Up until today, Moneywise has refrained from harping and lecturing about the severity 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 radio, the bad news is that hard times may be coming. Along with the 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.

This has actually been a good thing for Moneywise; no one really wants to listen to the bearer of bad news, sometimes it feels so much better to hope that things will stay the same. After all change is hard, and adapting to change is even harder.

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, the last one being 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. Readers, the secret is in the spending of the small stuff.

The bottom line is: Know exactly what you need (not want) to survive on, month by month.

Subtract that from your net monthly 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, look again at what you are spending. Decide now to lop at least ten percent off where you can. No, there is no way you can reduce your rent by ten percent, if you are struggling with debts, you need to talk to your personal lender.

Reduce: No one said stop spending, just reduce consumption and look for value before you buy, spend smart.

Presents: Cut your Christmas list by a third, dollar wise or 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.

Hair: Stretch out the cuts by picking a simpler style, and accentuate your face, be less fashionable rather than having less money.

Nails: Stretch the time between to three weeks.

Clothes: wash and hang outside, drying costs $3 every load - purchase one good quality outfit, instead of three, you don't need a new outfit every day - purchase washable where possible, rather than dry clean only. At $20 for a suit, you have to be a very, very tidy person all the time.

Food: Buy cheaper cuts of meat. Buy less, eat less of it, you don't need more than 4 ounces of protein a day.

Use cheap protein alternatives, cottage cheese, cheddar cheese (we called it rat cheese, a holdover name from our childhood). Learn how to make baking powder biscuits, add dry powdered milk, eggs, and small chunks of rat cheese, along with simple soup, plenty nourishing for one meal (my mother's food stretchers, another holdover from our childhood) I'll send you the recipe, they are better than Crow Lane, by far.

Soda: $5 a pack adds up, our own children swilled a six-pack each, when they thought no one was looking. Try water. Drinking soda does not pay the rent. Besides, the phosphates leach calcium from your bones and the constant excess sugar in so many food items can cause onset diabetes.

Prescriptions: Ask your doctor for the generic brand. If you are paying the entire drug bill yourself, this is a savings.

Lunch out every day: Cut back to twice a week.

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? Caffe Latte: Same thing, you still need to treat yourself occasionally, but not every day.

Cell phones are dangerous! Use email or your regular phone.

To make the picture clearer, it almost is never big items that cause financial problems, it is the constant drip of money going out every single day. Suddenly, no money for rent or the utility bill or the mortgage.

Pay attention to every dollar spent. Ask, do I need this every time, before you buy? If you are stressed about the events of the last few weeks, look around, so is just about everyone else (well, a few won't be, but that is not your concern).

Treat your self 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.

I think you get the picture, there have been books written on the subject of budgeting and money management, but listing the cost of all the small stuff will shock you.

In Bermuda, you can easily drop $30 a day on 'small stuff'. Add that up, yes, a whopping $600 a month, not so small now, is it? REUSE AND RECYCLE: Why can't you get another year out of that raincoat? Use mason jars for leftovers, not expensive Tupperware plastic, save your plastic shopping bags, swap children's toys with friends, everyone gets new things to play with.

Chicken Little said "The sky is falling, the sky is falling".

Right here on our island, there are plenty of chickens. For those determined souls, a little chicken wire and a few in your own backyard can become volunteers for your fresh egg breakfasts. I am serious, this has been done (in our family) and it can be done.

Where else can you get a free lunch? Chickens are great for recycling food scraps and nourishing a garden patch. Less mess for our brave road crews to clean up off the road, too.

Books: Second hand stores, the savings are great. Why do you need that bigger TV? or stereo? Better to save for a computer that brings knowledge into your living room.

REJUVENATE: furniture with paint, save old skirts, blouses, and dresses, men's shirts. Cut into squares, sew together into a plain square quilt and presto, a bedspread of memories.

Try your hand at making pictures from fabric, sew or glue to an old shirt (cut up) background, wall art. Get the family to add to it. Oh, my, she has got to be kidding, think you. No, readers, am I not, Master Artist appliqu? wall hangings today go for thousands of dollars, and old quilts fetch a fortune.

You realise what you are doing here? In spite of adversity, you are creating family history! It is good for your soul, very good for family spirit. Bet you can't do it, you just can't.

Make some children's toys from old corduroy or denim. Stuff them with old T-shirts and old towels. I challenge you to make one without spending a cent. Does this sound like a sewing machine man's daughter? You bet. Everyone in our family learned how to sew, three boys and four girls.

Don't know how to sew? Learn. Talk to your granny, great auntie, they have infinite knowledge, and wisdom, they'd love to share their skills.

Gentlemen, now is the time to take scrap wood and put together that tree house, pirate boat or anything else that takes your fancy for your children. Pick up some of the wooden pallets thrown in the trash, and make a compost heap. It won't take long to start a little garden.

REVITALIZE: Yourself. Cut back on cell phone chatting, watching TV and get out and walk. Spend that time plotting ideas on further reduction in unnecessary consumption. You very often get the best ideas during exercise and you will feel better. REJOICE: That you are still here.

WHO'S YOUR FAMILY? Feeling intimidated and less than.

RESOURCEFUL: Guess who you need to talk to - your elders! They are the largest resource you have, you think it was easy for them when times got tough? You think this is the first recession this island has been through? You think it is tough for you? Get to know your granny and gramps, they can tell you some tales and listen to what they have to say. They know better than anyone how to stretch a dollar.

Your grannie fit the description "Necessity is the mother of invention". Back then, no clear career path, no redundancy pay, no medical insurance, no Financial Assistance, no contingency plan, except their small community and in so many instances, their strong faith.

Your grandparents are some of the toughest people on earth, living here, in the fourth most remote spot in the world. Yet, they survived, with great dignity, perseverance, common sense and a sense of humour. Use them as role models, let them help you, listen to what they have to say, be like them, and you'll be all right.

Think of this exercise as a real opportunity to save for the future. Who really knows what the future may bring? If Bermuda sails through yet another storm and survives, you could end up with a nice little nest egg you never had before. And knowing that you have put that money aside is a very comforting feeling. Good for you.

Related websites: www.tightwadmoms.com

www.frugallinving.com

www.simpleliving.com

www.simplelife.com

www.wholeearthmag.com

www.thefamily.com/budget

www.ourfamilyplace.com (US), is a Bermudian Certified Financial Planner practitioner and holder of the NASD Series 7 license. She is Education Director for the Financial Planning Association of Bermuda (FPAB).

2001 - The Bermudian Bermuda Gold Award for Best In Bermuda Investing Advice.

The opinions in this column are the author's alone and are not endorsed by any organisation. Under no circumstances are the comments in this column to be taken as specific recommendations on the purchase or sale of securities or any other investment. She does not hold any specific investments in Ace Limited.