The big 'R' word is in all the headlines these days, while economists and pundits disagree over whether we're already in a recession, on the brink, or able to avoid one. But a recession is not about words or opinions or statistics. It's about your life and your personal finances.

What's a Recession?

The technical definition of a recession is "two consecutive quarters of negative growth in the economy ( GDP )." Of course, the official recession tabulators, the National Bureau of Economic Research, can never actually confirm that we're in a recession until those six months of economic pain are behind us. So don't worry about the labels. Instead, you should worry about how well prepared you are to survive an economic slowdown.

The recession we're now entering (yes, that's my opinion) will be unlike previous major slowdowns. You may not remember back to the early 1980s when interest rates soared to keep up with inflation . That was a more "traditional" recession, with tight money and high interest rates causing an economic slowdown that spread from housing to autos to steel. And then after a year or two, recovery started in most of the economy. Of course, some jobs in autos and steel were lost forever, but the economy rebounded in other areas.

The first recession of this new millennium will be quite different. For one thing, the pain will be more widespread. This time around it isn't only laborers who will lose jobs. The banking and financial services industries are already cutting employment, as well as retailing and other consumer-related sectors . And this time around consumers are more exposed to those rising rates -- on credit cards and on adjustable rate mortgages , which were not a major part of our economy 26 years ago.

And, although the Federal Reserve is desperate to push interest rates lower to get the economy moving, they'll have a much tougher job this time around. That's because lenders won't cut rates for people already overloaded with debt . And because America is deeply in debt as well.

Cramer: We Need Rates at 1.5%

For years we've been sending dollars overseas to buy everything from towels to shoes to oil. Those foreign companies and countries have been collecting those dollars and then sending them back to finance our federal budget deficits. They lend those dollars back to us as they purchase our Treasury bills , notes and bonds . Lately, they've been using the dollars to invest in American banks and financial services firms , hit hard by the mortgage mess.

So as the Federal Reserve and Congress try to rescue our economy from recession, their options will be limited by the fact that we -- and they -- are already so far in debt.

How to Survive a Recession

You're going to have to take some actions to save yourself and your family from the consequences of recession. And even it it's a mild recession, you'll be better off in the long run if you act on these Terry's Tips:

1. Face Your Finances: Pile up those credit card bills and make a list of what you owe and the minimum monthly payments. Then total up your monthly expenses. Figure out where you stand, and how you could withstand the loss of a job, or overtime.

Knowledge is power. If there's a gap in your finances, you have to fill it, and there are only two ways: Earn more or spend less! You can't borrow any more.

2. Get More Work: Start looking for an extra or part-time job now before there are a lot more people out of work. Maybe it won't be in your line of business; maybe you'll earn extra money as a waiter, waitress or sales clerk. Or have your spouse or teenage kids consider getting a job. Then use that money toward paying down your debt.

3. Pay Down Debt: Floating rate debt will bury you. It's not the original purchases you charged, but the mounting interest that crushes your future. If you double the minimum monthly payment on your credit card and keep making that same payment every month, and don't charge a penny more, you'll be out of debt in less than three years.

4. Deal With Your Mortgage: If you have a mortgage, contact your lender or mortgage servicing company if you even think you'll have problems. If you have an adjustable rate loan, quickly shop around for a fixed rate loan while you still have a job. If you have an FHA loan and are not behind on your payments, call 1-800-CALL-FHA for a new program they have to refinance you out of an adjustable rate loan.

5. Stop Shopping! Start Saving!Yes, I know this would guarantee a recession if everyone did it, but I'm talking to you. And you must stop shopping for anything but necessities, and start saving cash for a rainy day, because the hurricane warnings are upon us.

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In Too Deep? Pick Up the Phone

Finally, if you feel you're in over your head, call Consumer Credit Counseling Services at 1-800-388-2227. That telephone number connects you to the nearest local agency of this national non-profit organization. You don't have to be buried in debt to contact them to help organize your spending and debt. You can even get actionable help on the phone.

This counseling doesn't go on your credit report, and it could help you avoid a financial disaster. But if you're truly buried or if you are one of the approximate 801,000 Americans who declared bankruptcy in 2007, or the many more who will file this year, Consumer Credit Counseling Services also have a debt management program.

Get Ready for a Recession -- Diversify
Terry Savage is an expert on personal finance and also appears as a commentator on national television on issues related to investing and the financial markets. Savage's personal finance column in the Chicago Sun-Times is nationally syndicated, and she released her fourth book, The Savage Number: How Much Money Do You Need? in June 2005. Savage was the first woman trader on the Chicago Board Options Exchange and is a registered investment adviser for stocks and futures. A Phi Beta Kappa graduate of the University of Michigan, Savage currently serves as a director of the Chicago Mercantile Exchange Corp. She also has served on the boards of McDonald's and Pennzoil.