This is a guest post by Jonathan. He’s a Australian twenty-something student with a Diploma in Financial Services.
The sky has fallen, and a lot of us are in over our heads in debt and worry. But the recession doesn’t have to be a bad thing. Just as a company can emerge from a bankruptcy as a more stable, more efficient business, you too can use this economic downturn as a time to reflect on your finances and lifestyle and reinvent yourself for the better. After all, what doesn’t kill us will ultimately make us stronger. These tips will help you survive the tough times and come out smarter and stronger and ready to tackle the next bump in the road.
Survive: Eliminate Nonessentials. Cable TV, landlines, data plans on your cell phone, broadband Internet, movie theater tickets, fast food, takeout, top shelf liquor at the bar, soda pop and everything else you don’t need has got to go. Believe it or not, you can live without these things. It may feel like torture to go the whole day without your morning soy chai latte, but it’s better to sacrifice these mini-luxuries now than to have your heat shut off next December. Start living within your means now.
Thrive: Better Yourself. In addition to being expensive, much of our nonessential habits and expenditures happen to be mind-numbing and unhealthy to boot. Instead of spending hours in front of the TV, visit the library and get a book or plant vegetables in your own garden. Instead of grabbing a burger at the drive-thru, have a nice, healthy home-cooked meal with some friends. Instead of watching 30 second clips of cats watching TV on YouTube, go for a run, or a walk or do anything to get off your duff and on your feet. Replace the time-wasting money drains on your life with educational and inspirational activities that will make you feel better about yourself and keep your finances in the black.
Give and Receive Free Stuff
Survive: Make Do Without New. With an eye towards conservation as well as thriftiness, now is the most critical time to be resourceful and innovative. New clothes, new cars, new TVs and anything else shiny and expensive are luxuries that few can afford, and, in reality, luxuries that few should afford. Furniture, computers, textbooks and numerous other essentials can be obtained on the cheap if you buy them used. And because others are eager to turn their possessions into cash, you can often find excellent deals when shopping around on Craigslist  or eBay . You can also get items for free from services such as FreeCycle .
Thrive: Do it Yourself. Leaky faucet? Creaky door? Smelly carpet? Instead of paying a professional to come fix it, do it yourself. You’ll learn a new skill and save a substantial amount of money. If you are unsure where to begin, ask a friend to help or give you some pointers. You can also visit your library for books on home improvement and simple repairs. You can often rent any special tools needed or borrow them from a neighbor. Once you fix one thing in your house, you’ll likely be inspired to check off more of those items on the “Honey-Do” list. Maybe you’ll even increase the value of your home while you’re at it.
Clean Up Your Balance Sheet
Survive: Tackle Your Debt. Interest payments, late fees  and dings to your credit rating are a vampire on your present and future finances. A solid debt reduction plan is a stake to the heart of the forces that are systematically draining your capital. Depending on your situation, you may need to consider debt counseling or debt consolidation . If you aren’t in too awfully deep, though, you can begin chipping away at your debt with a solid plan of action (consider the debt snowball method) and a newfound resolve. Pay down high interest debt first, don’t let any payments go delinquent and don’t rack up any more debt along the way.
Thrive: Build Your Emergency Fund. If you have your debt under control, the next step is to create a backup plan  so you can avoid going into debt again. In these times, a bit of extra money to squirrel away seems like a vast luxury. But by cutting back on some of your discretionary spending – a coffee a day, a night out at the movies, a new electronic gadget – you can begin building up a solid cushion. Of course, don’t even think about stashing money in a savings account until you’ve paid down all your high interest debt. As long as the interest rate on your loans is higher than the interest rate on your savings account, CD or bonds, then you’re wasting your time.
Take This Job and
Thank Your Lucky Stars Shove It
Survive: Keep Your Job, or At Least Keep In Touch. Now’s not the time to be picky. Bankruptcy  looms everywhere. With the economic stress worldwide, your job may become especially taxing and your superiors may become increasingly irksome. But now’s not the time to complain or drag your feet. Be a team player and pitch in a little extra to help the company get through these rough times, even if there are no immediate rewards. Because in the end, the grand prize may ultimately be your job. If you do get the pink slip, don’t make yourself a victim. Being laid off is better than being fired – take the termination with class, thank your employer for the opportunity and stay in touch. Ask if there is anything you can do to help in the meantime, even though you won’t be employed and when things turn around, you’ll be at the top of their list to call back.
Thrive: Rise Above the Chaff. If you were lucky enough to survive the last round of layoffs, now’s the time to shine. Your company’s workforce is now much leaner and with so many vital positions cut, there will be ample opportunity for you to rise to the occasion. Pick up the slack where your fallen colleagues  have left off and make your boss glad that he chose to keep you around. Your willingness to tackle extra responsibility will make you indispensable if the ax falls again, and will make you a shining star when it comes time for promotions.
Hedge Your Bets with a Paying Hobby
Survive: Hone a New Marketable Skill. You never know when your main source of income will disappear. Take the time now to expand your marketable skills in case you have to start updating your resume. To make it relevant, take a class or a pickup a book that can apply to your current job or hobby. That way you can justify the time commitment in the near term as well as appreciate the skills you’ve gained in the long run.
Thrive: Start a Side Business. Turn your hobby into cash by starting a side business. You’ll find it fulfilling as well as fiscally rewarding and you’ll have some extra income to fall back on if things go south with your main gig. Enjoy writing? Start freelancing  for web and print publications or start a blog . Into crafts and collectibles? Start an eBay business . Good with computers? Start a computer consulting business. By monetizing something you enjoy, you may also be launching the career of your dreams in the process.
Keep Your Head Up
Lastly, it’s important to keep your head up. Count your blessings if you have them (and you most certainly do) and don’t despair. If you feel like you’re at the end of your rope, talk to someone. You may discover that you’re not alone and you may find inspiration and ideas where you never thought to look for them. An economic downturn – whether global or personal – will be the end of rampant spending and living beyond your means. But it isn’t the end of the world. Stay strong, stay diligent, and you’ll emerge as a savvier consumer and a happier person.