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Strategies for Tough Times: Five Steps to Secure Your Financial Future By Jean Chatzky with reporting from Arielle Gowen
Read the newspapers, turn on the radio or television, and you'll get overwhelming evidence of something you probably already know: Times are tough. Unemployment is rising. Debt is rising. Credit is difficult to come by. And Americans are saving absolutely nothing. So what do you do? My philosophy in all sorts of tough times is to control the things you can control. You'll be surprised how much of a difference—both financially and emotionally—a few small moves will make.

Step 1: Build a Cushion 
Having an emergency fund to fall back on is going to help you sleep at night during the best of times, and in a shaky economy, it can be a real lifesaver, particularly if you lose your job. I usually suggest about three to six months of living expenses for a two-income family, and closer to six if you're single or your spouse doesn't work outside the home. In a downturn, you want to shoot for six no matter what your situation, particularly if you work in an industry that's likely to be hit hard—think financial services, real estate or retail. 

If that sounds like a lot of money, remember that we're talking about bare minimum living expenses here. If you're laid off, your spending is going to come to a screeching halt, meaning your emergency fund doesn't have to hold enough to cover your current lifestyle if it involves dining out every Friday night, a daily trip to the coffee shop and a family movie on Sundays. You just need to have enough to float the necessities: gas, bill payments and food. 

So where do you stash the cash? An emergency fund is all about liquidity, so you want to put it where you can get to it easily, but that doesn't mean you shouldn't earn some interest. Check out money market or high-interest savings accounts, particularly those that are housed exclusively online, then request an ATM card for easy access. But remember, this is for emergencies only, so no swinging by the bank on your way to the mall.

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