It is very important for consumers to stay prepared in today’s uncertain economy. A couple months ago, economists were concerned about some defaults in a small portion of the economy. Now the problems have spread into the entire mortgage market, credit markets, and the larger overall economy. How far this problem goes remains to be seen, but there are some steps that you can take to protect yourself.

Pay down your debt
Debt that may not seem like much now can become troublesome when the economy turns. Home equity lines can try up, hours can be cut at work, and investments can underperform. Combined, these events can make paying off high-interest credit cards or other debts nearly impossible. If you need help, be sure to consult a credit counseling or debt negotiation service.

Postpone major purchases
Major purchases can cost a lot not only now but in the future. They can tighten your spare cash, lead to future payments (if on a payment plan), and can often lead to buyer’s remorse. Additionally, the US dollar is very weak right now and may mean higher prices for some foreign goods.

Bulk up savings and investments
Now is a great time to start saving money, max out your 401(k) contributions and setup a Roth IRA. This is especially true if your employer matches your contributions, as this is free money! Saving is best at banks like ING Direct that offer 4%+ interest rates. Also, be sure that your investments are diversified away from one or two companies. Blue chip companies that have strong growth overseas are the safest.

Make yourself valuable at work
One way to protect your job is to make yourself valuable at work. You should carefully analyze taking any available promotions or new work.  Joining a professional network or association to keep up to date with the latest trends and keeping professional contacts are the best way to do this.