As the economy continues to tank and prices continue to rise, Mr. and Mrs. Middle Class are starting to panic. After all, we can only juggle the bills for so long before everything comes crashing down and having to squeak by as we live from paycheck to paycheck will most certainly begin to wear us down, sooner or later.

But what can you do?

I mean, even if the powers that be aren’t willing to acknowledge the recession that isn’t, you and I know differently. And while we’re not the only ones feeling the pinch, the truth is that creditors seem to have little empathy for our situation and could care less if we can only afford popcorn for dinner, as long as they get their payments.

So again, what can you do?

While you certainly can’t stop the recession, there are some things you can do to stop your personal spiral and take back some control.

Get Real
This is probably the hardest thing to do because we as humans tend to either over-exaggerate (the sky is falling!) or we tend to just bury our heads in the sand and pretend the problems don’t exist.

So the first thing you need to do is get real. What are your debts and what kind of income can you count on each month? Put things into perspective and prioritize your most important expenses. Ideally, you’d like to be able to pay everything on your plate but if it comes down to it, you’ll need to be ready to let some things go in order to take care of necessities such as mortgage payments, electric bills and groceries.

Am I actually telling you to stop paying your credit cards? Well, that all depends on where you are financially. But being realistic means that you’re willing to face the concept of having $1000 in your hand and $2000 worth of bills to pay. At that point, something is going to have to go and its pretty obvious which bills are more important.

This may not be a fun exercise but having a realistic view of where you stand and where you’re headed is the first step toward taking some action.

Relax
Now that you’ve had a dose of reality, calm down. Stress can make you sick and it certainly isn’t conducive to brainstorming and creative thinking. Plus, being stressed isn’t going to pay those bills so you might as well let that worry go.

I know, easier said than done right? But look at it this way - you’re not the only one dealing with money problems right now. You’re certainly not the first one to miss a payment, bounce a check or get laid off without warning. And realistically, what’s the worst that can happen?

Being able to come to terms with your worst-case scenario makes it much easier to set aside your worry and start focusing on finding solutions. For example, years ago my husband was in a small boating accident that damgaged his hand. At the time, he tinted car windows for a living and after returning home from the hospital, his boss (also a “friend”) stopped by to see how he was doing. Of course, the minute he saw the huge cast on my husband’s hand, he knew that there was no way he’d be tinting windows any time soon. So he fired him. And because his boss was also our landlord, he then gave us a three-day eviction notice because without a job, he knew we couldn’t pay the rent.

Nice guy right?

The point of this story is that we were slammed with no warning and truthfully, isn’t that how we meet change most of the time? You never know when your car will break down nor can you predict when a particular lifestyle or income level will come to an abrupt end. The trick is to prepare for these surprises as best you can and find a way to make peace with the possibilities.

After all, your bill collectors can’t put you in jail and they can’t take away your health or your family. Some states allow garnishing of wages, others do not. Knowing what you potentially face allows you to see it coming instead of being blindsighted later. As one of my wonderful friends use to say - “they can’t take away your birthday”. And that’s true. You’ve still got your health, your passion and your smarts plus family, friends and so many other important things. Fear only works when its vague and mysterious. Name it, face it and the fear begins to dissolve.

You don’t have to like your worst-case scenario, but once you realize that its not the end of the world, you can stop stressing and start planning.

Take Action
One of the best ways to get a grip when things are going badly is to take some positive action. The beauty of this exercise is that “action” can be defined in an endless number of ways.

Buckle Down
Just clipping coupons for grocery shopping or taking an extra few minutes to evaluate your purchases can give you a sense of control over your finances. Part of our society’s problem is that we are a very consumer-oriented generation. We like to spend, we like to buy nice things and we have this ridiculous idea that “stuff” means status. But tell me really - does spending $50 more on a pair of jeans because they’re a designer label make you better, smarter or more important than the guy who bought the off-label jeans and only spent $20 bucks? No, it doesn’t and in fact it suggests just the opposite. There’s nothing wrong with being frugal nor is there anything wrong with saying “I can’t afford that right now”. We’d all like to have big houses, fancy cars and a multi-million dollar income that allows us to spend as we please but we don’t and that’s okay. Life isn’t over and we haven’t failed. We just have to learn to make the best of our personal financial situation and that means spending wisely.

Open Your Mind
A few paragraphs up I told you about leaving my corporate 9-to-5 in order to go bartend full-time. On paper, that was probably the dumbest move I had ever made. After all, my corporate job had benefits. It was stable and it offered a sense of security that bartending didn’t.

But it also meant I couldn’t spend as much time with my family. It meant that I had to drive in rush-hour traffic and work long hours and deal with the neverending pile of you-know-what that inevitably always runs downhill.

Bartending on the other hand, was nothing if not fun. There was no rush hour traffic and there was no corporate red tape. Socializing and chit-chatting were highly encouraged and in fact, would greatly improve my tips. It wasn’t something I would want to do forever but it has to be one of the best jobs I ever had and I wouldn’t have made that little discovery if I hadn’t have been open to change.

When I decided to bartend part-time, it was because I had a financial need and taking that job was effectively me taking control of my situation. It was empowering - I was doing something constructive instead of just moaning about my situation.

And not only did the bartending job get us through our financial crisis, but it also opened a door for me that might not have been opened otherwise. Change is everywhere and there’s simply no escaping it, no matter how hard you try. Embrace it and you’ll often find that change is actually your friend, even if you don’t realize it at the time.

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This entry was posted on Tuesday, September 9th, 2008 at 10:02 am and is filed under Awareness, Challenge Yourself, Change Your Life, Life As We Know It, Money, Money, Money. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.