Top Five Tips For Surviving A Down Economy

Following a few easy steps can help keep your head above water during tough financial times.

Even though we can't control when the economy goes into recession, dipping home prices or gas prices increasing, we can decide how we spend, save and invest our money. It's more important now than ever to make the right financial moves, so that regardless of what's going on with the economy, you're able to stay on top of your financial situation. MSN Money personal finance editor Liz Pulliam Weston offers the following advice to help you stay afloat during these tough economic times:

• Don't confuse your needs and wants. We have fewer needs (shelter, food, clothes, etc.) than wants (endless). Figuring out what we really need and how to get it for less can really help get finances in check. If you find yourself saying "I need a (whatever)," stop for a second and consider whether you really do. You probably don't have to live without it forever, but wait until you're in a comfortable enough financial situation before purchasing.

• Getting the big stuff right. If your mortgage or rent payment eats up much more than 30 percent of your gross income or your vehicle costs you more than 10 percent (including financing, repairs and gas), you're probably overspending on the "big stuff" in your life. Try using the Home Affordability Calculator on MSN Money to get a realistic look at what's truly manageable.

• Get out of debt. Whether you meant to do it or not, there's no excuse for carrying credit card debt. It costs you a ton of money in interest and puts you at the mercy of the credit card companies. If you can't pay your bill in full, it's time to put that card away. Pay over the minimum and plan to pay it off entirely before using any of your credit cards again.

• Track your spending. It's not the most fun, but keep track of every nickel you spend for at least two weeks. You'll learn why and how your money is disappearing. Once you can see where your money is going, you can find ways to keep more of it in your pocket.

• Set up an emergency fund. A $500 cushion is something that just about everyone can come up with and it can really be a lifesaver. You never know what can happen tomorrow, and having some savings set aside will help keep you from going further into credit card debt or searching for high-interest alternatives such as payday loans.