While economists and politicians study, debate and finally implement nifty new programs to fix the economy, ordinary Americans are stuck trying to find ways to cope with the worst recession since the 1930s. Those who have lost their jobs, their savings or their homes — or who simply need to find ways to protect themselves from what may come next don’t have the luxury of waiting for government action to reach their wallets. Here are ways to solve five of the biggest financial problems plaguing the American consumer — without waiting for Uncle Sam to lend a hand.

5 common money problems
  1. Unemployment
  2. Overspending
  3. Debt
  4. Foreclosure
  5. Wrecked retirement account

Unemployment

Even with billions in stimulus money being dished out, the economy continues to shed jobs at an alarming rate. So if you’re unemployed or underemployed, finding a new job means getting in line with potentially hundreds of other job hunters for the same openings. Unless, of course, you find a way to cut the line.

“You need to figure out what it is that you want to do and are most qualified to do, then identify employers and companies where there appears to be some level of growth or opportunity and identify ways to network your way into the company,” says Nancy Collamer, creator of Layoffsurvivalguide.com. “If you wait until the job is posted, you’re going to be out of luck.”

So once you’ve identified the companies that might be a good fit for you, how do you get your foot in the door?

Collamer recommends networking sites, such as LinkedIn, as a good place to start forging connections with your target employers. Temping for a company is another way to get in the door ahead of the job-hunting crowd, says Collamer. Think of it as an extended job interview.

“They get to meet you, learn about you and see what you’re all about. And if there is an opening in the company and if they’re pleased with the work, the easiest thing for them to do is to first turn to the temp,” says Collamer. “People and companies usually follow the path of least resistance, so if you’ve got someone in front of you who’s doing a great job, that’s going to be the first person you’re going to turn to.”

Lastly, don’t be afraid to spread the word that you’re looking for work to friends, old colleagues and relatives. Just make sure you’re specific about what you’re looking for, says Collamer. “The more specific you can be, the easier you make it for somebody to offer help,” she says.

Overspending

Reining in spending is critical in a punishing recession like this one, especially for those who’ve suffered a loss of income. The most important step you can take to get spending under control is writing down and living by a budget, says Dave Ramsey, author of “Total Money Makeover” and host of the eponymous syndicated radio show.

“If we can get couples to sit down and spend every dollar of their income for this month on paper and agree not to spend any money that’s not on that paper without coming back and having an emergency budget committee meeting, all of a sudden it looks like they have found money,” says Ramsey. “Just writing it down and agreeing to stick to it, and then legitimately sticking to it, will cause your money to work so much harder.”

In tough times, when many households are seeing incomes fall, a monthly budget meeting can help families adjust more quickly to financial setbacks.

“When you’ve got a situation where someone’s had a job layoff, it helps you identify what is an absolute necessity and what are just wants,” says Ramsey. “When you have a monthly process, and you’re course-correcting a little bit at a time rather than giving everybody whiplash, everybody’s on the boat with you. Everybody’s helping you make the turn.”

Debt

Government bailouts of some of the country’s largest credit card companies haven’t stopped them from boosting interest rates and cutting limits. So how can you make sure you don’t fall victim to a debt disaster?

The first step, says Ramsey, is making sure that you stop the flow of red ink.

“Your first goal has to be taking care of necessities in the household before you start reducing debt,” says Ramsey. “The second thing we tell people is, don’t reduce debt until you’ve got at least $1,000 saved as a starter emergency fund.”

Once those conditions are met, Ramsey suggests listing all your debts from least to greatest, regardless of interest rate, and applying any extra money in your budget to the first debt on your list. While it may not be the most mathematically efficient way to take on your debts, Ramsey believes that the success of tackling the smaller debts will give you the confidence and drive to tackle the rest.

Foreclosure

The Center for Responsible Lending estimates that 2.4 million homes will go into foreclosure in 2009. If you’re afraid you’re on the way to joining that frighteningly large number, don’t wait for the Making Home Affordable program to get rolling.

“If people have already fallen behind or are on the verge of falling behind, the most critical thing they can do is recognize that there is help out there and pick up the phone and either call your servicer directly or call a nonprofit housing counselor to see what options may be available to you,” says Josh Furman, director of counseling at the Homeownership Preservation Foundation.

Housing counselors and lenders have lots of options at their disposal to help homeowners hang on. There are temporary measures like forbearances, where you add a little more to payments in the future to make up for a few missed payments in the past. Or there are long-term measures like extending the loan term, lowering interest rates or even forgiving some of the debt.

Furman stresses that even those who think they’re beyond help may have options. “Up to the point of receiving a foreclosure notice letter, there’s always something that can be done, based on the different circumstances, so please pick up the phone and reach out to the Homeowners Hope Hot line or a reputable nonprofit organization,” says Furman. (That number is (888)995-4673.)

Wrecked retirement account

Government attempts to boost investment and stabilize the stock market have seen mixed results. So how can people repair the damage caused to their retirement accounts by this recession on their own?

The answer depends primarily on your age. If you’re still years away from retirement, “the paper value of your portfolio is down right now, but it doesn’t really have that much meaning to you unless you’re distributing some of that money for income,” says Steve Pomeranz, a Certified Financial Planner and the host of the weekly public radio program “On the Money.”

So what’s the advice for those closing in on retirement, or who are already there?

“The problem is, the horse is out of the barn,” says Pomeranz. “They’re going to have to tighten their belt the best that they can until this whole thing cycles out and the economy picks up again. It may take two or three years, but they’re just going to have to try to reduce the amount of distributions from their retirement accounts as much as possible.”

If you’re uncomfortable about future risks to your portfolio, he says, it may be right for you to redistribute more of your assets into cash and bonds rather than equities. Still, he cautions against getting out of equities altogether.

“Now is the time to say, ‘It is what it is, but I still want some equity exposure, because if I’m wrong and the market goes up, I’ll participate,'” Pomeranz says.

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