Facing Up to Personal-Finance Realities

Your credit score is going to matter even more: Your credit score will more likely determine whether you get a loan at all, not just set your interest rate. Banks and other financial institutions already have huge amounts of bad debt and aren't looking to add more. That means you're going to need good credit to qualify for a loan, and if you don't, you're going to have to put up a lot of cash or you may be out of luck.

Taxes will increase and government benefits will be cut: While the Obama administration is looking to give the largest middle-class tax cut in history as part of its proposed budget, at some point the stimulus-spending costs will need to be paid. There are only two ways to achieve this: increase tax revenue or cut spending. The likelihood is that both will occur.

This economic crisis will hit home: In past recessions, a large number of people were hurt only slightly. This time, you or somebody you know is going to end up in a tight financial situation where there is no "good" financial choice.

While you want to help those you can, don't put yourself at financial risk. Having a plan for yourself will make dealing with a financial crisis easier to handle.