Be Prepared For A Down Economy

Its interesting to note that while Washington Mutual is going through bank failure, JP Morgan & Chase is acquiring them. Likewise, Wachovia Bank is going under, but Wells Fargo and Citibank are making bids to buy them out.

In a failing economy, how is that one bank is going out of business, but another is doing so well that they can purchase the other for billions of dollars?

The answer is simple. The ones going out of business were not prepared for the economy crisis.

What about you? Is your company prepared for a down economy? Do you have a worst case scenario plan ready? Do you have money tucked away for not just rainy, but stormy days?

Here are some tips from eHow.com:

1) Think about how you can recession-proof your business. Determine how you can keep it running with some type of service work, or sell a product that customers will purchase no matter how difficult the economy.

2) Consider how you will recession-proof your finances. Find a way to put money into an emergency fund every month and try to save six months worth of living expenses.

3) Set a budget and monitor your spending on a daily basis to prepare for a down economy. Write down every expense you have or you anticipate so there is nothing that will keep you from staying on budget.

4) Control your income by saving for large long-term bills. Put a specified amount away every month to pay the semi-annual and annual bills such as insurance; you usually receive a discount for paying in full instead of paying monthly.

5) Diversify your investments with stocks and bonds. Consider moving a large amount of your stock money into bonds during a threat of a down economy, because bonds usually go up when interest rates go down.

6) Make a change of industry. Check out professional contacts, have your resume up to date and keep your eyes open for new opportunities.

7) Prepare emotionally for a down economy so you don't panic if it happens.