Meet the Street: Managing Your Finances in Today's Tough Times

Forget the portfolio for a second. Pocketbook concerns are on the rise as people lose their jobs and confront an uncertain economic future. From the recently laid off to the would-be retiree, a lot of folks out there are feeling overwhelmed by their finances and have no idea what to do.

Richard Bloom, Personal Finance Expert

Recent Meet the Streets

Lipper's Andrew Clark

FuelCell Energy's Jerry Leitman

Lipper's Jeff Tjornehoj

Deutsche Banc Alex. Brown's Douglas D. Mitchelson

This is where Richard Bloom comes in. Mr. Bloom is the head of Bloom Asset Management in Farmington Hills, Mich., a daily personal finance columnist for The Detroit News and also was the host of the "Money Talk" question-and-answer radio show for 16 years. We sat down with Mr. Bloom and presented him with a variety of all-too-common scenarios. He gave us advice and ways to make things better.

His strongest piece of advice? Put a padlock on the pocketbook and tighten that belt. Many people just have no idea how much they're spending. Unless people can control what's going out of their wallet, they'll never keep anything in it.

TheStreet.com: Let's just say I got laid off. In addition to some severance, I get unemployment, but I don't have any benefits. Aside from $1,000 in stock and a few hundred in a 401(k) plan, I don't have any savings to speak of. My credit card bill is $3,000 and the employment situation isn't looking good. At this rate, existing on unemployment and whatever work I can find, I can almost get by. Aside from finding a job, what is the first thing I should do financially?

Richard Bloom: I'd make a cash-flow statement. Make a list and cut expenses. Most people, if you ask them, don't have any idea what it costs for them to live a month. I know I have someone in and they say, "Well, it costs me $1,500 a month for me to live." And I look at them and I say, "Your mortgage payment on your house is $1,200. How's it cost you only $1,500 to live? Don't you eat?"

And I find that people don't have a good handle on their expenses. People need to sit down and put the old pencil to paper and figure out what it costs to live each month, and once they know where the money is going then it's much easier to say, OK, this is where I can cut back and make adjustments.

And this person in this scenario has a lot of credit card bills, so we want to look at where we can lower the interest rate on those charge cards. We all get those deals in the mail. And they're on the Internet. We need to be a little proactive to find a better rate.

You're also going to need some health insurance in that situation. Illness can really put you over the edge financially. I'd be exploring COBRA through your old employer. You can also try to find some organizations that you can piggyback on at least to buy some sort of catastrophic coverage. ...