The sky has not fallen yet. Moneywise has refrained from lecturing about the seriousness of the changes in our economy. I really didn’t have to, since so many other very concerned citizens have already done so. In fact, almost every time you pick up any paper or listen to the talk shows, the bad news is that hard times are here. Along with the very gloomy warnings is the usual verbiage on how much better everyone handled things in the ‘good old days’.That may be, but that was then and this is now. In my book, running into financial distress puts you in the same predicament no matter when it is, if you don’t plan for the future. We are after all creatures of habit, and habits, particularly squandering rewarding-ourselves habits, are hard to break.The good news is you still have time to plan ahead and get a grip on your own personal finances....... and the time to start is right now, before you hit the wall!Here are some strategies, Research, Reduce, Reuse, Recycle, Revitalise, Raise Revenue, Rejoice, and the last one being sincere Relief once you figure out what your contingency plan will be.Research your current finances The very first thing is to stop using your credit card! The next thing you must do is calculate all of your expenses, by the month. If that is unclear, you may have to list everything you spend, every day for a couple of weeks.The bottom line is: know exactly what you need (not want) to survive on, month by month. Subtract that from your net monthly take home pay (income), anything left? Yes? Save it, don’t think about touching that money for three months. Don’t have a bank account? Get one opened. Money under the mattress too easily slips away.No, nothing left to save, look again at what you are spending. Decide now to lop a large percentage in every category you can.Reduce no one said stop spending, just reduce consumption and look for value before you buy, spend smart.l Presents Cut your Christmas list dollar wise and size wise. No one will mind a smaller gift. They should be thankful to get anything from you. Buy early while stores are offering discounts.l Hair stretch out the cuts by picking a simpler style to accentuate your face, be less fashionable rather than having less money.l Nails stretch the time between visits or do it yourself.l Clothes wash and hang outside, drying costs $3-$5 every load.l Purchase one good quality outfit, instead of three, you don’t need a new outfit every day.l Purchase washable where possible, rather than dry clean only at $30 for a suit, you have to be a very, very tidy person all the time.l Food- Buy less, eat less of it, you don’t need more than four ounces of protein a day.- Use cheap protein alternatives, cottage cheese, cheddar cheese sparingly, beans, dry milk.- Learn how to cook. An inexpensive pasta sauce and spaghetti, make biscuits along with simple soup, plenty nourishing for one meal (my mother’s food stretchers, another holdover from our childhood) there are thousands of frugal recipes.- Drink free water, not soda. Besides, the phosphates leach calcium from your bones and the constant excess sugar in so many food items can cause the onset of diabetes.l Prescriptions ask your doctor for the generic brand and shop the same way for over the counter medications.l Bring your lunch to work. Eat out once a week or even less.l Snacks do you really need them? Ever figure out what a bag of chips or chocolates really costs PER POUND? In some cases more than steak. What is better for you?l Cafe Latte, cappuccino same thing, you still need to treat yourself occasionally, but minimise.l Cell phones are expensive time wasters. Use phone cards, keep your data roaming turned off when not in use. Ditto limit use of text.l Rent There may be less expensive apartments that will work for you. If you are struggling with debts, you need to talk to your personal lender or a debt counsellor.l Mortgage payment shortfall. You must talk to your mortgage officer.l Arrange to talk to your Bermuda National pension administrator about an emergency hardship cash infusion from your pension, if you have one.l Parking the bus, the bus or down grade to a bike. Yes, the traffic is awful. The decision is a tough one: economise or safety.Readers, the secret is in the spending of the small stuff. It is almost never the big items that cause financial problems, it is the constant drip of money going out every single day. Listing the cost of all the small stuff will shock you. In Bermuda, you can easily drop $40 a working day on ‘small stuff’. Add that up, yes, a whopping $800 a month, not so small now, is it?Suddenly, no money for rent or the utility bill or the mortgage, or the car repairs. Pay attention to every dollar spent. Ask, do I need this every time, before you buy?If you are stressed about the state of our economy, look around, so is just about everyone else (well, a few won’t be, but that is not your concern).Treat yourself (and your family) just like a business. Most businesses don’t stay in business long if they don’t make a profit. Your profit is your savings for your future.Stay tuned for part 2.Martha Myron, JP CPA CFP (US) TEP is an international Certified Financial Planner™ practitioner in private wealth management. She specialises in independent fee-only cross border investment, tax, estate, and strategic retirement planning services for Bermuda residents with United States and multi-national connections, and US citizens living and working abroad. She is a Masters in Law candidate in International Tax and Financial Planning and the Bermuda country contact at the American Citizens Abroad Tax Advisory Council (www.americansabroad.org). For more information contact mmyron[AT]patterson-partners.com or 296-3528 at Patterson Partners Ltd.