Poorer today? Don't do anything rash

By MP Dunleavey

Editor's note: Join columnist MP Dunleavey and a group of women as they seek to strip away the myths around money, liberate themselves from debt and find financial sanity. Follow the continuing quest of the Women in Red every other Wednesday in Dunleavey's column on MSN Money.

The stock market has been bucking around like a bronco, but that's not what's hard on most ordinary folks.

We're dealing with skyrocketing gas and oil bills, the downturn in our home values, the stupid credit crisis, the uncertain job market and the rise of something called the information economy. (I hope that means there will be some information about the economy real soon.)

Meanwhile, like most of you, my husband and I are just trying to figure out the smartest way to weather all these storms, stick to our financial goals for the year and not do anything too dumb by accident.

If you're a nervous Nellie like me, you're dealing with competing impulses:

• Bury head in sand. Do not, not, not look up. Throw mail in drawer. Avoid CNBC and anything that has a stock chart in it. Pray.

• Panic! Blindly try to take control of everything at once! Transfer, borrow and steal to pay off all debts now, now, now! Take on more work! Tell husband to get second job -- or better yet, start hedge fund! Wait, no, hedge funds bad!

But it turns out the worst thing you can do in a financially unpredictable climate is to do very much about it, let alone try to predict it.

First, do nothing

In fact, says Suzanna de Baca, president of Private Capital Solutions, an investment advisory firm in Des Moines, Iowa, "If you've had a sound long-term plan and good asset-allocation strategy for your investments or in your retirement account, just sit tight.

"Recognize that cycles exist, and try not to react to what the economy or the market may be doing."

The trouble, de Baca acknowledges, is that not everyone has made a long-term plan or thought about their asset allocation.

Heck, as good ol' Suze Orman just noted last week, the average Jane probably isn't opening her 401(k) statements.

If that's you, then let's all do a little Q1 financial self-analysis.

Not only is it time for me to take stock of my financial progress this quarter, this is an excellent time, de Baca advises, to get your own house cleaned up.

In other words, your survival strategy and mine isn't to get creative right now. It's to return to -- or stick with -- solid, sensible money moves that always pay off.

In an effort to get our financial picture where I want it to be, I have been keeping my nose pressed to the financial rule book -- and I'm seeing results.

Where our finances stand

	The end of 2007	Today
Consumer debt	$5,900	$2,900
Medical debt	$0	$1,800
Emergency fund	$2,100	$2,300
Long-term savings	$0	$900
Retirement	$17,400	$16,500
Home equity	$85,000	$79,000
Net worth	$98,600	$94,000

Continued: Sticking to our goals

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