The widespread (Global) economic meltdown is affecting every household in America and beyond. People who have been conscientious about saving and living within their means are facing personal financial uncertainty as a result of the economic title wave that began on Wall Street. Here are some survival tips:

ü Spend time reviewing priorities.

ü Develop a survival budget.

ü Guard against auto-pilot financial behaviors.

ü Focus on positive, non-monetary, relationships and activities.

“No” Means “No!”

Indentifying Predatory Tactics

For the last 5 years I have used the term predatory to describe many financial relationships that have been normalized in our culture. The word predator conjures clear images for most people. Predators take what they need to get stronger and do not worry about the residual damage to the other party. There is one test that helps identify predators: once you have said no they persist.

Cash is increasingly important in personal financial sustainability. As credit continues to tighten and liquidity (the ability to sell real and personal property) is constricted American households will continue to feel financial constraints. In these times personal financial empowerment comes from having a thoughtful cash flow plan that provides for necessities and preserves resources.

Reduce the influence of predators in your financial life by saying ‘no’ when asked to purchase, lend, or invest anything you have not identified in your personal financial plan. Remember No means No.

Plan Now For Holidays

Now is the time to plan for the holidays. The weak dollar, plummeting market investments, and low interest rates all point to reframing auto-pilot financial behaviors. Make a list of the most important attributes of a joyful holiday season and create a spending plan that reflects priorities. A good plan done early provides opportunity to stay within a budget and pay as you go the extra expenses. The challenge is to get through the holidays without going into debt.

Unmanageable Debt

Managing debt is problematic in todays economy. Car payments, mortgages, credit cards, student loans, and other consumer debts are challenging even in high income households. Here are some tips for dealing with an uncomfortable or unmanageable amount of debt:

Do a basic cash flow plan and identify whether or not all debt can be fit in a well managed plan.
If household cash flow can not sustain all payments prioritize the debt. Mortgages on primary residence and student loans are generally top priority.
Avoid borrowing from one source to pay another unless it is certain that the problem will be resolved within a very short time.
Contact the lenders you are unable to pay regularly. I recommend doing all contact in writing so there exists a paper trail of communication. If reducing payments will provide adequate relief, request possible alternative payment options.
Request that the lender cease and desist all phone contact and communicate only in writing. This will reduce the stress of collection calls and provide thoughtful response time.
File all written communications with each creditor in a folder and open the correspondence at scheduled times.
Be consistent making payments on debt that can be paid according to contract terms or renegotiated.

Remember that your credit score is not your life score.

2008 Year End Tax Planning

Fall is in the air and it’s time to review your 2008 tax strategy. Don’t wait until it’s too late to adjust retirement contributions, charitable giving options, college savings, available credits and income deferral options. And, if you are planning to sell stock talking to your tax advisor first is a good idea.