2010 goal: My own economic recovery

By MP Dunleavey

There's no question that 2009 will go down in my personal history book as one of the worst financial years ever:

• I lost two freelance jobs, and a third one was cut by 50%.
• Our chimney repair morphed into a complete rebuild.
• Our car died, and we had to buy a replacement.
• We've basically emptied our emergency fund. (Please, no more emergencies for a while!)
• An old medical bill resurfaced -- in collections! -- and my credit scores sank to an all-time low of about 640. (True story: When we applied for our car loan, the lender ran my husband's pristine credit report, then mine. He said, "You know, I've never seen a spread quite like this.")

It's not like I wanted to take stock of my current financial predicament -- I mean situation. I don't know about you, but I've spent the past 12 months crying in a corner.

I don't want to take stock of anything, I told my cigar-chomping editor. He blew smoke in my face and said there were 12,000 out-of-work reporters salivating after my job and that I'd better do it.

OK, OK! I guess you can't engineer a personal economic recovery in 2010 if you don't know where you stand. So:

• From a high of almost $7,000, our emergency fund is down to $321.46.
• We have $20,575 in retirement funds, up from a low of about $12,000 last year. Phew!
  

  How to assess your personal finances

• The equity in our home and rental property has dropped to about $50,000 combined from about $75,000. There is little sign that real-estate values in our area will recover anytime soon. (See what your home is worth.)
• I owe about $925 on my business credit card -- temporary debt that I'll erase when an incoming freelance check arrives. Still, it's depressing.

Worst of all, with my income wobbling, I broke the cardinal rule of financial planning last summer and halted our retirement savings. (I wasn't alone. Although 95% of Americans kept contributing to their retirement plans in 2009, according to the Investment Company Institute, a survey by Deloitte indicated that 38% of 401k participants had reduced their contributions.)

Then, in the fall, I dropped our personal savings from $680 per month to just $75.

I seriously considered going back to school to become a nurse. Unlike the faltering field of journalism, nursing is almost recession-proof. And I'm not squeamish around gunshot wounds. (This is not a rare impulse: Dozens of nursing programs around the country are reporting double and triple the number of applicants.)

Dreams of drawing blood aside, I decided it's smarter and less time-consuming to rebuild what I have. And then some light appeared at the end of the tunnel.

Money materializes

My husband was rehired for the spring semester at the college where he has been teaching, which means his paycheck -- and our medical and dental benefits -- will continue!

And, making up for losing a disturbing amount of work in 2009, I just started a part-time gig as editorial director of DailyWorth, a Web site that offers fun personal-finance e-mails for women.

Not only does this iron out a major wrinkle in my cash flow, but there's exciting potential for collaboration with the Women in Red. (This month, the Women in Red Savers will share their best savings tips with DailyWorth readers, who have just embarked on Save Up, a 12-month boost-your-net-worth campaign.)

What does all this mean? It means that it's time to restore order out of my current financial rubble. Right now.

Continued: On the road back to saving

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