Shore up your personal finances

What does the government bailout of Wall Street mean for my personal money matters?

Everyone wants an answer to that question, including yours truly. Unfortunately, the answer at this point is: Who knows? Until we do, I'm going to make a suggestion: I say we stop focusing on what we don't know and can't control and instead turn our attention to shoring up our personal finances.

Evaluate your spending and saving: If you're frightened about what's happened with your retirement portfolio, or worry that the slowing economy could cost you your job, save more to calm your nerves. Find the excess money to save by scrutinizing your spending. Easier said than done during a period of rising prices and stagnant wages, right? But the truth is, you have direct control over allocating your money. You have no control over the stock market's performance.

To help clients cope with the markets, financial counselor Ruth Hayden tells them: "You're not going to be a lemming going off the cliff. You can't avoid the markets ... or else you're going broke safely (via inflation). You have to be in the games even if you don't like how the boys are playing."

• TACKLE DEBT: Want a guaranteed rate of return in this market? Then pay off your debts, starting with your highest interest rate debt first. If you have no credit card debt, but you have a mortgage, then paying it off faster is one way to gain some satisfaction. You'll also get a higher return on that money than you'd get in your savings account. Then again, flexibility is key during uncertain times, so make sure you have some liquid assets at the ready. Your house is no longer an ATM.

• PROTECT YOURSELF: You think the markets are scary? Well, think about the risk of dying or becoming disabled without the insurance in place to take care of your loved ones. With insurance, you can reduce the financial pain of a traumatic event — whether it's a death or disability, a car accident or home burglary.

While it's tempting to give up coverage when finances are tight, being properly insured is one thing you can control. Check to see if your workplace has disability insurance you can elect. Term insurance, which builds no cash value and ends after a certain period of time, is the cheapest form of life insurance. Research rates at www.term4sale.com and figure out how much insurance you need at lifehappens.org.

If your insurance company is making news, don't freak out. Insurers are regulated by the states and safeguarded by state insurance guaranty associations.

• CHECK YOUR CREDIT: There's no bailout plan for credit card debt, so it's up to you to pay your bills on time and make sure your financial behavior doesn't ding your credit score. It's also up to you to shop around for better terms, such as lower interest rates. Until the Credit Card Bill of Rights is (hopefully) passed, several online comparison sites such as creditcards.com and lowcards.com make it easier.

If you haven't done so, visit www.annualcreditreport.com for your free credit report from each of the three major credit bureaus — yours free by law once per year. Erasing mistakes from your report will help your credit score. If you're curious about how you rate, visit www.creditkarma.com for a free credit score.

• PRACTICE SELF-RESTRAINT: I walked into a furniture store recently only to be overwhelmed by the desire to have a nicer bedroom set, a cleaner couch and that chaise longue by the window. I could have pulled out the plastic. I could have drained some savings to "afford" the new things that would quickly become not-so-new. But this wanting of unnecessary stuff and the constant pressure to dispose of the old and upgrade to new is one of the reasons we're in this mess to begin with, isn't it? In this age of consumerism and marketing messages, it's tough to convince yourself that enough is enough. It is.

• TEACH YOUR CHILDREN TO SAVE: With the unknown cost of the government's bailout package on the shoulders of taxpayers adding to the weight of Social Security and Medicare obligations, there's one thing I'm certain of: My kids will pay more in taxes than I do today. They'll also be more responsible for footing the bill in retirement, which is why it's ever-so-critical for kids to get in the habit of saving, working hard, delaying gratification and understanding wants and needs. Given what's happened on Wall Street and Main Street, I wonder who's fit to educate them?