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The www.FedPrimeRate.com Personal Finance Blog and Magazine

Sunday, January 18, 2009

Ease Your Mind By Taking Control Of Your Finances

Ease Your Mind By Taking Control Of Your FinancesIf you are feeling like you don't have any control over your finances you are not alone. Whenever there is an economic downturn like we have recently experienced it is normal to feel a sense of panic regarding your finances. Admittedly there are many things you may not have control over when it comes to your money, however there are some areas where you can and should take charge of your finances to have some peace of mind during these troubling times.

  • Do you know where your investments are? Many people allow their retirement accounts or other investments to go on auto pilot during good times. There is no better time than the present to dig deep and get a better understanding of your portfolio.

  • Don't panic if your home has lost value. Unless you are in the market to move or sell right now, you shouldn't worry needlessly about your home losing value. The housing market goes up and down and having your house lose value is simply part of home ownership. However if you are struggling to make your mortgage payment due to having “too much” house you should consider looking for help now before you get too far behind to help yourself.

  • Secure your job. This tip may be easier said than done in the current employment market. With many people losing their jobs and companies downsizing everyday it is clear that you may not be able to do anything to prevent job loss. That being said, you should make every effort possible to do the best job you can do. Now is not the time to be slacking at work. Get there on time, try to limit time off and be as efficient as possible while you are there in an attempt to secure your job.

  • Pay down debt and reduce expenses. This common sense advice should be followed regardless of the economy but is especially important in a recession. While you may have no control over the state of the global economy, you do retain control of your individual spending. By cutting costs and paying down debt you put yourself in a better financial position for the future.

  • Put major purchases on hold. If possible put off any major purchases that will further strap your budget. Now is not the time to incur more debt or tie up your existing disposable income for additional payments.

  • Protect your credit. Credit is a precious commodity as lenders try to reduce their risk in the current economy. Protect your existing credit by always making at least your minimum payment, on time, every time. If you skip a payment or pay late, creditors may see you as a risk and respond by applying higher interest rates or reducing your available credit, both of which hurt your financial position and credit score.

By taking control of what you actually have control over, you can reduce your stress level and feel confident in your money management plan. However if you find you are losing control or are unable to follow the steps outlined it may be time to ask for help. There are many options available for debt relief if you find yourself in a position where you no longer have control over your finances. Your problems won't solve themselves, be pro-active and face your situation for a better financial future.

Trisha Wagner is a freelance writer for DestroyDebt.com, a debt community featuring debt forums. Trisha writes regularly on the topics of getting out of debt and personal finance.

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