Financial tips for tough economic times: Feature Article

When times are hard people worry about losing their jobs, investments going down the drain, retirement accounts, and more. Finances are a tough thing when the economy turns town, so what can you to do maintain good financial health, and feel good about life when times are hard?

Here are ten financial tips for hard time economically:

Tip 1. Pay off debts.

Too many people think that if times are tough they should hunker down, and just pay the minimum payment on debt so they have more money left over. However, this is simply not the case, if you do not pay down debt you end up owing far more, plus the toll debt takes on your life, sanity, and financial health is huge. So, instead of paying as little as you can on debt, pay your debts down as aggressively as possible. Start with your highest interest debts, and pay them off first. Then move on toward other debts. As you pay off one debt, continue paying that amount out each month, but either put it toward another debt, or into savings. In addition to paying off the debts you have, do not get into any more debt. This is especially stupid when the economic times are uncertain. You can't know you won't lose your job, etc. So, get out of debt, and stay out of it. Start with your highest interest debts, and go from there.

If you evaluate what you are spending your money on each month there is a 100% chance you will find a few unnecessary expenses, no matter how much or how little you make. For most people, the places they can cut back is their entertainment. They can get a smaller cable package, a cheaper cell phone, rent fewer movies, or return them on time, not get the newspaper, etc. Do you have a land line and a cell phone with a large amount of minutes? Do you pay for channels you never watch? Are you paying for extra phone features like call waiting, three way calling, etc.? What monthly expenses can you cut out?Consider things like movie rental subscriptions, magazine subscriptions, newspaper, cable or satellite TV, land line phone, cell phone data plan, etc.

Tip 3. Do things to be more valuable at work.

When times are tough economically people start to worry about their jobs. If you want to feel more secure in your job be sure you are someone you would never want to fire. Be more pleasant to your co-workers, be helpful, be efficient, and make yourself as irreplaceable as possible. If people really like you, and you are good at your job, there is a significantly smaller chance of you getting fired.

Tip 4. Keep investing, especially in your retirement accounts.

Just because the market is down does not mean you should stop investing in it. In fact, sometimes that is the best time too, especially if you have money to do so, and time to let the market bottom out and rise up again. If you invest during an economic downturn, when prices are the cheapest, and then the market rebounds, you will probably make your money back, and you will feel great about it. Of course you want to make sure you limit your losses in case it does not rebound. Instead of pouring all your money in, just don't stop putting money in, instead contribute a regular amount over a regular period of time. Chances are you won't regret it. Plus it can help the economy out.

Tip 5. Have a cash fund.

One of the things people worry about the most with financial tough times is that their bank will fail and they won't have any money. This is because history has horror stories of this. Banks are FDIC insured, and they insure your deposits up to $100,000, so you do not have to worry quite as much, however, if your bank fails it could take weeks, if not months to get your money back. This is a long time to not have money for life expenses like food. So, it is always smart to keep a few weeks worth of cash on hand in case there is a run on your bank. Obviously if you keep large amounts of cash on hand you will want to do so in a secure place, and not publicize it. It might also be wise to keep smaller bills on hand. This can come in handy should you need to barter, etc. If a store does not have change, and you need bread and only have $100 bill, you might end up paying more than you should for your goods. It is worst case scenario, but during tough economic times, planning for the worst, and being prepared for it often leaves you in the best position.

Tip 6. Reduce your energy expenses.

You can't stop using utilities, but there are ways to be more efficient, and when you are looking at tough economic times, this is a financial tip that can go a very long way. So, start taking slightly shorter showers, only wash clothes that are actually dirty, car pool if you can, use public transit if you can, turn the television off when you are not in the room, use natural light, and more.

Tip 7. Don't look if you can't take it.

A lot of times people who face tough financial times freak out and do things they will later regret. For example, they check their portfolios too often, and sell because they see things dropping. They take big losses, and it is usually because they panic and sell based on irrational, emotional reasons. So, if times are tough, and you do not need the cash from the investments to pay your bills, then do not bother checking investment accounts or checking stock quotes, instead, cut out your financial anxiety, and do not bother with selling, stay in for the long haul. It will be well worth it, and you won't regret it, especially when the market turns around.

Tip 8. Claim more on your taxes.

This is going to mean that you do not get a tax return, but it means that on a monthly basis you will have more money available to you. When times are tough and money is tight, then you will appreciate the little extra you get. Why not make interest off that money yourself instead of letting the government earn interest off it. Just be careful not to over claim because you may end up owing come tax time, and that can be a stress that some people cannot handle. So, talk to your financial advisor or a tax professional before you make any changes.

Tip 9. Save money.

One of the best financial tips you can follow besides paying down debt, is to grow a bigger savings account. What are you going to do if you have something come up like a car breakdown? If you have no money to pay for it, and can't get to your work, then what do you do to pay your bills? Having a savings account can mean that if you lose your job you have some money to live off of for the time being. If you can do it, be sure to save enough money for 3-6 months of expenses. If you can, try to save enough to cover your expenses for a whole year. A good savings plan can keep you out of debt, and can help you ride through rough times, job loss, and increased expenses due to an economic downturn.

Tip 10. Learn the difference between needs and wants.

Anyone looking to improve their financial outlook, no matter what the economy is like should learn how to be content with what they have, and learn the difference between needing something, or wanting something. Often people spend untold amounts of money on stuff they think they need, but actually just want. For example, you may need a car, but does that mean you need the one with the heated seats and cup holders? One of the best ways to help yourself to eliminate the need versus wants is to never buy something right away. Instead of buying things as soon as you want them, wait a few days, and then see if you still need it as much as you thought. You will probably save some money and you won't have nearly as much stress because you won't get into debt as easily.

When you want to make it financially during tough times, it is a good idea to follow these tips, and recognize your own problems. If you are an emotional spender, that is what you should work on. If you stink at saving, figure out ways to pay yourself first. If you get scared too easy and make bad market decisions, then don't log on to your investment accounts. It is up to you to determine what financial areasyou struggle with the most, and then practice good financial habits elsewhere as well.