When it comes to the gloomy economic forecast, you probably feel like you've heard and read it all. After a while, all the bad news becomes paralyzing. But remember, forecasts are meant to help us decide what to do, not keep us from taking action. And believe it or not, there really can be a bright side to falling stock prices, declining portfolios and lower home values, depending on your circumstances.

So instead of looking only at the negative, here are a few positive things you can do to shed a bit of sunshine on your own financial situation.

Cut Your Tax Bill By Converting To A Roth IRA.

Has your traditional IRA been hit by market losses? If you're like most people, you may be looking at a double-digit decline in your retirement savings. Can you turn this into a plus? Possibly -- by converting your traditional IRA into a Roth IRA.

With a Roth IRA, there are generally no taxes on withdrawals. And there's no Required Minimum Distribution at age 70 1/2. So converting now can save you money on future income taxes, plus give you the ability to take advantage of tax-free growth for a longer period of time.

When you convert to a Roth, you do pay income taxes on the current value of your IRA. However, with today's lower values -- and relatively low income tax rates -- now could be the ideal time to do it. Your tax bill today may be less, and your future tax savings more.

There are income qualifications for opening a Roth. In 2008 and 2009, you must make under $100,000 a year to be eligible. That income limitation will be removed in 2010, and at that time you'll be able to spread your tax payments over two years. You could consider waiting, but who knows what market values and tax rates will be in 2010? If the benefits of a Roth IRA make sense for you, taking positive action now can turn your reduced retirement savings into greater tax savings.

Turn Lower Stock Values Into Bigger Gifts.

If you're hanging on to stocks that have lost value, your loss could be your family's gain. In 2009, you can give as much as $13,000 (or $26,000 for married couples electing to split gifts) to any number of individuals -- your kids, other family members, anyone you please -- without paying gift taxes. To make the most of this opportunity, consider giving appreciated stocks or mutual funds instead of cash. With values down, you can give more shares. Ideally, when the market turns around, those shares will be worth more, which will increase the value of your gift.

Gifting stock can be an excellent way to share the wealth during your lifetime. Under the current circumstances, it's also an effective way to put a positive spin on declining stock prices, especially if the recipient is in a lower tax bracket (the long-term capital gain rate is currently 0 percent for taxpayers in the 15 percent ordinary income tax bracket). One caveat: If your stock is worth less now than what you paid for it, it might be better to sell the stock and give the cash. This way you can realize the loss to offset any other capital gains.

Use Declining Home Values To Save On Gift and Estate Taxes.

While younger homeowners holding big mortgages find little positive in the recent decline in home values, older homeowners may see a silver lining. That's because now may be an excellent time to give their property to their kids and save significantly on gift and estate taxes. This doesn't force Mom and Dad out of their house. It merely gives them an opportunity to remove the home's value from their taxable estate through a qualified personal residence trust (QPRT).

A QPRT is an irrevocable trust that allows you to live in your home for a certain number of years before passing it on to your heirs.

How it works:

-- You choose the term of the trust -- 10 years, 15 years or any length you want -- and continue to live in the home and pay all expenses during that time.

-- Your home is moved out of your taxable estate.

-- At the end of the term, the property is transferred to the beneficiary(s) of the trust, for instance your kids.

-- If you wish to remain in the home at the end of the term, you can pay a fair rent.

Why it makes sense:

-- If you set up a QPRT now when prices are low, you'll lock in a low-gift tax rate. Because of how the IRS calculates the value of your home for a QPRT, your gift may very well fall within the $1 million lifetime gift exclusion, so chances are you won't pay any gift tax at all.

-- Your kids will benefit from future appreciation of your property, but won't pay any inheritance taxes on it.

There is one catch however. If you die before the end of the term of the trust, your home reverts back to your estate. So plan carefully, and choose a term that you feel confident you'll outlive. An estate tax attorney can help you decide if a QPRT makes sense for your situation and how best to set it up.

These positive moves may not be right for everyone, but they're certainly worth considering. At the very least, you'll be looking closely at your alternatives and deciding how to make the best of today's stormy financial climate. When the sun finally comes out, you'll be glad you did.