Created: 03/20/2009 8:00 AM KSTP.com | Print Story By: Nicole Muehlhausen, Web Producer

BARRON: Simple strategies can keep you recession-proof

 Midwest bankers see bright spots in economy

With Minnesota’s unemployment rate now above the eight-percent mark, many people are worried about the security of their jobs. Now it’s more important than ever to protect yourself financially in case you are laid off.

That may be easier said than done—especially if you're also trying to pay off credit cards and other debt. But one Metro man has a few strategies that are working for him and may for you.

George Maldanado, of Maple Grove, is a single father of two who wants to sleep better at night by knowing he could survive even if he lost his job.

"Everything I can do to plan for whatever might happen in the future—cut back now increasing liquidity," Maldanado said.

Edina financial planner Greg Ferguson says you need to have a cash reserve and recommends having a three to six month cash reserve.

"That's a first priority, if that means carrying a balance on cards," Ferguson said.

That doesn't mean suspending credit card payments. If you don't have a three to six month emergency cash reserve, it won't help if you are trying to quickly pay off those low interest cards.

Ferguson’s advice is to pay the minimum monthly payments during the recession, and start socking away whatever money you have left over.

On the other hand, if you do have a reserve of emergency money, it would be a good idea to pay down the cards with highest interest rates.

"If I was working at the Ford plant in St. Paul, I would be re-thinking what I was paying trying to build the biggest chunk of liquid money—CD's, money markets, all the safe highly liquid things," Ferguson explained.

That means you must know and track your finances—knowing exactly how much you're spending every month, and cutting back is similar to what businesses undergo when looking to trim their budgets.

For Maldanado, he realized he was spending too much money on things that weren't essential.

"It’s organization it's getting into the mindset I have a plan," he said about deciding to just start cutting expenses across the board.

Even if it means buying the less expensive brand of his favorite beverage, Maldanado says he saves about a dollar for each bottle of tea.

"You can sleep better at night, but if the unthinkable happens, you're not homeless or left without a way to provide food," Maldanado said.

Many banks and credit card companies now break down how much you spend a month at places like restaurants, grocery stores, and coffee shops.

Even if you can find just $25 to cut each week, that can save you $1,300 a year.