Surviving a Slowdown: What You Can Do Now

By Barbara Kiviat

YOUR JOB: Learn to earn. In a 21st century recession, the jobs lost during the downturn aren't necessarily the same ones that appear during the rebound, so be ready for a career switch. Fast-growing fields include health care, postsecondary education and systems analysis. You might also aim for companies that do business in the public sector. "Governments play a counter-cyclical role at a time like this," says Jared Bernstein of the Economic Policy Institute.

YOUR INVESTMENTS: Prepare a shopping list. January's stock swoon may have been unsettling, but it's no reason for panic. "Someone walked up to me and asked if he should put everything in cash," says Nicholas Nicolette, principal at Sterling Financial Planning. "That was an emotional reaction." Instead, use this time to cherry-pick overlooked, undervalued stocks. "For the well-prepared investors, these down moves provide opportunities," says Jeffrey Saut, chief investment strategist at Raymond James Financial. Just make sure to go bargain-shopping within the confines of a calm-headed, long-term strategy.

YOUR HOME: Go hunting. The number of homes sold is down--probably 13% for all of 2007--but if you're on the buying end, you might have some luck. That's especially true in light of interest-rate cuts; the average 30-year mortgage now goes for 5.57%, according to Bankrate.com near historic lows. Mark Johannessen, managing director at the asset-management firm Harris SBSB, says to consider refinancing if you can save more than half a point. And if you're in an ARM, think about moving to a fixed-rate for peace of mind in an economically uncertain time.

YOUR SPENDING: Save that rebate. President Bush has proposed a relief package worth about $145 billion to juice consumer spending. If you get a check, financial planners recommend first paying down any high-interest debt, like credit cards. After that, it's smartest to save the money--in a tax-deferred account like an IRA, if you can. That may not be what the government is going for, but if we do slip into a recession, you might need the cushion.