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Friday focus: Personal finance

No doubt many consumers will be happy to say farewell to 2008 with its record home foreclosures, massive job losses and weak credit market.

However, there are some valuable lessons we should take with us into the New Year if we are to weather the remainder of this turbulent economic climate.

Some of those lessons came as many people have felt their financial security blanket slip from underneath them with home values dropping and credit lines decreasing or going away altogether. To cope, they fell back on some tried and true consumer tools: saving more, spending less and shopping smarter.

“Debt Diva” Clarky Davis, a professional credit counselor and finance expert based in Raleigh, N.C., offers some basic tips to help stabilize our finances in 2009:

•Make your finances a priority. You may have spent more during the holidays, so the New Year is the perfect time to make a change.

•Stay calm and don’t make any major financial moves like cashing out your 401(k). The recession has been here since December of 2007, so there is no need to panic.

•Re-evaluate your spending habits. Go through your last six months of bank statements. Do this every two months in 2009 to make sure you stay on track.

•Build a monthly budget and set financial goals by creating a plan to stay on track.

•Create a lifestyle that fits your budget. Find ways to cut back where you can. For example, trim your cable package, turn down the thermostat and reduce your dining out.

•Pay with cash. Stop using credit cards and live a cash-only lifestyle.

•Find a part-time job to make extra money.

•Pay down debt. Make it a priority to pay down credit card debt. The longer you keep a balance on your credit card, the more money you are losing.

•Start an emergency savings fund. Start small and build the reserve as backup when you are faced with unexpected expenses such as health emergencies or necessary car repairs.

•Keep your spirits up. Don’t look at these changes as deprivations, but as powerful steps you are taking to get your finances in order.

As you head into 2009, keep a positive attitude. More than likely, we have weathered the worst of this economic storm. But certainly the lessons we have learned in the past year will help us long after this recession ends.