There is no reason to panic. Even though so many news medias are screaming “fire” in the crowded theater, things ARE going to be okay. The thing that you need to do is take a deep breath, turn off the television and get back to the basics of your own budget.
1. Write down your spending – EVERY DAY! It is so easy to lose a receipt or forget about a purchase. Writing it down every evening not only keeps your records straight but keeps you aware of the choices that you are making.
2. Continue to pay off your debts. It’s easy to start wondering if maybe all the debts will be wiped cleaned in some shape or form (I keep remembering the Y2K scare) but don’t count on it. Pay off your debts aggressively.
3. Save, save, save. Even if you aren’t ready to jump into the market you do still need to be saving money that you can access if you decide to invest or if you need it for emergencies. Stick to federally insured accounts.
4. Leave long term investments alone. If you did your research before investing then you were informed that the market loses money in the short term. In the long term (even going back to the Depression) the market has always made a profit.
5. Cut out extra spending. If you are really concerned about your financial future then put a “moratorium” on all spending for the short term. Continue to set that money aside for savings and when you begin to breathe a little easier about the economy you will have a nice little nest egg built up (that doesn’t have government retirement restrictions).
Yes things are crazy. Things are ALWAYS crazy. The key to surviving the chaos is to not watch the chaos. It is important to be informed, but too much of anything is a bad thing. Stick to your budget and regulate your spending and you will come through this crisis better than you went in.