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
- Wrecked retirement account
UnemploymentEven 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.
OverspendingReining 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."