You Can Recession-Proof Your Life . . . Right Now

Signs of hard times are everywhere:

• The stock market is in turmoil.
• Subprime mortgages continue to wreak havoc on the real estate market.
• Personal bankruptcies and consumer debts are at all-time highs.
• More and more people are losing their jobs.
• Our country is at war, in deep debt, and with a currency that is losing value.

As if all of that wasn’t bad enough. The price of things we use every day keeps going up – food, gas, utilities – and credit. While interest rates are going down, it’s getting harder to borrow money, especially if your credit picture is at all hazy. And it’s not only the mortgage market that is in trouble.

Credit card issuers are also paying for having extended credit so widely and at such generous terms. Delinquent accounts (at least 90 days late) have increased by 50%. In response, lenders are tightening up their criteria and terms. Don’t be surprised if you see higher rates on your current cards, lower credit limits, shorter grace periods, and denied credit applications.

Where’s Your Umbrella?
I hope not, but with such stormy clouds, that rainy day could be here soon. If you thought you’d rely on your credit cards to help you get through tough times . . . think again. It wasn’t a good idea, anyway. The price you’d pay in interest and fees on cash advances would have you in hock for decades.

Instead, if you don’t already have an emergency fund that will cover three to six months of living expenses, start saving – big-time. If you save 10%, it would take you ten months to save just one month’s worth.

Fortunately, there are lots of painless ways to save once you put your mind to it. For example, it’s so easy to make your own coffee. Bring lunch, shop smart, and eat home. The savings can really mount up quickly. Here are some of my other all-time favorite penny pinching tips and techniques.

Pick a Pet Peeve
Another great way to save is by focusing on something that really bugs you. For example, do you hate paying property taxes? Invest some time in finding out how to cut them. How about insurance? Try to lower your homeowners and car insurance. It’s pretty easy with either one. And speaking of cars: If the price of gas makes you see red, click here.

Choose whatever expense annoys you the most.
Do a little research, and chances are good that you’ll find ways to cut your costs. It may be as easy as making a few phone calls to comparison shop. A couple of hundred here, a couple of hundred there . . . it adds up. And the less you have to spend, the more you can bank – and use to pay down your debts.

Pay Down that Pricey Plastic
The longer you wait, the more your credit card bills will cost you. At a time when your resources may be even more limited than they are now, the credit card company could up the rate and hit you with restrictive terms. The sooner you pay off your cards, the more you’ll save. Not having to pay bills later, when things may be even tighter, could be a real blessing.

There’s lots of great advice about getting out of debt on Credit.com. Of course, protecting your home should come first. Click here for advice on saving your home from foreclosure.

If the competing demands for your money are already making things tense and you barely make it from paycheck to paycheck, get some quality credit counseling now. There is no benefit to waiting.

If You’re an Investor
Hopefully, you don’t have money in the stock market that you might need during the next five to seven years. But if you do, it’s time to consider some less risky investments. I’m not encouraging you to sell in a down market – not at all. In fact, it’s a good time to buy. But if you have most of your money tied up in the market, I do encourage you to explore rebalancing and diversifying your portfolio.

If You’re A Homeowner Who Can Be Trusted
This is a good time to consider refinancing. Do it  . . . now . . . while the rates are low and you still have a job. Click here for some tips. If you’re wondering whether you’ve built up enough home equity to make refinancing worth the bother, you have nothing to lose by taking a look at the numbers. Visit RealEstateABC or Zillow to get a sense of what your house is worth. True, it may not be as valuable today as it was last year, but especially if you’ve been living in it for more than a few years, its value has likely gone up. If you’ve been there for a decade, Consumer Reports estimates that it’s worth between 54% and 104% more than you paid for it -- depending upon where you live. 

Use the money you save to pay down credit card debt, add to your emergency fund, and contribute to your retirement or college accounts.

Do you have a 15-year mortgage? Get yourself some more breathing room when you refinance. Go for a 30-year mortgage. Once you get the refinance, continue to send in as much as you’ve been sending in all along. You’ll save even more and be out of debt in the same time frame. And if times get tough, you can cut back to the 30-year loan’s smaller payment without risking your home.

Have you built up some home equity? Get a home equity line of credit if you’re certain that you can trust yourself not to use it for anything other than a serious emergency. It will be much harder or impossible to get one if you lose your job. But it sure might come in handy if you have to cope with a particularly long stretch of unemployment.

Is Your Job in Peril?
Especially if you might lose your job, now is the time to do more than cut back on your spending. Focus on what you can do to earn more money, either where you work now or elsewhere, and check out the “goof-proof” tips I offer below on finding your next great job.

In the meantime, you can get a part-time job, sell your comic book collection online or at a flea market, or start a small business of your own. If overtime is available, put in as much as you can. Bank all your extra income as well as your tax refund and you’ll have an emergency fund in no time.

Although you’ve probably heard that small businesses tend to fail, a business of your own can be an excellent cushion, bringing in extra income and tax breaks.  If you start small and limit your risks, who knows? Maybe your home business will become your only business! Click here for some tips to get yours going.

Build Job Security Where You’re Currently Working

Focus on increasing profits and cutting costs. Your contributions to the bottom line may help you keep your job. Did you just hear about a hot new marketing opportunity? Look into it, and share your findings with the decision-makers. Do you have some thoughts about how your company can use it to increase sales of the widget no one seems to want? Ditto.

Do you know how to save money on the phone bills – or can you suggest better ways to handle complaints? Do the research, and put solutions to problems on paper. In short, show your boss that you’re “on the case” where it counts.
           
Be a team player, and think outside the box.

• Pitch in when things get really hectic.
• Learn to do what no one else can or will.
• Offer to give talks to community groups or to write speeches for your boss. Volunteer to get some publicity for the firm.
• Fine-tune your problem-solving skills. They’re always in demand, so spend some time analyzing what’s wrong where you work and developing realistic solutions.

Get known. Introduce yourself to the decision makers. Let them know what you can, will, and are currently doing for the business. You don’t have to be pushy or even outgoing. The better you are at demonstrating the benefits you offer your employer, the better your chances are of keeping your job.

Get smart. The further behind you are in whatever technology your industry uses, the less desirable you’ll be at your current job -- or when you apply for a new one. Be sure you benefit from whatever in-house training is available.

If there’s some special training that would benefit both you and the boss, but no program in place, you’d be smart to find a way to make it happen. Maybe you could get the green light to find someone who could run a workshop on the subject for your department. Or maybe you can do the research on your own.

Whenever possible, attend seminars, conferences, and company-sponsored workshops. Spend as much time as you can picking the brains of colleagues, managers, suppliers, and customers – with an eye towards increasing the bottom line, improving customer service, and increasing productivity.

If your firm still pays for continuing education, take full advantage. Not doing so is throwing money away. Is there a special license or certification that could buy you a more secure future? If the boss will pick up the tab, you’ll be that much further ahead – for free. But even when the boss won’t pay, if there’s a special degree that would help you advance yourself and the boss, it may pay to spring for it. You’ll take it with you wherever you go.

Keep a “Gold Star Scrapbook” focused on your accomplishments, and don’t be shy about sharing it. Every time you learn a new skill, finish a project, crunch some numbers that indicate your high level of productivity, attend a conference, get press coverage, take a class, give a speech, or complete any other significant task at work, make a note of it. And throw in letters complimenting your performance, as well as samples of your business proposals, clips, and well-written memos. Keep it handy so you can refer to specific items during the course of business. It can’t hurt!

What about your next job? It’d be great if you could motivate yourself to get going on the job hunt before you lose your job or have to face the prospect of a cut in pay or benefits. Hopefully, the tips I share below will motivate you to get going in a few different directions.

If you’ve already received a pink slip, you probably feel a great sense of urgency. Your confidence may be shaken because you were laid off. Remember: While losing your job may not have been your fault, finding your next great one is your responsibility. Congratulations! Finding a job is your new job.

Nine Goof-Proof Ways to Find Your Next Job

1. Start with the obvious. Update your résumé, check the classifieds, practice interview techniques, and network with friends, relations, and acquaintances, as well as trustworthy customers, competitors, and suppliers. Think about jobs you’d enjoy that take advantage of your skills and “fit” your personality. Even if you have no clue about what you might like to do, you can decide that you’re going to find out -- and that you will take steps to move in that direction, over time.

2. Take a trip through cyberspace. Visit a couple of mega sites, like careerbuilder.com and Monster. You'll find free on-line job search engines as well as sound career advice. Also spend some time on Craigslist looking at all of the full-time and part-time jobs that are available near where you live. While you’re at it, see what’s being offered in places where you might want to live. I always check out Hawaii.

Nose around to find job boards geared to your interests and skills. For example, go to Google and type in something like "electrical engineering" jobs or "human resources" jobs. Tool around and see what you can find.

3. Get some career counseling. Your alma mater may make all sorts of services available to you, either in person or online. I just found out that I can join a listserve (an electronic mailing list) at my college, where I’ll receive free job postings as well as advice on careers via email. I think I’ll sign up today! If I’m willing to pay, I can get a counseling package for $125, which includes three months’ worth of access to the career center.

A nearby community college is another good place to turn for career counseling. Or ask for leads at the local high school guidance department.

When you meet with a job counselor, ask about taking an aptitude test. While you’re exploring your options, you might as well find out what you really want to be doing. For a referral to professional job counselors, visit the National Board for Certified Counselors. If you’d rather do it yourself, check out -- CareerPath.com, which has self-assessment tools and career guidance resources. 

4. Consider a coach. You can hire a career coach to work with you. Typically, your meetings will take place by phone and on-line over several months or more. While traditional job counselors focus on finding you a job, coaches generally focus on helping you create the WHOLE life you want.

To find a career coach, visit The Coaches Training Institute or the International Coach Federation. Most reputable coaches offer a free introductory session where you can check out the chemistry. Try three or four coaches on for size before you spring for the bucks.

5. Take some inexpensive adult education classes. You can explore new fields that seem interesting or pick up skills and credentials that can open up new doors. For example, you can learn how to write effective marketing copy, master Excel or html programming, develop a business plan, start a day care center, become a travel agent, or get a real estate license.

Are you good with languages? Consider learning another one. The economy is only going to get more global. The more fluent you are, the more choices you’ll have.

Do more than just take a class! Most adult education teachers are pros who actually do what they teach. Corner your instructor and ask for some leads as well as real-world career advice.

6. Talk to people who work in professions you find appealing, including folks who work for the relevant trade associations. They have a unique overview and can offer key insights about job opportunities and industry trends. People want to be helpful. Catch them at a slow time or make a date.

7. Pay a visit to a headhunter or two. Ask around to get some recommendations. Maybe a head hunter can help you find another job or at least give you an objective take on the job market. Just hearing what's available may give you some good ideas or remind you of some important connections.

8. Volunteer after hours or on weekends. By being with people who actually do the work you're considering, you'll get a good sense of the pros and cons of the job – and more. For example, maybe you’re thinking of going back to school to become a nurse, but you’re not sure you’d really like the work. Volunteer at the local hospital in a position that will allow you to interact with nurses and find out what the job really entails.

You’ll also be in the perfect spot to talk to nurses about what they like and don’t like about their jobs. If you do decide to go back to school, you’ll have a helpful credential to add to your résumé. And if you don’t like it, you can always quit.

“Temping” and moonlighting are two other risk-free ways to test the waters of a new field or business. Like volunteer work, temp or part-time jobs allow you to be around people who actually do the work you’re considering. You’ll get a good sense of the pros and cons of the job -- and more.

9. Become a consultant. If you've built up some expertise in your field, put together a proposal explaining the benefits that clients – including your present boss and other contacts you developed on your job – would gain by working with you on a consulting basis.

Call everyone you know who could be a potential source of business and tell them of your plans. Ask them if there's anything you can do for them -- or better yet, suggest projects you might be able to do that will help them make money. You'll be off to a running start.

Good luck! Please let us know how you make out with your new job.

Nancy Castleman is co-author of "Invest in Yourself: Six Secrets to a Rich Life" and founder of Good Advice Press. Nancy has spent the last 23 years teaching people how to get out of debt, save money, and live better on less. She writes about all of these subjects for CreditBloggers.com and Credit.com.