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Home › Articles › Financial Fitness › Surviving the Slow Economy

Surviving the Slow Economy

Tips for Navigating Turbulent Financial Times

By Teri Brown

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The prevailing economic downturn has been hard on Americans. The high jobless rate, lowered earnings and corporate downsizing have all taken their toll on the average family's income. While experts are busy debating the recovery or lack of, most households are just trying to survive.

Ellen Ferlazzo, mother of two from Pleasanton, Calif., is experiencing the economy's effects firsthand. As a self-employed single mother in the hig- tech field, Ferlazzo has watched her income plummet in the past year. She has received fewer and fewer contracts, and the contracts shedid obtain paid less and less.

"I find smaller jobs, but have not yet landed a major contract like I used to be able to find," Ferlazzo says. "Hourly rates are down by 60 percent, so I'm doing less work and getting less money." Ferlazzo's ex-husband was also hit by the high-tech downturn, leaving her family in a fairly stressful situation, but she has managed to adapt.

Develop a Plan
Rudy Cavazos, director of corporate and media relations for Money Management International (MMI), a nonprofit community service organization offering confidential financial guidance, free consumer credit counseling services and debt management assistance, believes that families need to work together in order to remain solvent during times of financial difficulty. "It's a family affair," Cavazos says. "Communicate openly with your family. Ask them to assist you in reviewing where the money goes and determining what areas can be trimmed. This keeps everyone involved and provides support during times of crisis."

Cavazos suggests that you stop spending money on anything but the bare necessities, and you may want to consider selling assets to keep afloat. "Assess your situation and set up a survival budget," he says. "First, determine the amount of take-home income you can realistically count on. Then take into account your set monthly payments such as housing, vehicles and insurance, and then consider your current variable expenses such as costs for food, utilities and gasoline." When setting up your budget, don't forget to consider periodic expenses such as auto registration, insurance or school tuition.

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