Chart a Road Map to Weather Rocky Times

By Michelle Singletary
Thursday, October 2, 2008

In the 1950 movie "All About Eve," actress Bette Davis slyly uttered a memorable line: "Fasten your seat belts. It's going to be a bumpy night."

She might as well have been talking to today's investors.

Except in this case, the bumpiness is probably going to last far longer than just a night.

But I have to say I am not at all afraid of this ride -- even after the gargantuan recent drop in the Dow Jones industrial average. I didn't panic when the House of Representatives failed to pass the proposed $700 billion bailout. The president and some leaders from both political parties are essentially saying that we -- the people -- are fools for not seeing the wisdom of sinking our country further into debt to free up the credit markets.

At least for individual consumers, I'm not mourning the reduced access to credit. Good.

People were borrowing too much anyway. For example, an increasing number of automobile buyers have for years been rolling over debt from previous cars into new car loans. How long did we think that could go on? How long did individuals or companies think they could borrow their way to prosperity?

Not forever, it turns out.

So, what now?

Well, in spite of all the predictions of Armageddon, you can still make it through this financial crisis. However, Thomas J. Geraghty Jr., a certified public accountant and financial planner, says having a road map for your finances is the best way to get ready for this bumpy ride.

"If you are prepared and expect the bumps, you can ride this out," said Geraghty, who is a partner at New Jersey-based Stonegate Wealth Management.

Let's start with a road map for people in their 20s. Geraghty, who has three adult children in that age group, said young adults should focus on establishing good money habits during these turbulent times. In fact, he suggests that 20-somethings not worry about investing if they have credit card debt or student loans.

"You've got to get those paid off," he said.

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