- The Washington Times - Friday, September 28, 2001

When job layoffs make headline news, coupled with huge drops in the stock market and threats from terrorists, consumers get a little nervous about their jobs and making ends meet.

Considering that monthly housing costs are the largest expense for most families across the country, during these trying times, homeowners and renters alike worry about making the house payment next month.

I've been roaming the Internet, reading the opinions of financial experts and looking at the facts vs. the hearsay. Here are some tips on how to handle the anxiety that comes with financial uncertainty. I hope they will help reduce your anxiety and then help you move forward. There are also some great Web sites where you can conduct some research before making financial decisions.

On that note, the first step to take for homeowners and consumers is:

Don't panic. Nearly every stock watchdog Web site I've looked over through all of this downsizing quotes financial experts who say "hold" stocks right now. For those who are wanting to buy a house, the stocks you sell today could well have represented the down payment money you would have had later.

Salomon Smith Barney equity strategist Tobias Levkovich, quoted on www.CBS.MarketWatch.com, dropped his year-end target for the Dow Jones Industrial Average to 9,700 from 11,400 previously, and lowered his 2002 forecast to 10,800 from 12,100. That means by the end of the year, the losses of the past few weeks may be recouped. If you're planning for 15, 20 or 30 years, this is not a substantial concern in the market for three months. Other economists are claiming that 2002 will come back with a vengeance economically. Like the song says: "You gotta know when to hold 'em."

Get on a budget. The main reason most people panic in tough financial times is because they live from paycheck to paycheck not because they don't make enough money, but because as soon as they earn it, they spend it. Budgeting is the first step to financial freedom. Set up a budget and stick with it. MasterCard's Credit Talk Web site is www.creditalk.com.

Exercise the "GOOD Strategy." My GOOD Strategy is simple Get Out Of Debt (GOOD). This simply means reduce your cash outgo by paying off consumer debt, car and student loans and so forth. Depending on your debt load, this could happen in a few weeks, months, even years, but don't lose hope. If you have equity in your home, consider taking out a home-equity or cash-out refinance loan to pay off your consumer debt if you are then willing to cut up the credit cards and rein in your spending-on-credit habits. If a refinance is not an option, then start paying off the small bills first.

When one disappears, place that monthly payment on the next debt and so on until your debts are gone.

Get credit counseling. If job loss is on its way or just happened, talk with credit counseling services earlier than later. These folks can talk with your creditors to hold them off from reporting you to credit agencies and also set up a payment plan that works with your new, lower cash flow. See the Debt Counselors of America site at www.dca.org.

Save up an emergency fund. After setting up a budget, this is the next priority (as long as the debt is gone). Save up enough money that would carry you through three to six months' of living expenses. This way, that next emergency won't hit as hard while you're looking for work and the rent gets paid. See the Choose To Save site at www.choosetosave.org.

Increase your cash flow. Swallow your pride and pick up a second job if necessary to meet some of the above goals. Also, could you do without some of the stuff you have? How about selling it and stashing away the cash? If push comes to shove, you could even take in a boarder to help with the cost of living.

Grab opportunity when it knocks. For those with some cash in the bank right now opportunity is knocking loudly on Wall Street and at the mortgage bankers. Have you been kicking yourself for not buying those great stocks three years ago? Well, you might consider this a sidewalk sale of sorts. There's something to be said about "patriotic investing," and you'll be glad you did once the market recovers. If you've been looking at buying a house or refinancing, take a look at the interest rates right now below 7 percent a two-year low.

Downsize. If all the above just isn't helping you with making the rent or mortgage payment, then downsize. Renters, look for a less expensive apartment. If it's just you, then look for the person above who is renting out a room.

Owners can rent out their current property and move into a smaller, cheaper dwelling for a time. In some markets, this would actually create a positive cash flow for you with the rent coming in higher than your monthly payment.

Remember: More than likely this is a temporary situation in which we find ourselves. Look for the light at the end of the tunnel, because it's definitely there.

M. Anthony Carr has written about real estate for the past 12 years. Send comments by e-mail (manthonycarr@erols.com).

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