During these tough economic times many of are us are paying more and more attention to financial news and financial advise from experts. Yet, we often still feel lost. Why? Often we’re getting mixed messages. Mixed may be putting it lightly. Sometimes the advice is down right conflicting.Here’s an example:The Wall Street Journal ran a story one day titled “Leverage, Baby!” that encouraged more and not less debt.The next day U.S. News & World Report ran “How to Plan for a Double-Dip Recession” and the advice? Pay off debts as quickly as you can. On one side we’re being encouraged to spend more to avoid a further recession and on the other side we’re told to buckle down and lessen debt to prepare for an even worse recession to come. What’s a consumer to do?Let’s look at each position and argument more closely to see to whom and when each applies.The advice in the Wall Street Journal article “Leverage, Baby!” is targeted to “sophisticated, disciplined investors who have lived and invested within their means.” Christopher Jones, a New York financial planner with high-net-worth clients says,” “Most important, there’s nothing inherently wrong with leverage, or borrowed money.”This advice applies to people who understand and have the capacity to take on debt and can tolerate the risk. For these people “Now is an ideal time to leverage cheap dollars to buy into areas that can produce much higher returns over the longer term,” Jones says. Especially with mortgages at 4.9% this may be the time to buy or refinance.The news from the US & World Report about another recession is likely not a “the sky is falling” cry. Although some analysts, like Moody’s Economy.com say there’s just a 23% chance that we’ll be in a recession six months from now, others don’t agree. There are several signs that illustrate the likelihood that we could have a double dip recession.
We’re likely to see a negative impact here from the debt problems of Europe in countries like Greece, Spain and Italy.
Increasing federal debt seems to be making investors wary.
The housing crisis hasn’t seen the light at the end of the tunnel.
Government stimulus package spending is slowly trickling to an end.So for those of us who don’t fall under the disciplined investors with room for risk category, what can we do to make ourselves more recession proof?Turn “savings” into real “savings.” What does this mean? Often we say we “saved” dollars by using a buy one get one free coupon at a restaurant or we’re told that we “saved” dollars when we use coupons at the grocery store. To turn savings into real savings we have to actually put it into savings, no matter how small the amount. Otherwise our savings really just means delayed spending money that is spent somewhere else.Practice patience. A low interest rate still isn’t a deal if you can’t make the payments months from now. Put off making new purchases like furniture or vehicles if things are already tight and the future is so unpredictable.Keep liquid money. Staying liquid means keeping some money easily accessible if times do become bad. Don’t have everything tied up in stocks, bonds, investments, or mutual funds where it could be at risk or would take too long to access if needed during a further recession.One up your education. Now may be the time to get a degree, certification or licensure to be ahead of the games when companies do start hiring again.Start a side job. If you are always needing a little more money, consider starting something on the side. Whether it’s summer lawn car, selling on eBay, offering summer child care or tutoring or finally taking some of your handmade hobbies to a community show, a side job may help you make ends meet and be a saving grace if things get worse.Consider these 5 tips to keep yourself protected from a further recession. Applied all together, they may just help you keep a handle on “what’s in your wallet”.