It is no secret that the economy has handed people a real challenge in the past few years. Many people have gotten no pay increase, taken a pay cut or had their jobs eliminated. And when you have bills to pay this can be devastating to you financial security. Most people are not financially prepared to be without a paycheck for more than a few weeks. Many people have lost their homes and have incurred substantial credit card debt as they have tried to adjust to their decrease in income. If you were faced with a decrease in income would you be able to survive financially?

If you answered “no” to that question or even if you cannot confidently answer” yes”, you should take some time to think about what you can do to be able to answer this with a confident “yes.” If you have little or no debt, but no savings you need to develop a plan for increasing your savings. Even a $1,000 is a good start, but with the way things have gone in the past few years, I would not feel comfortable with less than 6-9 months of expenses saved for an emergency.

If you have debt, you may want to begin with a $1,000 savings account. This will take care of a good number of household emergencies and keep you from use charge cards. Attacking your debt should be next on the list. If you have $5,000 or less you should be able to pay this off without assistance from a third party. Develop a pal to aggressively repay the debt by decreasing your spending and increasing your income, if possible. If you have more than $5,000 in debt or are feeling overwhelmed (no matter what you owe), you should to talk to a consumer credit counseling company.

A consumer credit counseling company is nonprofit and you can talk to them without being obligated to anything. They can answer questions that you have about anything having to do with debt relief of budgeting. If you need help with your debt, they can help you select a debt management program that will work for you. It is important that you take the necessary steps to ensure your own financial security, because no one is going to do it for you. You can get help, but you have to ask for it and then be dedicated to the plan that you choose.

Now is the time to evaluate your financial security and decide if you could survive a decrease in income. If you cannot, today is the time to look at your options for planning for an unplanned decrease or loss of income.