If there's a lesson to be learned about the economy, it's that you can't fully steer your financial planning the way the winds are blowing because they can change direction in an instant.
A few weeks ago, economic experts were worried that the nation's housing market ills could drag the broader economy into a full-blown recession - a broad-based, persistent and substantial decline in economic activity.
But thanks to an aggressive interest-rate cut by the Federal Reserve in September and again this past week, plus more comforting economic data, the loud warnings about a recession have subsided somewhat.
Still, there's a lot of economic uncertainty out there, and consumers need to steel their personal finances just in case the slowing economy brings nasty surprises.
So what should consumers do?
¢ Make sure your investments are well diversified and stay focused on your long-term goals.
"People should be more cautious in their spending, saving and borrowing," said Mark Zandi, chief economist at Moody's Economy.com, a research and consulting firm. "I don't think it prudent for most households to change their investment decisions, save to underweight housing during this period."
¢ Pay down or pay off debt - especially high-cost, non-tax-deductible debt.
"If a recession hits, the last thing you need is no money and a big credit card bill," said Rande Spiegelman, vice president of financial planning at the Charles Schwab Center for Financial Research.
There's a big incentive for getting rid of credit card debt.
Paying off a credit card that has an 18 percent annual rate is the same as getting a guaranteed rate of return of 18 percent.
¢ Bulk up on your savings.
In addition to building cash reserves, be sure you max out your contributions to your 401(k), especially if your employer matches your contribution.
But in order to save, you must have your budget in line so you have extra money you can put away.
"Approach your budget like you are a corporate downsize specialist," said Natalie Michalek, a certified financial planner at JWA Financial Group Inc. in Dallas. "In a two-income family, have two budgets in place: the comfortable one and the uncomfortable one, and have concrete steps in place to execute if needed."
Your "comfortable" budget is the one that allows for the extras like eating out, lawn service, Christmas gifts and vacations, she said.
The "uncomfortable" one involves cutting down to basics, with maybe just one splurge category.
¢ Reconsider making large purchases.
"If you are planning for a discretionary purchase such as landscaping, new floors, etc., consider postponing those big-ticket items," said Bryan Clintsman, a certified financial planner at Clintsman Financial Planning in Southlake.
¢ Protect the source of your income - your job - by making yourself more valuable to your employer.
Join a professional network or association to stay up to date on the latest trends in your industry and maintain professional contacts.
The end of the year is always a precarious time for workers as companies scramble to meet annual earnings goals, said John A. Challenger, chief executive of Challenger, Gray & Christmas, an outplacement firm.
Troubles in the housing market could spread to other areas of the economy and ignite a job-cutting spree, Challenger said.
He offered tips on how to become a valued employee:
¢ Find ways to save your company money.
"If you can figure out a way to accomplish work in less time while maintaining output of the same or better quality, you will be making a significant contribution to profitability," he said.
¢ Become a problem solver.
"Increase your recognition as a problem solver by requesting difficult assignments," Challenger said. "Individuals who gear their work lives in this direction can help make themselves untouchable during a downsizing or reorganization."