is risky. Long-term even more than short-term.

Compared to these three, other factors for a safe retirement protection are minor. For example the risk of insolvency should be avoidable or immaterial, and transaction and administration cost should be kept low so that they do not quietly eat away your retirement protection.

To be continued in Part 2.

© DBMG Bennett 2000 – 2010. All rights reserved, see http://Affluability.com. This article has been made available free of charge to Article databases and their Affiliates. Nonetheless, the copyright of course remains with the Author. For more FREE financial competence go to http://Affluability.com.

About the Author

Investment Strategist, Writer, Mentor, Trainer, Public Speaker by choice.
Qualified Private Banker, MBA, MSc Economics, Qualified Accountant by education.
See http://www.google.com/profiles/DBMGBennett
or see http://Affluability.com

In recent years with the economy being unpredictable it has become fashionable to use quick cash loans. Emergencies arise in all our lives and a quick loan can help us through that time. They have become an easy and convenient way for many people to deal with temporary periods where there is a lack of funds, and provide people with funds that they can use in creative ways to alleviate the temporary setback.

Many of us nowadays have found that stretching the almighty dollar leaves us with few options. We have to budget to take care of the everyday expenses. Quick cash loans allow us all to navigate through our lives more efficiently. We can use a quick loan for various weekly expenses.

Have you noticed that extra expenses always seem to pop up at the worst possible times? Whether it’s a medical problem, new clothes for the kids, or other school expenses there is never a convenient time for these expenses to come up. And when they come at the worst possible times there are services you can use to get through.

Emergencies befall us generally at the wrong time and catch us ?cash poor?. How many times has someone had a flat tire along the road and found out they need a whole new set of tires? Water heaters burst in the night for thousands of people every year causing flooding and damage to all their personal belongings.

Car problems are a special case. Sometimes it seems like the car has a mind of it’s own and trying to talk to you when it breaks down. Good thing you can get a quick cash loan if you need to make the repair to get to work.

If you really look at it, your financial problems probably come from a bunch of small bills that have all added up or piled up. It’s the extra fill-up on the car that causes problems. Or maybe it’s the utility bills. Any of these can leave you a few dollars short.

So the next time you have a small financial setback or emergency, you may want to consider a quick loan as one possible option to getting through the tough times.

About the Author

There are a lot of ways that you can use quick cash loans to get out of a sticky time. Consider your options carefully, but also consider quick loans as one way to get out of a tough financial time.

Public Liability Insurance policies are being accepted by many organizations and private firms who have employee caring policies. Public liability insurance policies cover risks due to losses resulting from legal actions against the policy holder. Caravan insurance policies have very broad definition. Caravan insurance policy may mean static caravan policy or it may dynamic or tourer caravan. Tradesmen insurance policies provide cover to any kind of trade done with public or any service provided to public clients. Public liability insurance policies are generally demanded by organizations for benefit and safety of their employees, whereas tradesmen insurance policies may be opted by any person with small, medium or big business. Any consultant, professional freelancer or organization group would like to go with the option of tradesmen insurance policy. Due to excessive interest and demand for these insurance policies, insurance firms are now in race to provide the best solution for one’s need in any category of above three.

To find best deal for public liability insurance you need to consult with legal adviser or according to your business need you can select the option which is best suited to you. For tradesmen and Caravan Insurance policies we would say that first one needs to understand what kind of and how kind of insurance cover does he want to offer to his employees and properties. After doing these one can consult with insurance policy officer and choose the best deal. As I said, insurance policy firms provide enough guidance about whether to choose caravan insurance policy, Tradesmen Insurance policy or public liability insurance policy and of course which plan to choose. These insurance policies are available with online firms too and they do offer attractive discounts if orders are booked in large numbers. Its better to do some research before going with any particular insurance policy.

About the Author

The More Insurance website provides in-depth, independent guides to the many types of insurance policies available, beyond the normal, such as Public Liability Insurance, Business Insurance, Caravan Insurance, Tradesmen Insurance and many more.

Divorce changes a lot of things when it comes to your personal life and your credit score. Many divorces leave the newly single people asking how do I fix my credit now? Divorce can complicate who owes what, and the credit bureaus and creditors do not have to make changes based on how the judge rules or how you decide to split property. You have that responsibility. Failing to live up to that responsibility can have you waking up to a disastrous credit report. Disclaimer here. This is not legal advice, only personal experience being related. Please contact legal counsel before making any financial decisions.

In divorce, a judge will issue a final decree as to who get what. The property and the bills. That settles it as far as the court is concerned, but not how your creditors view it. You made debts as a married couple. They will hold both people responsible, and report to the credit reporting agencies in that fashion, until you get them to make a change in their records. Many creditors will have different standards as to what they will accept as proof of their new business relationship. Count on sending a few copies of your divorce decree to different people until you get the problem solved.

Creditors really aren’t concerned about your personal issue. They just want their money. Make contact with your creditors as soon as possible and follow through to get your name removed from accounts the court has assigned to your ex. This is very important as you work to “fix my credit.” Your ex holds a bit of leverage over your credit report if you don’t complete this important step.

I’ve seen mistakes made like this. Your ex is assigned a debt in divorce court. You leave secure in the knowledge that you don’t have to worry about this anymore. That’s wrong. Until you contact the creditor and follow the procedure to get removed by them from the debt, your ex’s failure to pay is the same as if YOU failed to pay. I can’t stress enough how this is a critical step in the question of how do I fix my credit following divorce.

Just because you are now divorced, don’t expect your credit report to instantly get better. If you had bad credit during the marriage, it will be as bad, maybe even worse following the divorce. Remember, a credit reporting agency is just a place where records go to be retrieved. They are a living history lesson on how you pay you debts.

Fix my credit following a divorce can be filled with a lot of drama, and a few misunderstandings. Be certain to cover all questions about credit and debt with you attorney before the decree is finalized. Protect yourself and use the divorce as another lesson in how to “fix my credit.”

About the Author

R. Massie is crawling out from debt mountain and getting his credit report up to speed. Read more about it on his website and put the tools he describes to use.

Financial aid for students features

When it comes to financial aid for school there are mainly two sources: privately funded financial aid and financial support from federal funds authorized. When applying for or receiving any, you must make sure that you are fully aware of all those involved in the fine print. Most people find that the cost of college, too great to afford without the help of a kind. If you are a parent, chances are that you will always pay with the need for a college education, compared with anxiety, both on the ground, you will be able to achieve this goal.

The problem is that not every student who wants to attend university or to get help, state-sponsored student or require an overwhelming majority of grants that are either exceptional grades or a specific and exceptional talent to to receive. For students thinking outside the box may be necessary to obtain the much needed educational assistance or financial aid.

If you are not eligible for federal financial assistance for your children, you can look at other options in favor of a scholarship. To provide a common option that is often overlooked in the ROTC program that most universities offer. There is a fee for these scholarships, but many find that price provides valuable experience and worthwhile training and experience gained in this process. If your child is not interested in the possibility of a military career or to an officer who is a long way.

As parents, you can see what, if anything, to flexible spending accounts, creation of your state, help you get the money needed for college expenses for your children. Many states have this and there are programs such as Upromise, which you and others the cost of credit cards that are used as a compliance program for your child’s school to devote resources. While perhaps a dollar for dollar match with your credit card spending every bit helps. The real beauty of programs like Upromise that you are getting the support of the Friends of the family, saving for your child’s school education costs. Nevertheless, it is never too early to start saving for your child’s school appear to education, and these costs increase exponentially.

There are many programs that help minorities and women to exist, the cost of their education costs. Some of these scholarships must, while some of them, which alone merit. At all levels, the competition is tough, but if you apply for one of these grants into account, you’ll be doing yourself a disservice not to them. You never know if the application can be the one that captures the attention Scholarship Committee. One thing you must remember to read all the instructions, copies of everything and follow the instructions. Youd be surprised how much it costs to applicants denied scholarships each year because they did not follow the instructions on the application form correctly. Another thing you should have in mind the accuracy. They are much more likely to win a scholarship if the committee can actually read your statement.

There are many more opportunities for financial aid when it comes to school. The trick, usually in search of the great sources. Your financial aid office of colleges is an excellent source of information for financial aid and your high school counselor. See what options you have before you sacrifice a dream to get an education in the school.

PPPPP

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About the Author

author is admin loans – he also writes about government student loan consolidation|direct student loan consolidation

One fine day, after ignoring the state of my finances for a few years, I pulled up my socks and steeled myself to look through my account. I had been giving myself the excuse that I could not monitor my finances. I had been getting away with it when I only had 2 toddlers for kids. But now that a 3rd one was in, and the first 2 are going to school, I could no longer afford to put off my analysis of my finances.

It really wasn’t pretty. I had been exceeding my disposable income every month sometimes by up to one thousand dollars. I was looking through my debit account though. I realized that although it only shows how much has been drawn, I could still look at how much was drawn in between salary credits.

After taking into account some of my big expenditures and some big amounts I had to pay for my third daughter’s medical bills, it still came up to a hefty amount. Since all the big amounts had been accounted for, all that remained were the small but somewhat numerous amounts.

One of the things I have decided to do to stay within my monthly salary is to eat a little less extravagantly for my daily meals. Unfortunately, I can eat somewhat extravagantly and cutting down on a dish could also help my not so small waist line.

One thing I have also decided to do, but tactfully, was to quietly reduce the amount of shopping time I spent with my wife. I simply acted as if I wasn’t free to go out with her for shopping, although I did have time to take walks with her in the park. Its much easier to tell a little white lie than tell her our expenses have been a little high. Thankfully though, she herself is quite conservative in her spending.

Check out Wooden Porch Swings here.

About the Author

http://www.swingsforchildren.com/wooden-porch-swings

A recession is widely defined as a decline of the economy; particularly in the Gross Domestic Product (GDP), employment and trade. In order to be classified as a true recession, the decline must last for at least six to twelve months. Some economists argue that we are already in a national, (if not quickly approaching a global) recession. The actual term is an economic term, but the effects are felt by everyone. If you yourself have not begun to feel the effects of the current downturn, you surely know someone who has.

The best way to prepare for a recession and the effects it can have on your situation, is to take a multi-pronged approach. Realize that you could take hits from this economy in different areas of your life. Take stock of each area and determine the likelihood that the recession could cause trouble there, then prepare yourself accordingly. Below are some tips.

Your Job

One of the most critical and likely ways the recession could distress your financial circumstances is losing your job. Thousands of Americans have already lost their jobs, and unemployment is at an all-time high. If you start preparing now for the possibility of having to replace your source of income, you will have the upper hand on the competition (who may or may not also be prepared). Update your resume and polish off a base cover letter to edit and use for each opportunity you come across. Be more active in your networking circle, and start talking about your achievements or positive accomplishments you’ve made at work. Also, be open-minded and consider what alternative career paths or ways of making money. Be creative. Don’t forget to try to put extra money into savings while you do still have a steady income. This can help stretch the limited dollars that unemployment benefits will pay you.

Your Home

Another event that is happening more and more across the nation is that homeowners are losing equity in their homes or going to foreclosure. There is much speculation about what is going on with the real estate market and the effect that more stringent lending qualifications are having on it. If your monthly mortgage payment is starting to become unmanageable, you are not alone. Create a contingency plan for what you would do if you were no longer able to pay your mortgage. Include calling your bank and speaking with an attorney to investigate the chance of getting your mortgage modified according to the stimulus bill passed in February. Finally, prepare for the worst. Understand that if a true recession lasts, it will not be uncommon that you, friends, family members or other loved ones may lose your homes. Swallow your pride and make a plan B budget that allows for expenses involved in finding a rental home or apartment, even if it is temporary.

Your Retirement Account

Whether you’ve been contributing to a retirement account for years or just barely started, you’ve surely heard that risk flattens over time. Surely this statement is more comforting to young people with years to go until retirement. Unfortunately, you may be reaching retirement age during a recession, when the markets are down and most invested retirement accounts are down too. If this is the case, you may realize that the current state of your 401K, pension fund or IRA will not be enough to support you into retirement. The best advice is to expect the best and prepare for the worst. It is a good idea to plan on extending your retirement age by a few years, or to plan to work a part time job after you retire. This can be a pleasant thing if you choose something unrelated to what your career was and if it is something you enjoy.

About the Author

Terry Mitchell is a software engineer, blogger, and insurance expert from Virginia, USA. He owns and operates Foxrater – http://www.foxrater.com – the premier insurance finder site on the Web. It allows people to enter their zip code and compare free quotes from auto, home, health, and life insurance companies in their area.