Money Advice

It’s bad out there, no question. The headlines scream at us, "The worst failure… Not since the Depression… Never before in our history..." Of course, you’re feeling upset. These are horrible things to hear.

So how can we survive this economic crisis and catastrophic predictions of the future? Turn inward. In tough times, look back, look around and look inside. As a licensed marriage and family therapist and a former journalist who spent more than two decades covering people and crises, I have some suggestions for getting through the current meltdown.

Fear. It’s the four-letter word that infiltrates our families, our job market and even our economy. And while few of us enjoy fear, it is actually a very powerful and beneficial emotion. Why? Fear shows us that we need protection and it outlines a coming threat—be it real or imagined. The challenge with fear is knowing when it is necessary to command our attention and what to do when we feel it. Today, the most common fear felt by most married couples probably has something to do with money.

Many parents and families are now facing the consequences of overspending; not just on necessary household items or fun luxuries, but monthly bills.

For a young married couple looking to branch out during this credit crunch, some things couples take for granted during prosperous times may seem harder to attain—including the purchase of a home. These days, many couples are considering putting this dream on hold until the housing market becomes less volatile. The truth is, though, that interest rates are at near historic lows and home prices are dropping, and now is an ideal time to seriously consider purchasing a first home.

Owning your home can be a critical step toward building a sound financial structure for your new life together. Why keep paying rent when you can—hopefully—build equity? There are also important tax advantages linked with buying a home, including the ability to write off mortgage interest and property tax expenses. Plus, there’s now the incentive of the First Time Homebuyers Credit from the federal government.

Uncertain economic times are impacting everyone in a thousand different ways. In order to cut expenses, many couples are foregoing more exotic destinations, such as a two-week trip to the South Pacific, opting instead to plan trips closer to home. "Discovering America" can help save on a variety of expenses, like the cost of getting a passport among many other things, as well as help boost local economies at the same time. However, when planning that next vacation, couples can save a bit extra by avoiding the often unnecessary cost of rental car insurance, which can be as much as the rental itself.

Many times, purchasing full rental insurance is unnecessary. A rental vehicle used on your vacation qualifies as a ‘non-owned automobile’ under most personal auto policies that have comprehensive and collision coverage

"Batten down the hatches—quick, men."

The origin of this phrase came from crewman on ships at sea to prepare for bad weather. I do believe this is appropriate for the environment we are in today.

I am sure if you are reading this you know someone, or even maybe you yourself, are out of work. So how does financial advice apply to those who are in the red zone of a financial crisis? What a great question. I believe it is never too late to learn even if the application may be different in scope.

With the year 2008 now a fading memory, it’s time we reflect on the lessons taught and how they may guide us in 2009. There’s no denying, for many American families, that last year qualified as "interesting," keeping with an ancient Chinese curse: May you live in interesting times. Record numbers of investment disasters, bank failures, home foreclosures and personal bankruptcies cannot soon be forgotten. These must, however, reflect more than simply a bad aftertaste. Better they provide guidelines to insure we not make the same mistakes a second time. There are three important lessons to be etched into our consciousness.

1. Everything is subject to change. Several years ago, as the nation’s stock of homes increased in value monthly, who among us predicted housing prices would be setting new lows?