Carol McManus

Unless you have been vacationing on a remote island without any electronic or print links to the rest of the world, you know by now that the US economy is hovering on the brink of disaster. Mitigation of true meltdown is being worked on by the Congress, but even with the $700 million bailout, there is still a lot of work to be done.

As independent business people there are three possible ways to respond to the current environment. One is to find the nearest tent; zip up the flap and wait for the sandstorm to blow by. The second is to continue business as usual with rose-colored glasses in place assuming that all will be well tomorrow. The third response is to get seriously informed, roll up your sleeves and look for every tactic available to you to not only stay afloat during these turbulent times, but come out stronger on the other side.

I've been researching the lessons learned from The Great Depression and watching the blogs. There are an array of pundits, doomsayers, and armchair quarterbacks. But there are definitely some basic areas of agreement between all of them. First, weathering the economic storm is every individual's responsibility. While government can execute a massive bailout to stabilize the economy, they cannot and should not reach into our personal lives. Second, we as a society need to shift our priorities and be willing to sacrifice; something that doesn't come naturally or easily to baby-boomers or the generations that are following them.

So how do we do that? We are focusing this week on our need to sacrifice as individuals and families. If we start there, understanding the sacrifices necessary for our companies to survive will become much easier to understand and support.

Use this list as a place to start to insure your financial future and perhaps even survival over the next few years.

1. Review your family budget. If you don't have one, go back over every bank statement, credit card bill, and expense since the beginning of the year and create a spreadsheet of where your money is being spent. Now redline every single expenditure that is discretionary and not critical to your everyday life. This may include housecleaning services, dry cleaning, Starbucks coffee, lottery tickets, yard services, car washes, manicures, pedicures, new clothes, and more. Be objective and be brutal. How substantially will your life change if you start or stop with these expenses? How often do you really have to go out to eat or can the Food Network become your new best friend?

2. Now go back over your monthly expenses and see where there are opportunities to cut even more. Can you reduce your electric bill by turning off lights and electronics? Can you reduce your gasoline consumption by carpooling? Can you be more economical when you go to the grocery store by cutting coupons, purchasing lesser grade meats, and eliminating prepared foods? How do you justify your cellular phone bills, your premium cable, and ATM withdrawals?

3. Next look at big-ticket items. Can you pay off your automobile and resist the temptation to buy a new one for another year or two? Can you consolidate your credit card debt with the goal of paying it all off within a few months? Is a new computer, plasma screen TV, or new game device really necessary this year? In general, buy what you need...not what you want.

4. Manage your credit to keep your FICO score high, but don't use it unless and until you have to. Credit is tight and will remain tight for the foreseeable future. Don't depend on it and it won't matter to you. In a tough economy, cash is king...keep yours fluid and accessible. Use it for the purchases you choose to make before you pull out the plastic.

5. Napoleon Hill told us long ago that each failure or setback carries with it the seeds for even greater rewards and benefits in the future. Look for the opportunities amidst the calamities we hear on TV. Consider turning off the TV and reading some good books instead.

6. Look for new forms of entertainment for the family that don't require batteries. Check out the attic for your hidden treasures - Monopoly, Scrabble, Chess, Checkers, or even a simple deck of cards. Give up the store-bought cookies and try making a batch of your grandmother's best chocolate chip cookies.

7. Go through every closet, drawer, box, and bin. Use what you have before you make another purchase. Chances are there are dozens if not hundreds of items right under your roof that can make your life fun, entertaining, and perhaps even easier, but because they were hidden away you have forgotten all about them.

8. Recognize that things have more than one use before they go into the trash. That tee-shirt can become a night shirt when the collar gets worn, and then a painting shirt when it starts to get holes from too many washings, and eventually rags when the holes get too big.

9. Fix it before you throw it out. With the help of the internet, even the most inexperienced among us can learn how to do basic repairs, plumbing, and maintenance.

10. Don't stop saving - no matter what. Regardless of what your savings habits have been in the past, put every dollar away that you can. This could be your 401K, your IRA, your savings account or money market, or just your at-home piggy bank. By cutting discretionary expenses, you will release funds for savings you never thought you had before.

11. Used may be as good as new and functional trumps fashion in tough times. Think long and hard about buying a new car versus a certified pre-owned. If you need a new watch, it only needs to tell time. Jeans can be a fashion statement but who is it really benefiting when the label is on the outside of the garment instead of the inside - you or the designer?

12. Avoid impulse buying at all costs and look for bargains. You can still purchase quality, but do your research and wait until you can get the best deal possible before making your choice.

Now for a few tips to help your business:

1. Work harder than you have ever worked and make every minute count. Personal productivity will make you more valuable to your company. By focusing on creating value for others will may you more valuable to the people you support.

2. Take these same saving tips from home and apply them at work. Exhaust every page of the yellow pads (front and back) before you reach for a new one.

3. Cancel renewal subscriptions if you don't honestly read the publication every time it reaches your desk. Share subscriptions with your co-workers; everyone doesn't need their own copy of every periodical.

4. Pause before you hit the print button. Do you really need hard copy or will your electronic file serve the purpose of ready-access?

5. Cut out the donuts. If you have been in the habit of ordering coffee, donuts, and more for meetings, stop immediately. Encourage everyone to bring their own treats from home if food is absolutely necessary.

You get the idea. We are not in a depression yet, and hopefully we never will be, however, recent events have given us a unique opportunity to put into practice the lessons of the Great Depression that our grandparents and great-grandparents had to employ just to survive...and survive they did or you wouldn't be here!