You can survive a recession, and you may even prosper.

In simple terms, a recession is when our economy is such that gas and grocery expenses are up and job opportunities and incomes are down. Not everyone experiences a recession in the same way or to the same degree; but most will agree that money gets tight and surviving the tough times becomes essential.

There are three basic issues that should be reviewed and adjusted to survive a recession. The three issues are:

- Current situation

- Income

- Expenses

The real key to surviving a recession is to ensure that income meets or exceeds expenses.

Assess Your Current Financial Situation

It is no secret that living by a budget is the first piece of advice most financial planners will issue. A budget is nothing more than a list of your expenses, how much they are, and when they are due, along with a comparison to your income. Your lifestyle denotes what is on the expense list; and how much money you bring home determines the amount of your income.

Make a list by collecting all past bills for the past two or three months. Write down “when” and “to whom” it was paid. Add the date when the bill is due. Then, for each month, put them in the order of most expensive at the top of the list and the least expensive at the bottom of the list.

While reviewing this list, ask yourself, “What do I need?” When you cross off what you have bought that you did not need and are left with the basics, then ask yourself, “How can I get this cheaper?”

Then, there is the income side. What, if anything, has happened to change your income? There are two kinds of income; net and gross. Gross income is how much you make, while net income is how much you bring home. Living on a budget can be a challenge, but it will be important to figure out how you can get what you want, and spend less getting it.

Assess Your Income

As there are more choices for the expenses, we will address the income issue first. There are only a few options here, including:

- Increasing your income by increasing the hours you work at your current position (for non-salaried workers only).

- Looking at what deductions you have taken out. Visit your company’s Human Resources Director to discuss some options.

- Getting a second job or weekend position.

- Taking part-time work as a consultant or by doing project work.

Whatever you decide, be careful that you have not signed a non-compete clause or other restriction with your employer that would prevent these options.

Determine Your Expenses and How to Reduce Them

Income is half the equation with expenses being the other half. Basic life expenses usually include the following:

- Home rent/mortgage

- Car/truck payments

- Insurance in various forms

- Utilities

- Credit cards/loans

- Groceries/Gas

- Everything else

Here is where the real belt-tightening begins with, some possible survival guidelines.

1. Refinance loans.

1. Mortgage loans can be renegotiated.
2. Car loans can be combined or “renewed” at slightly higher rates, but, past due payments become current.
3. Getting one credit card to transfer all the others onto will give you one payment and generally at a lower interest rate. (Cut up all the old cards but one, to be used strictly for emergencies.)

1. For flexible bills every month, try to get either a budget plan or cut down on using certain utilities and services.

1. Electric, gas, and water utilities are famous for their budget plans; one amount, every month, is easier to budget than several that fluctuate.
2. When not in use, turn it off.
3. Look hard at the cable bills, telephone bills, and cell bills; is now the time to change plans or reduce the options you are buying?

1. When you have to buy it, get it on sale or buy less of it.

1. Grocery coupons are great if you already buy the product and don’t have to go out of your way to get it.
2. Do research online for cost savings.
3. If you spend $200 a week on groceries, do you need to go out to dinner twice a week? If you want to go out, cut back on the groceries you buy.

1. If you have more than one essential household item, seriously consider getting rid of one or more of them or cutting back.
1. Are multiple cell phones needed?
2. Can the family car pool on Saturday instead of taking three cars?
3. Four televisions in a three bedroom house?

Once you figure out exactly how little you can live on, surviving a recession is not nearly as scary as it once seemed. Above all, keep the faith; you will get through this and things will get better.

Additional Resources

For more information on specific savings, check out these Web sites:

• Recession Survival 101 at http://www.recessionsurvival101.com/
• AskMen.com at http://www.askmen.com/money/investing_200/208_investing.html
• Being Frugal.com at http://beingfrugal.net/2008/04/03/frugal-tips-to-survive-a-recession/