Good Money Habits Make a Market Slump Less Scary

Ways to Plug the Little Items

These are one-time exercises where you examine your spending and monthly expenses and clean the house. Chances are you will not feel many of these changes, but it will loosen the belt on your finances considerably. Before you know it, you will have a few extra hundred dollars a month to go towards retirement savings, paying off of debt, or that summer vacation. Some easy ones:

Stop ordering in food. Even if you don't feel like cooking, go to the supermarket and pick up a prepared food meal. You will still spend less.

Get rid of credit cards that have annual fees.

Change banks if you do not have free checking or free ATM.

Check your bank statement if your bank has snuck in fees for negotiable items (for example, canceled checks).

Reduce your investment expenses by switching to no-load mutual funds, eliminating brokerage fees, reducing management fees and shopping for a broker with low trading costs.

Examine if your HELOC (home equity line of credit) is charging you a fee.

Manage Your Risk

I have received many phone calls from clients that wanted to use their current home equity as the down payment for a second home. This second home can be for investment purposes or for a vacation. This is not managed risk. It sounds like a great plan in a thriving economy, but unless you have cash for six months of mortgage payments and cushion for repairs, don't consider it. This doesn't mean you should not take any risk at all.

For example, if you want to buy a second home, plan for it. Be aggressive about saving that money in a no-load mutual fund, such as a balanced or moderate allocation fund, until you have enough for a solid down payment and proper cushion. You will sleep much better at night when rental rates are decreasing or you don't have a tenant for three months.

Regardless of the economy, your money matters and a weekly priority of reading instant money tips, viewing money affirmations, getting organized, and taking an active interest in your investments and retirement will ease any anxiety you might be feeling. It will enable you to see concrete results, such as higher 401(k) balances or even a fantastic vacation to Hawaii.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting