Not a day passes without headline news about the economy.   How do we navigate through the myriad of news reports such as, the government’s proposals to reduce the deficit, the unemployment numbers, or the Federal Reserve’s take on our country’s recovery?  Most Americans are faced with increases in their day-to-day expenses, home /automobile repairs, and health care costs.   I have a few tips that may help you deal with the current economy.  I refer to it as Financial Fit-ness .  To begin your Financial Fit-ness regime consider the following:

• Cash Flow - List your income and expenses by month.  Be sure to include yearly expenses such as insurance, water, etc. and divide the total by 12 so you know how much you need to put to one side each month towards that expense. Use all of the information to design a Cash Flow Statement.  Income is added and expenses are deducted.  You can track this quite simply with available programs (such as Quickbooks).

•  Savings Account – establish an emergency fund.  Six months total spending on hand in a separate account is ideal.

• Evaluating Expenses -Identify ways to trim expenses.  This will free up some cash that can be added to your savings.  Generally the easiest areas to reduce are food, clothing and entertainment.

• Consumer Savings  - Comparative shop for everything.  Today it is easy enough to do research right on line for appliances and services but do not hesitate to call your cable, electric and phone companies directly to inquire about specials or reduced rates.

• Cash is Queen – do not make a purchase unless you can pay cash for it.  Water heaters and unexpected repairs are a different story but do not book that trip or buy that luxury car unless you have saved for it first.  Do not sabotage your Cash Flow Statement by increasing your expenses unnecessarily.

By putting these tips into practice and by simply monitoring your Cash Flow Statement regularly you will have more control and awareness of your financial picture.

Financial Fit-ness is another way to ….

plan now to prosper later.

By Barbara Case

Barbara Case is the Senior Vice President of Investments at Moors & Cabot Investments in Boston. Honored as a South Shore Woman of the Month--- for always giving back--- Barbara is now giving advice to the SSW community in her new financial column.

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