Unless you're someone who remembers the Great Depression, chances are 2008 will go down in the record books as one of your worst years -- at least as far as your finances are concerned. So what does that make 2009? Time to regroup, to make smart choices, to control the things you can control, and to put yourself back in the driver's seat as far as your savings, investments, job and home are concerned.
Here's how:
-- Stick with the austerity budget. Layoffs were huge in November and again in December, and the unemployment rate was recently announced at 7.2 percent. Even if you still have a job -- or were lucky enough to find a new one -- everyone's in danger of being forced to cut back. If you only have a three-month emergency cushion, try to boost it to six. "There is some interesting research about having an emergency savings account, and what that does for you from a mental health point of view. It makes you feel much more comfortable and allows you to deal with emergencies -- if your hours are cut down or you lose your job," says Ted Beck, president and CEO of the National Endowment for Financial Education. Where can the money come from? Use the web to get the most you can from coupons. If you started a carpool to save money when the price of gas was $4 a gallon, don't give it up now that it's down. And have cash automatically transferred from checking to savings each pay period, !
before you have a chance to spend it.
-- Keep an eye on interest rates, particularly that of your mortgage: With one in 10 American mortgage-holders at least one month behind on payments, the Treasury Department has worked to push rates down to 5.5 percent. If your rate is sitting at 6 percent or higher and your credit is good, you may want to refinance. "It may or may not make sense depending on when you bought your home, but if you have good credit and equity, lenders are willing to provide you with options. It doesn't hurt to call," explains Rita Cheng, a financial advisor in Bethesda, Md.