5 Ways to Recession Proof Your Finances
5 Ways to Recession Proof Your Finances
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Nervous that an unsteady economy could topple your finances?В Dont panic!В These steps can help you stay steady in turbulent times.
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1. Do get out of debt ASAP.В One of your best investments in difficult times is to pay down your credit card and high-interest debt as soon as possible.В And if youve been playing the balance transfer game, look out: those zero or low-interest balance transfer offers are likely to become a thing of the past as credit card issuers tighten their belts.В Your best bet in uncertain times?В Pay down your high-interest debt as soon as possible.
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2. Dont raid retirement accounts. When times are tight, it may be tempting to make early withdrawals on your 401(k) or Individual Retirement Accounts (IRAs).В But raiding your retirement account is one of the worst financial moves you can make.В Youll get hit with stiff penalty fees, not to mention your loss in future earnings.
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3. Do increase your cash stash.В A great way to protect your self in uncertain times is to have a cash cushion of three to six months income in case of emergencies.В When that car repair or other emergency comes up, you wont have to charge it and increase your revolving debt.
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4. Dont rely on credit for daily needs.В Its a scary trend: more and more people charging essentials like groceries, gasoline and health care costs.В If this sounds like you, this is a serious red flag that your lifestyle is out of balance with your income.В Take steps today to downgrade your lifestyle (downsize your house or car) or increase your income (get a roommate, start your own business) and get your finances in balance.В Financial experts recommend spending no more than 36% of your pretax income on all debts, including your mortgage.
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5. Do review your debt and consider consolidation.В Only 39.5% of respondents in a recent survey could determine how many years it would take for the amount they owe on their credit cards to double.В Do you have a handle on your debt?В To find out how you can get a handle on your debt and avoid a crisis visit www.primericafna.com for more information.
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Sources:
MSNMoney.com, viewed April 2, 2008
USA Today, February 29 March 2, 2008
Money, March 2008
USA Today, February 7, 2008
CNNMoney.com, viewed February 26, 2008
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