September 2006 A Guide to Making Your Money Stand Up to Tough Times Okay, welcome back. Let's take a look back at a few current events from this summer. On August 13, crude oil futures reached a record high of $78.40 per barrel. On August 28, the New York Times reported that the economic growth in recent years hasn't lifted real wages of most Americans. In other words, company profits haven't meant bigger paychecks. Although the Fed paused in August, the federal funds rate (which almost directly influences interest rates) reached 5.25 percent in July. What does all this mean? A lot of us have stagnant wages, gas prices are high and interest rates — though not historically high — are higher. In short, this is a bad time to be a debtor. Perhaps the good news is that little else can go wrong. At any rate, here are a few tips for weathering the storm. 1If you owe money, consider locking-in your rate wherever you can. If you have an adjustable rate loan, (that's not fixed for more than a year) ask a lender about refinancing. Nobody knows for certain, but interest rates could continue to rise. If you know you can't manage increased payments, it's better to pay a little more now than risk a situation where you have more money going out than you have coming in. If your credit card rates have risen to a point that's beyond your control, consider a debt management program in which credit counselors will negotiate with your lenders and establish a fixed payment amount each month. In a period of economic uncertainty, the goal should be to control whatever you can. 2Become intimately familiar with your budget. How much more are you paying for gas? How much are you saving each month? If your adjustable rate interest rises another 1%, what will that do to your budget? Is there any breathing room — spending that can easily be cut if gas prices, inflation or interest rates rise? Go over your budget in detail — done correctly it is the best gauge of how severe your situation is. 3Stop silly spending. If you're facing economic uncertainty, by all means stop spending. Sometimes it helps to tell yourself, "Okay, I'm going to freeze spending on dining out and other extravagances for three months. Then I will reassess things." 4Pay down as much as you can. If you can save some cash by controlling spending, put it toward your adjustable rate debts first. The less you owe, the less you will be impacted by rising interest rates. 5Keep a good attitude. There's a lot of good economic news out there as well. A raise or promotion could be on the horizon. And whatever belt-tightening you do in the short run, helps in the long run. Navigating Rough Economic Seas Two Minute Quiz Smart Money Management Simplifying Life Workin' It The Right Credit Card Short on Cents Past Issues

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