Financial Tips for Trying Times

Financial Tips for Trying Times
by: ARA Content


IHateFinancialPlanning.com offers advice on managing your money

(ARA) - When life gets unpredictable, there's one thing Americans always
want to hang onto: their money.

During times of national uncertainty, it's only natural to want to hunker
down and hang on to your cash -- or at a minimum, squeeze as much as
possible out of every paycheck (that is, if you're still getting one).

Many Americans are feeling less secure about their lives than ever. In
fact, 63 percent feel they will have to make changes in their day-to-day
lifestyle, according to a survey by Wirthlin Worldwide, a McLean,
Va.-based research firm. Fears of the unknown, job loss or having less
income are also on people's minds.

"If you hated financial planning to begin with, the thought of managing
your money in trying times can be even more intimidating," says Randy
Schuldt, vice president with IHateFinancialPlanning.com, a Web site for
the three out of four Americans who hate financial planning. "Although it
may seem impossible to predict what the future will bring, there are some
simple steps you can take to give you more control of your money in a
changing world."

To give you and your family something to hang onto during uncertain or
changing times, IHateFinancialPlanning.com offers the following tips:

Put it in perspective. If history is any indication, the economy may not
suffer long-term ill effects from recent events. The Dow Jones industrial
average -- the oldest U.S. market benchmark -- typically falls for a
short time, but it has traditionally rebounded within six months. It
happened after Pearl Harbor, the Gulf War, the World Trade Center bombing
in 1993 and the Oklahoma City bombing in 1995. Past performance doesn't
guarantee future results, but there's a possibility that history may
repeat itself. Fearful reactions will only make the short-term last
longer.

Reduce your deficit. The nation's economic outlook is nothing you can
control, but you do have control over your own situation. If you've got
credit card debt, take steps to pay it down. Start with the cards with
the highest interest rate and pay more than the minimum on all your cards
with balances. Instead of using a credit card for future purchases, get a
debit card, which subtracts purchases directly from a bank account.

Protect future income. You owe it to yourself and family to protect your
earning power with disability income insurance and/or life insurance. The
lack of disability income insurance is the single biggest threat to the
financial well-being of the American workforce, according to the Consumer
Federation of America. It reports that 80 percent of U.S. workers either
have no long-term disability income coverage or their coverage is
inadequate.

Resist the urge to borrow from your 401(k). Many people are tempted to
borrow from their 401(k) as a first resort, but it should be the last
resort. Many people think because it's 'borrowing from themselves' that
no harm is done, but actually, they lose the chance to benefit from the
tax deferral and compound interest on potential growth of their 401(k).
That means your account will be much smaller when you retire. Also, if
you quit your job or are fired, you may be required to pay back the
entire loan immediately. If you are unable to do so, be prepared to pay
income taxes and a 10 percent early withdrawal penalty on the loan.

Balance your budget. Now is a good time to get in the habit of budgeting
your money. Track your expenses and spending for a month or so. It could
reveal some money habits that need changing. And it can help you shape
future habits, such as saving, charitable giving or just paying your
bills on time.

Save for emergencies. Many people put off saving for a rainy day. It may
not be raining on the economy yet, but the storms are brewing. A good
rule of thumb is to have at least three months' salary in the bank where
you can access it for emergencies ranging from a leaky roof to layoffs at
work.

Have a plan in case of layoff. During these tough times, more and more
companies are cutting jobs, and yours could be next. If you haven't done
so already, update your resume. Be sure you understand what you'll need
to do to maintain health insurance coverage after a layoff. You might
want to apply for a home equity line of credit. You don't have to use it,
but it's hard to get approved after you've become unemployed.

Write a will. It was a good idea before the world changed, and it's a
good idea now. As long as you're thinking about your family's financial
future, this is also a good time to formally declare your wishes about
who gets what, and how much, after you've passed away. It's also the only
way you'll be sure your wishes are carried out. You can modify your will
as often as you like, for as long as you live. You may also need a
durable power of attorney (POA), which formalizes who will make decisions
on your behalf, if you are unable to do so.

Invest in the future. Resist the urge to put future plans on hold. If you
want to buy a small business, adopt a child or retire early, put those
goals on paper and follow through with a savings plan. It's easier to
stay on track if you have something to shoot for. Regardless of the
condition of the world, keep improving the condition of your personal
finances. An investment in your future is also an investment in America's
future.

Courtesy of ARA Content, www.ARAcontent.com, e-mail: info@ARAcontent.com

EDITOR'S NOTE: For More Information, contact Maclaren Latta, Carmichael
Lynch Spong, (612) 375-8570, mlatta@clynch.com or Stephen Dupont,
Carmichael Lynch Spong, (612) 375-8525, sdupont@clynch.com.

About IHateFinancialPlanning.com IHateFinancialPlanning.com is a Web site
that's already helped more than one million people who hate financial
planning make sense of their personal finances through fun, friendly,
easy-to-understand content and financial planning tools. The Web site was
developed by ReliaStar Financial Corp., a member of the ING Group.

About ING Group ING Group is a global financial institution active in the
fields of insurance, banking and asset management, with more than 100,000
employees in 65 countries. ING provides a full range of integrated
financial services for its clients through a variety of distribution
channels. In the United States, ING's product and service portfolio
includes banking, fixed and variable annuities, investment management,
life insurance, mutual funds, personal finance education seminars, and
trust services. For employers, ING businesses also offer a full range of
retirement and other worksite benefits, including group insurance
products. For more information, visit www.ing-usa.com.

Securities available through PrimeVest Financial Services, Inc., Member
NASD/SIPC. Carmichael Lynch Spong is not affiliated with PrimeVest
Financial Services, INC. and is not a member of the ING Group.

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About The Author

Courtesy ARA Content, http://www.ARAcontent.com;
e-mail: info@ARAcontent.com