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What Can You Do When The Economy Stumbles?

By Craig Day, The News On 6

TULSA, OK -- Financial counselors say they're seeing firsthand how worried people are about the economy.  More people are seeking advice about their finances.  What should you do when the economy stumbles and your own purse strings are tight?

At Christian Credit Counseling Service in Tulsa, they've seen a 25% increase recently in people asking about financial counseling.  With Wall Street woes, struggling stocks, and fear about the future, many people are worried.          

"They realize they are in trouble and I think the economy, problems in the economy have helped bring that to light," said Harold Hendricks with Christian Credit Counseling Service.

Counselor Harold Hendricks says most people get financial counseling about a year later than they should.  But, with unemployment at a 14 year high, and more  home foreclosures, now is the time for people living paycheck to paycheck to act.

"You need to get serious about it now in this kind of economy," said Harold Hendricks with Christian Credit Counseling Service.

Getting serious begins with coming up with at least $1,000 for emergencies.   And, taking a close look at spending habits to find out exactly where your money is going.

"Where is the money really slipping through their fingers?  They need to tighten that up immediately," said Harold Hendricks with Christian Credit Counseling Service.

Hendricks also says everyone needs a written budget with set amounts for each category.

"A lot of times they'll do that and find out they are actually spending more money than what they're bringing in.  Then they have to make some tough decisions on what to reduce or what to cut out," said Harold Hendricks with Christian Credit Counseling Service.

It may take a few months to get your budget right, but stick to it.   Hendricks says it's critically important, especially as the economy stumbles.

"We don't know what is going to happen in the near future, or even the long term.  We need to do something now," said Harold Hendricks with Christian Credit Counseling Service.

Hendricks recommends using an envelope system for categories like groceries and eating out.  Budget a certain amount, and when it's gone from that envelope, you stop spending from that category.