What does the credit crisis means to you?

I bet there are many people out there reading the Appeal and wondering, "what is this credit crisis and what does it mean to me?"

As a person here in the Carson City area, should I be worried? Should I be doing something right now? Who should I listen to?

Let's face it, the news is giving all doom and gloom and your adviser may be saying now is a good time to buy. What is a person to believe since they all must have some sort of agenda?

I fully understand the lack of trust out there. Quite a bit is justifiable - having seen so many people whom we all thought we could rely on - cheat, lie and blame the other party.

Now, if you are like me, we can spend all of 2009 playing the blame game, but now is just the wrong time. Now we need to be smart, prudent, thrifty and cool-headed.

Given the absence of true leadership out there right now, I want to go over with you some of the basics that you should all be doing right now in order to survive this financial meltdown. Make no mistake, what is happening right now on the global markets is serious. What is happening here in the USA is very serious and, if handled badly, could put us into a prolonged recession. I cannot speak for everyone, but I sure would hate to see that happen.

Now all of you are in different stages in your lives that require different types of financial behavior. Because there is not enough space on this page to cover all of the life-stage issues, let's discuss the big things that may narrow in on most of your concerns. First, is my money safe in a bank anywhere? The simple answer is that banks can now insure deposits up to 250K per vesting in accounts so if your money is in a checking, savings or CD with those FDIC guarantees, you are OK.

Please do not keep money in uninsured accounts that are not in banks or other institutions just because they say that they will offer guarantees.

The guarantee must be through FDIC only or the U.S. Treasury markets. There are other bonds out there with insurance, so take them to your advisor or your bank to ensure that they are truly safe. All checking, savings and short-term money that you are going to buy something with should be in these very safe cash accounts.

Now is not the time to take the risk that stock will go up and you will be getting all of your original investment back real soon - if ever. Now, you need to think about your job, how safe it is if the economy really turns ugly? Are you prepared if you or your spouse suddenly becomes unemployed? If you are not prepared, you need a reserve fund that would pay from 6-9 months of your expenses so that you would not lose your home and other valuable things that you own.

I may stretch out the 6-9 month emergency fund, in an FDIC bank account, to perhaps as long as a year if you are in an industry that will be greatly impacted by a global slowdown.

I want you to be able to get a job before those reserves are gone.

Now, what else could derail your plan and send you into a tailspin? Inadequate insurance. The majority of bankruptcies are from medical charges - and not having health insurance is something that you cannot afford risk. Large costs from a major medical problem must now be worked out in bankruptcy court.

You could pay for years and years, so make sure that you keep coverage for the whole family at all times. There are many different plans, so you may be able to shop for better premiums and services, but do not let your health insurance lapse. If you are the major breadwinner, you need to consider disability insurance as well.

Next, what do you do about your house, your credit card bills, your planned vacations for the kids?

You are going to want to try to keep your home as things slow down even further and houses stay on the market far longer or sell for much less that you had anticipated. If you do not need to sell right now, don't sell. There will be a better market one day, I just do not know when.

Credit card bills need to be paid off as fast as you can. Once paid, cut them up or put them in a safe where you do not have daily access to them. Get used to the cash system and once that cash is gone, you stop spending until next payday.

Kids need to be a help around the house. If you are paying for services all over your home, it is now time to negotiate with your family about chores and possible allowance.

Christmas is coming soon, but do not go overboard. Now is the time to teach your kids about value and this lesson will be something that they can use for their own lives. Do not feel guilt just because you could not afford some big ticket item that no one would remember years later. What kids remember is that you were there for them and that you cared for and loved then. I doubt too many kids will have to go to therapy because of Christmas present distress.

It will make you feel better about yourself as well. No credit card bills coming due in January will feel sweet.

Now as for those vacations. You can still have a good time without going to exotic spots and spending money. Look locally and you might find the best vacation spot right here under your nose.

The best advice - calm down, do not let this crisis consume you.

I have this basket theory that I want to share with you. I mentally put things that I have control over in the first basket. Things like my behavior. Items that I may be able to influence the outcome go into the second basket. Then there is the giant third basket. Those are things that I have absolutely no control over.

Right now, what happens daily in the markets are in the third basket. Voting out those in Congress who allowed the regulations to be relaxed so that unscrupulous Wall Streeters could take advantage of all of us will go into the second basket. The first basket, well it is my attitude and how well I deal with this crisis that will be my true test of character.

My desire is to exact revenge on all those involved who got rich while the rest of us who played by the rules get screwed.

We live in a supposed civilized society, but there was nothing civilized about credit default swaps and collateralized debt obligations, was there?

• If I have not covered some concerns that you need an answer too, please e-mail you questions to editor@nevadaappeal.com.