It's been a tough year for investors, but here's some simple advice to carry with you on the road to recovery: Be the light at the end of your own tunnel. Whatever financial issues this recession has caused you, prepare now for a strong future. Not sure how? Read on for a few ways to start rebuilding your finances:

  1. Set Goals
    It's tough to get somewhere if you don't know where you want to end up. Goals are a benchmark to measure your financial progress. You want to retire someday, so calculate how much it will cost. Set goals for all the big ticket things you want to do: family vacation, replace the roof, buy a new car etc.

    Take the time to estimate how much each target will cost and keep inflation in mind. Create a timeline for accomplishing each objective. The goals should reflect your current situation whether you are in between jobs, already retired or just graduating from college. (Follow these five steps to manage debt without cutting up your credit cards. Read Define Your Personal Debt Redline.)

  2. Set a Realistic Budget and stick to it
    Use the goals to set up a monthly budget. Here's a budgeting technique:
    • Pull out your bank statement and all the receipts from purchases made last month. Make a list of budget items that you may not have paid last month such as annual property taxes, quarterly insurance payments, etc.
    • Divide every purchase into discretionary or non-discretionary
    • We've all learned to be thrifty during the past year, so apply your new-found skill to each item you spend money on. For non-discretionary items, negotiate the cheapest way to meet the need. For example: shop for the lowest telephone plan. For discretionary items, consider what can be totally eliminated. For whatever is left over search for alternatives to receive the same result at a minimal price.
    • Total all expenses and subtract the amount from your monthly income. The result is either a profit to apply to savings or a deficit which requires additional sources of income.

    Setting up a few good habits today can lead to a lifetime of financial well-being. To learn more, read Six Months To A Better Budget.

  3. Fix Your Credit
    Don't wait to whittle down debts. Get a copy of your credit report no matter how good or bad it is and establish a plan to make it better. Open a secured credit account. Use it for a small purchase monthly and pay it back monthly. Consider debt consolidations or refinancing. Ask creditors for a lower rate. Set up a payment plan to reduce outstanding amounts.

    Protect the credit you have by understanding all the new terms credit card issuers are sending out with statements. Shop around for better terms and rates. (Managing your debt could mean the difference between spending $45,000 or saving $184,000. Read Expert Tips For Cutting Credit Card Debt to learn more.

  4. Rebuild Your Savings
    The Department of Commerce reports that Americans have increased personal savings. Keep it up. If you tapped into your savings due to job loss, make plans to build it to at least 6 to 8 months worth of your monthly income. No matter how little you can afford to put away, every dollar counts. Search for interest bearing savings accounts to make your money work for you while you save. (Find out how to balance living well today and retiring well tomorrow. Check out Enjoy Life Now And Still Save For Later.)

  5. Invest Now
    If you've been sitting on the sidelines waiting for the stock market to rebound, you're missing it. The DOW has been inching back toward the 10,000 mark and new IPOs are launching. Evaluate your portfolio holdings to sell off the dogs and look for undervalued investments to add. Invest based on your personal goals and risk level. (Money is tight, but don't let that stop you from pursuing future riches. Check out Invest On A Shoestring Budget.)

  6. Grow Your Business
    Take advantage of cheap office space by locking in leases. With the job market still lagging, now is a good time to hire contract workers or permanent employees if you can afford them. Request new bids from suppliers to cut cost and use creative initiatives to increase productivity.

The future is what you make it. Don't miss this chance to prepare for new opportunities. Make changes now and you'll reap the rewards in the future. (Want to learn more? Check out 7 Ways To Position Yourself For Recovery.)

Related Articles
  1. Savings

    What Your Credit Score Means for Your Love Life

    Wondering if your significant other wants to commit and is reliable? The Fed might have the answer.
  2. Entrepreneurship

    Top Legal Tips for Starting a Business

    Before you launch a new business, make sure you're on top of the key issues that most startups face.
  3. Investing

    3 Healthy Financial Habits for 2016

    ”Winning” investors don't just set it and forget it. They consistently take steps to adapt their investment plan in the face of changing markets.
  4. Investing News

    The 10 Fastest Growing Green Startups in 2016

    These social entrepreneurs adopt triple bottom lines that champion urgent environmental problems while generating returns for shareholders.
  5. Retirement

    Roth IRAs Tutorial

    This comprehensive guide goes through what a Roth IRA is and how to set one up, contribute to it and withdraw from it.
  6. Entrepreneurship

    Multilevel Marketing Isn't Always A Scam, But It Often Is

    Nerium and Amway are popular direct sales companies that recruit new buyers and sellers to make a profit. Sadly, many direct sales firms are scams.
  7. Entrepreneurship

    10 Characteristics Of Successful Entrepreneurs

    Do you have the qualities of a successful entrepreneur? Those who do tend to share these 10 traits.
  8. Investing

    5 Up and Coming Social Media Startups

    Although the days of Facebook's dominance aren't close to being over, here are some new creative platforms gaining traction on the worldwide web.
  9. Investing

    3 Small Steps to Maximize Your Investing Goals

    Instead of starting the New Year with ambitious resolutions, why not taking smaller manageable steps that can have a real impact.
  10. Investing

    7 Creative Ways to Save for an Early Retirement

    Take note of these out of the box steps you can take towards securing yourself an earlier, more comfortable retirement.
RELATED FAQS
  1. Can a debt collector contact me about a debt that's no longer on my credit report?

    According to Experian, a debt collector is permitted to contact a consumer about a debt that is no longer on the consumer's ... Read Full Answer >>
  2. Are personal loans considered income?

    Personal loans are not considered income for the borrower unless the loan is forgiven. In other words, you cannot be taxed ... Read Full Answer >>
  3. Are secured personal loans better than unsecured loans?

    Secured loans are better for the borrower than unsecured loans because the loan terms are more agreeable. Often, the interest ... Read Full Answer >>
  4. Can personal loans be included in bankruptcy?

    Personal loans from friends, family and employers fall under common categories of debt that can be discharged in the case ... Read Full Answer >>
  5. Can Sallie Mae loans be consolidated?

    Sallie Mae loans can be consolidated with other federal loans, but not with private loans. For federal loan consolidation, ... Read Full Answer >>
  6. How does Sallie Mae disburse funds?

    Sallie Mae is the number one provider of financial aid and student loans in the United States, servicing over 25 million ... Read Full Answer >>
Trading Center