We’ll finish 2008 with 24 bank failures in the U.S., more than have failed in the entire rest of the decade. Two of the three largest bank failures in history, Indy Mac and Washington Mutual, happened this year as well. Let’s hope for a much better 2009!

The news media and other sources make the financial situation seem doomed. It can be scary for the average consumer. It is hard to know what to do with investments – even those in what is thought to be the safety of bank accounts. There is one step that everyone can benefit from taking:

Don’t Panic!

No matter how bad it may seem, take your time when making decisions. You need to look at all of the angels before you make a move. Taking money out of an investment account may give short term security in these financial times, but what will it do to the long term tax picture?

Take a deep breath and write out what you are considering for your next step. Review it with your spouse, parents or other trusted advisor. Seek out the advice of your tax professional, your financial advisor and other industry experts. Listen to the words of others, do your own research and then make a decision about the right path for your finances.

It is the rash decision that will cause financial pain. Take the time needed to give your finances the attention that they deserve and you will find that your financial decisions are usually right on target.

The tough economic times has forced many people to evaluate their finances. The fear of losing a job (or the pain of one already lost) has stopped the spending and forced the savings. Although the changes have made the economic times even tighter it may turn out to be the best thing for everyone.

1. Stop spending money that you do not have. It is one thing to use a credit card for convenience. It is a different story when you are using it because you do not have the money to buy the item out right. If the money is not already set aside for the new couch, new computer or other purchase then put it off until the money can be saved.

2. Skip one evening out or meal out every week. Put these savings into a special account that you will not touch for any reason what so ever.

3. Start an accountability group. Share tips for building savings, cutting spending and even investing. Having people that will call you out when you are going down the wrong path can be the best way to get on the right track for your finances.

Start the New Year with a new attitude about finances no matter how you might end the old one. You can begin saving money right now, start cutting back on spending and find new ways to create a sound financial future.

The budget is made, we write down what we spend and we limit our purchases to necessities only. That usually lasts for the first couple of weeks or even a few months before the checkbook springs a leak.

It starts off so minor that I don’t notice the problem. At the end of the month there is just a few dollars less to put into the savings account. Eventually there will be even less at the end of the month until a deficit begins to show up. It doesn’t take long to uncover the leak and the sooner we find it the less damage that will be done.

1. Fast food purchases – one meal hear and one meal there starts to add up. The convenience of not having to cook or clean is enticing and the more we do it the more we want to do it. The irony is that most of the time I can have something on the table almost as fast as we can go through the fast food line.

2. Impulse purchases – picking up a water or soda while filling up the car, getting some snack food while buying groceries or that new purse that I’ve needed but didn’t budget for this month can all steal a just enough from the budget to do damage.

3. New costs – items add up during the year but they don’t always get added on to the budget. One item not budgeted for can put a drain on the finances.

The best thing to do when the money starts to run low is to evaluate the plan. There are times when the budget gets a once over every month in our home and there are times when we go half a month without a worry. Keeping an eye on the bottom line will help you find the leak in your finances before it puts you into a hole.

My friend has been struggling recently with her finances. She married an ex-boyfriend after her husband was killed. The new husband went through the money she received for the death and dug her back into debt after she had struggled to get free. Now she’s alone again and having to face the debt, the empty savings account and four children that expect the stay at home mom to provide for their needs.

It seems that when things are at their worst is when you get hit the hardest. Instead of throwing in the towel or trying to bury your head in the sand, take the bull by the horns and get started right now on fixing the problem.

1. Find creative ways to make some money – she is looking at using her love of writing to start a freelance writing career.

2. Talk to creditors – if they know you are facing a problem BEFORE you get behind then they are much more willing to work with you.

3. Start rebuilding the savings – even if it is just a few dollars a week, having some money set back will make any situation feel a little lighter.

4. Ask for help – when every rug imaginable has been pulled out from under you it is time to reach out to those that you trust and ask for some help (guidance, accountability and yes even financial).

No matter how bad things get there is always hope. The key is to start right now to make the bad days a part of a past instead of allowing them to control your future.

I know how every penny counts. I was sharing how to get coupons with my sister in law who has three children in diapers.

We know that pennies count, we just have trouble counting our pennies. Her response is the same for many people in today’s society. We understand the CONCEPT of saving money we just have trouble implementing the necessary changes. Here are a few tips to help you get going in the right direction.

1. Start small - little changes, like using coupons for regular purchases or joining rewards programs at stores where you purchase on a weekly basis, will start adding a few dollars to your budget each week.

2. Make a plan - look at your finances and make a plan for the year, for five years and for ten years. It will help to make good choices if you know where you are going and why you are going there.

3. Work as a team - sit down with your spouse, family or roommates and discuss the situation at length. It will be easier to accomplish your financial goals if have support each step of the way.

4. Start right now - if you wait until tomorrow then tomorrow might not get here. Make a small change in your spending habits today.

5. Keep it positive - trying NOT to do something is much more difficult than trying TO do something. Instead of cutting things out try replacing one negative financial habit (eating out) for a positive, money saving choice (brown bag lunches).

Every trip begins with one step. Life changing financial plans are no different. Start with one, small step and you will find your way to a secure financial future.

Less than two weeks before Christmas, toy retailer KB Toys files for Chapter 11. This isn’t the first time KB has been in hot water. The toy retailer filed for bankruptcy in 2005. The difference is this time, they are undergoing liquidation. According to NY Times reports, KB said in its filing in US Bankruptcy court in Delaware that it was struck by “a sudden and sharp decline in consumer sales due to macro-economic concerns.” Holiday sales fell by 20 percent this year over 2007.

KB Toys plans to close all of its retail stores. That includes 277 shopping mall locations, 114 outlets, 40 KB Toy Works stores and 30 holiday stores. Plus it will sell it’s wholesale distribution business. The “going out-of-business” sale is expected to begin immediately. That could be good news for shoppers looking for Christmas bargains and for competitor Toys “R’ Us, which has $6 billion in debt. Toys “R” Us hopes reduced competition impacts their sales.

Photo Courtesy of AdamL212

There are times when you want to pay down (or off) debts so that the payments are no longer pulling down your monthly budget. There are also times when you are better off keeping the debt and investing the extra money that you have.

1. No interest loans - these are the specials that many companies run (particularly at this time of the year). If you have the money to buy the item why not utilized the no interest loan and put the money into an interest baring account. You could even set up payments to come directly from the account if you are worried about forgetting to make a payment. The interest you gain may not be a fortune but it will be more than you would have made if you had paid cash.

2. Low interest debts - introductory rates on credit cards or even some loans make it viable for you to put extra money in a higher interest baring account instead of paying down the debt. As long as you are making more in interest than you are paying out it is a good choice.

3. Tax deductible debts - some loans (or at least the interest from the loans) can be written off on your taxes. This can make it possible to make more by investing additional payments instead of paying off a loan early. Talk to your tax professional about how paying down a tax deductible debt will ultimately affect you.

Keep in mind that when you have the money available to pay off a debt (even if it is invested in some other account) this is credit and not debt. The goal for a prosperous life is to always have the money to provide for your life.

Unexpected money is always exciting. Of course most of us expect the bonuses that have become such a traditional part of the holidays. While a nice big turkey may have been enough for the Cratchets’ for Christmas I would like something a bit more substantial.

What should you do if your bonus comes through like it did for a number of families in Illinois (the bonus were based on the number of years of employment and came from the owners’ sale out to new owners).

It is tempting to spend any “found” money from raises to bonuses to tax refunds but there are so many better ways to enjoy the fruit of your labor.

1. Pay off revolving credit and debts so you don’t have to stress over those payments.

2. Put some of it in an emergency savings account (be working towards three to six months worth of expenses).

3. Set aside about 1/3 for any additional taxes that may come from the bonus especially when it is unusually large.

4. Indulge with around 10 to 25% of the bonus so you don’t feel like you are deprived and become overwhelmed with the urge to spend it all out of spite.

There is nothing wrong with spending part of the bonus that you receive but you may want to reserve the largest portion for savings and debt reduction to give you a long term peace of mind.

Not everyone is comfortable living life with out guarantees. Having to worry about where the next paycheck might come from pushes some people to the breaking point. But some others choose this life and actually find it is the perfect way to live.

No clocking in - when you make a living without a job then you are only accountable to you.

Do what you enjoy - there is no push for a paycheck so you work at things that you love (which isn’t actually work).

Forget the holidays (or the weekends for that matter) - everyday is a peaceful break from the traditional grind that others are forced to face.

It is not a wise decision to jump into this life with out a plan. It is a lot like jumping from a plan without a parachute. Not much good can come from it. Before you begin your life of ease and comfort you will need to take a few steps to head you in that direction.

1. Create a budget that you can (and do) stick to.
2. Eliminate all debt.
3. Start doing what you are passionate about before you walk away from your secured employment (and figure out a way to get paid to do it).
4. Talk to the family because you will not be in this alone.
5. Create a savings that is able to pay your budgeted expenses for three to six months.

Anyone can step out into a life of retirement type living today with just a little planning and a lot of faith.