Gas prices are as low as they have been in months, and there is a good chance that they will continue to plummet. Just a few months ago a gallon gas was $4 in most parts of the country. Fortunately, the national average is now below $2. While this is all well in good, the question you really need to answer is: are you using low gas prices to your advantage?

Everybody knows that the economy is bad. And perhaps the only good thing coming from this situation is lower gas prices. If you were paying $400/month for gas a few months ago you are probably paying closer to $200/month now. What are you doing with the difference? Since the economy is in a downturn and there is a lot of uncertainty it is important to put this extra money to good use. For example, you could save it in an emergency fund or quite possibly put it towards debt. No matter what, make sure you know how much money you are saving on gas as well as how to best use this extra cash.

Of course, just because gas prices are lower does not mean that you necessarily have to drive more. Instead, stick with the schedule you were following when prices were high. This will allow you to save more money, and if prices begin to increase once again you will not be in for a big shock.

All in all, low gas prices are something to be excited about. Make sure you are using this to your advantage from a financial standpoint.

Gone are the days when a good college degree was the key to an instant career. Looking into the future for those Americans who will graduate from college in 2009, the job prospects are not looking that rosy, according to a National Association of Colleges and Employers survey.

For a start, the number of graduates that employers expect to hire has fallen dramatically in the last months, and many will hire fewer than they did last year. On top of that, more and more students are graduating from college each year, so the job market in 2009 will start to be flooded with new graduates.

Starting salaries for new graduates are likely to be the same as last year or even lower, instead of the usual increase. Perks like signing bonuses that might have been around even during 2008 are unlikely to exist in 2009.

Of course, it depends on the industry. The survey suggests that graduates looking for employment in the finance, retail, manufacturing and construction sectors will be the hardest hit. But if you’re graduating to work in an area like accounting, public service, health care, education or technology, then there is still a reasonable demand for new graduates.

If you find yourself one of the unfortunate victims of the current recession and are laid off from your job, you’ll be wanting to try everything you can to find a new position. Gerri Willis has four main tips to help job hunters in the current market:

1. Network as much as you can. Apparently 80% of jobs are found through networking rather than answering job ads. That’s a huge proportion so get involved with professional organizations related to your industry and keep up social and business contacts.
2. Get online. Make sure you have a good online profile - several websites allow you to advertise your professional qualities for free and many recruiters will check you out there.
3. Be flexible. Be prepared to work part-time or on a short-term contract to get a foot in the door. If nothing else, do some volunteer work to get the contacts and the chance for a more permanent, paid position.
4. Be organized. Make sure you keep good records of which jobs you’ve applied for and where you’ve sent your resume, so that you can sound professional when they contact you or if you need to follow up. Also make sure that you have a well-organized, brief resume that is easy to read at a quick glance.

Having an emergency fund is a basic principle of personal financial management that many experts talk about. An emergency fund should be readily available cash that could cover living expenses for at least six months, and perhaps longer if you work in an industry where it may be difficult to find a new job or you are not eligible for unemployment benefits.

There was a nice story at the No Credit Needed blog recently about a guy who was laid off from his job - but had been smart enough to save up his emergency fund already. That means that instead of being totally panicked about the lay-off, he is calm and looking forward. One big advantage of having the emergency fund available is that he doesn’t have to scramble to get “just any” job - there’s a risk then that he might get trapped in a low-paying job without the flexibility of time to find a better job in his industry.

His story is encouraging and he wants to make sure everybody knows just how important it is to have an emergency fund, because you can never predict the future - except that now, you can predict that a larger number of people than usual will be losing their jobs, making the emergency fund even more vital.

Is your mind always at work when it comes to your finances? If so, you may find it difficult to decide when to save and when to splurge on something you really want. Unfortunately, if you make the wrong decision you could end up spending money you don’t have and/or finding yourself with no savings.

First things first, if you don’t have any money saved you should hold off on splurging. Simply put, you need to have an emergency fund above all else. This is a safety net that can come to your rescue should you lose your job, run into an unexpected expense, etc.

But I do have money in the bank? In this case you will have more to consider. Do you have enough money saved to be comfortable splurging? Only you can answer this question. Once you take a detailed look at your finances and what you want to purchase you should be able to answer this question and decide whether or not to save or splurge.

What are you splurging on? Obviously, there are some purchases that are smarter than others. If you are splurging on something you both want and need you may not have to do too much “self convincing.” But on the other hand, if you are splurging on something you can do without you may find yourself wondering if you should wait.

Deciding when to save and when to splurge is far from an exact science. The best thing you can do is know your financial situation, and act as responsibly as possible. It may not be fun to save your money but if you want to eventually splurge you need to have a large enough safety net to protect against potential issues in the future.

The recent share market plunges have had huge effects on retirees, or more particularly on the funds that should be funding their retirement. Money Magazine recently gave advice on how to deal with the sudden (and massive) drop in value your retirement portfolio may have sustained, particularly if you are already retired and needing to use this money to live on.

One important thing is not to panic and change your investment strategy out of stocks and into safe (but low yielding) funds - it’s too late for this to have a positive impact. Instead, you should focus on how you can live now on less and calculate how much you can safely withdraw from your retirement portfolio to live off while still having the best chance that your funds will not run out.

For example, if you’re fairly newly retired you should be calcuating that your funds need to last you for 30 years. Experts suggest that if you withdraw 4% of the total in the first year, and then a similar amount (but adjusted for inflation) every year thereafter, this fund should last 30 years. However, if the value has dropped dramatically, you should now recalculate the 4% value based on the current worth and that might mean making lifestyle changes like forgoing a vacation, getting part time work or selling assets.

Economic doom and gloom always has its up side and one is that a bunch of products that used to seem expensive have had some dramatic price falls either recently or over the last ten years. Check the list to see if any of the cheaper products are things that are also on your wish list:

• Toys: Over the entire last decade, toys have got cheaper and cheaper. One of the reasons, unfortunately, is that the quality is dropping, but often times that doesn’t really matter - a game is still a game.
• Clothing: Same applies for clothes - the quality might be lower at some discount clothing stores, but it’s often adequate for your needs and the prices are much, much lower.
• Cars: Not so many people are after a new car now - it’s one of the first things people stop buying when a credit crunch starts - but that means you can get some real bargains.
• Watches: Most people are buying watches that they don’t plan to wear forever - they know the quality will last a couple of years and that’s fine because by that time they’ll want a change. As a result, prices have been falling over the last decade.
• Electronic goods: Just as an example, computers cost almost 90% less than they did ten years ago. More competition and cheaper production possibilities - and now combined with an economic crisis where retailers have to slash prices to entice customers - mean there’s never been a better time to buy a new TV or computer.

Sticking to a budget can be as simple as following three basic personality traits, according to About.com’s Financial Planning site. They make it sound so easy - I know it’s not - but perhaps giving some thought to the three personality traits they describe could at least help you go further towards creating a budget and following it.

1. Have a positive attitude: This advice can apply for pretty much everything in life, but where budgeting is concerned, a positive attitude means focusing on the rewards that following a budget can bring. For example, focus on how happy being more financially secure will make you feel or the joy when you’ve completely paid off your credit card debt.
2. Remain motivated: When the will to stick to the budget starts to sag, consider giving yourself rewards for sticking to it or even increasing your goals. That is, give yourself a challenge to save an extra amount one month - sometimes setting yourself tougher goals for a short-term can motivate you by giving you a big success sooner than you’re expecting.
3. Have realistic expectations: Start with small “bite-sized” goals and short time frames - start the budgeting process step by step, rather than immediately striving for large lofty goals like “being debt free within two years”. Make your budget goals realistic and frequently reachable, then make some more.

While most of us are dreaming of extending our family house somehow - more bedrooms or an extra bathroom, usually - there are also a lot of advantages to be had from shrinking your home: that is, selling a larger house and buying something smaller. (more…)

Here’s a newsflash: it’s not all doom and gloom. In fact Rick Newman managed to come up with a pretty full list of ten blessings of these bad economic times; yes, there are positives you can see. Some of the highlights from this list include:

• Cheap prices on consumer goods: Fire sales of electronic goods like TVs and DVD players take place during these kinds of economic difficulties and if you’ve got some spare cash you can get huge bargains.
• Cheap cars too: Car dealers are finding it exceptionally hard to sell cars in this market, so if you’re ready to upgrade your car this is the time when you can get an excellent deal.
• And cheap stocks: When the stock market crashes, you can finally pick up some stocks for much lower prices - as long as you’re lucky enough to be left with some cash after the crash.
• Lower taxes: Depending on your own economic situation, you could be in for some significant tax cuts.
• Extra tasks at work: This might sound like a bad one - other workers get laid off and you have to pick up the slack - but on the positive side, it’s a great time to show that you are capable of doing a higher level job. Volunteer for some meaty tasks that would normally be outside your scope of duties and you might find yourself climbing the corporate ladder faster.