Most of the advice dispensed by the hordes of high profile persons of financial knowledge emphasize cutting back large expenses, limiting or ending the use of credit cards, modifying or restructuring mortgage loans, and protecting or boosting one’s credit score. As far as it goes, such advice has its limited uses, but the recommended activities sound better than they usually work. Eliminating or substantially reducing credit card debt, for example, is not a viable option in the short term for most working class adults. Without more income, as times get tighter we will tend to utilize any available credit more, not less, and mortgage loan restructuring can only work when the banks are interested in providing more credit to people like us. The current advice does not help ordinary Americans avoid financial ruin, and it more frequently makes matters worse by raising our frustration level as it leads us nowhere.

When one still has a job, debts are usually paid. But when one has either lost employment or faces the daily threat of losing it; is crushed under a mountain of increasing debt with a health care disaster or two; then trying to follow the current spate of financial advice utilizes precious resources and distracts one from focusing on doing things that can make a definite difference in surviving tough times. And surviving is the real issue here, so the advisory help we need the most is how best to ride out the storm.

Surviving tough times is not a one-time event or activity. It is a process that takes focus, effort, openness to change and faith. The faith I speak of is not faith in the dollar, or faith in a cosmetic makeover or reality show. It is the faith of our ancestors. It is the faith that is centered in the belief in the ever present and omnipresent spirit, and the knowledge that because of the strength of those who came before us we can use the lessons of our history that taught us to find a way made out of no way.

A significant part of that faith was grounded in regular usage of common sense and strategic planning. In order to get around, through, over or under whatever threatened them, our forebearers knew how to work out survival plans and tactics.

Without a plan, and an effective one at that, we will merely react to the evolving financial crisis using increasingly desperate measures as fear pushes us along. We will tend to try anything and listen to everybody. That’s not the pathway to sanity and survival. Rather, it is a recipe for disaster heaped upon disaster.

Step One
Write out a 30-day plan that drastically changes your over-all spending habits, which will include
– Cutting at least 25% of your monthly food expenses, focusing on the costs of eating out, expensive fast food, coffee shops, and restaurant use. For example, make your coffee and take it with you in a reusable container. Consider taking your lunch or part of your lunch to work at least 3 days of the week.
– Cutting clothes and shoe purchases by 75%. Here’s the measurement: If you own more than 10 pairs of shoes and 10 suits or outfits, make those do for the present. Avoid spur of the moment shopping sprees and sales for now. If you have children, make sure their basic underwear, socks, belts, and such are taken care of, but resist requests for name brand tennis shoes and other fads. Introduce your children to discount and generics and do without the big name and designer stuff.
– Finding 3-5 coupons/coupon services per week from newspapers, throw-away ads or other outlets to purchase toilet paper, paper towels, food, medicines, etc. This is a virtually free resource that we currently underuse.
– Balancing your monthly necessities with your regular luxury items (nail art, tattoos, dvd/video rentals, etc.) Reduce or eliminate what you don’t really need.

Step Two
Implement Step One and stick to it.
It is also crucially important to have a family meeting or a meeting with friends to ask for the support of anyone significant in your life. If they give their support, good, but if not, they now know what you will be doing to survive tough economic times, and you may end up being a role model for them.

TTT – Tough Times Tip: Do not make past due payments to a collection agency or a accounts receivable department of a merchant before getting agreement [a written statement is best] that the funds will be used to pay off your existing balance and not latefees or other penalties. Write on your check “to be applied to principal only”

Remember to get the employee ID number of each person you speak with at the beginning of the conversation and document the communication. If the person you are speaking with can’t provide what you need request a supervisor. If the supervisor can’t help, request a manager. You are gambling on the good will of the person to whom you are speaking, when you pay without a confirmation, that the money will be used for paying down your debt. That’s not a good bet and not one you can afford.

– Dr. B. J. Hawkins, President and CEO of OFSTM The Business Doctors, is a business growth and turnaround specialist. Recently re-elected to the Board of Los Angeles Forensic Expert Witness Association, Dr. Hawkins provides expert testimony and litigation support in complex business issues including partnership dissolution, corporate governance, supply chain, purchasing and business to business disputes.