2009...a lot like 2008, only worse.

SavvyFrugality — Fri, 09 Jan 2009 04:05:00 GMT

The New Year is always an exciting time. As we count down the seconds until midnight, we look forward to a fresh start, new and exciting challenges and the opportunity to improve ourselves, either by losing weight or quitting smoking. This year, many are hoping that the New Year will bring with it economic recovery and prosperity.

Unfortunately, they will have to wait awhile longer.

All signs are pointing to a more prolonged and deeper recession than anyone had initially thought. It's not that I have a crystal ball or anything. I'm just listening to what the people who are running the economy (or will be running the economy) are saying. Other signs point to a stale economy in the year ahead:

President-elect Barak Obama - says the U.S. recession could drag on for "years" without bold economic reforms.

Boston Federal Reserve Bank President Eric Rosengren - says the recession will be longer and more severe than originally forecast.

The U.S. Chamber of Commerce -says the U.S. will "hit bottom" in mid-2009.

Retailers - High-end department store Macy's is closing a number of stores around the country. Circuit City, Linens 'n Things, and KB Toys have filed for bankruptcy.

Things aren't all bad. For example, Rosengren also said he feels the U.S. economy will probably start to rebound in the second half of 2009. Historically, recessions in the U.S. haven't lasted much more than two years at a time. Of course, there is always a first time for everything. The U.S. economy didn't get into this bind overnight, and it will take time to recover.

As for me, I have a few resolutions for this New Year:

Save, save, save - All of my discretionary funds are going into my savings account.

Investing - Stocks are on sale right now, if you've got the stomach for it. Personally, I'm sticking my cash in savings accounts and CDs. My stock purchases are limited to companies that I'm fairly certain will still be around after the economy rebounds, but I admit I haven't been putting as much into my ING Sharebuilder account as I used to.

Shopping locally - This is just a personal choice for me, but when I do have to make purchases I'll do my best to buy from small, "mom-and-pop" retailers in my local area. The strong "big box" stores will survive the recession, but small businesses are the backbone of our communities. They need all the help they can get.

Dumping my debt - Money that isn't going to savings is going to retiring as much debt as possible this year. I won't be totally debt-free in 2009....I'm still paying off my mini-van and a student loan...but I'll be doing my best to get rid of all other debt. Not owing anyone any money is a nice security blanket to have during a down economy. You only need to be concerned about day-to-day living expenses like food and shelter.

How about you? What are your New Year's financial resolutions? Do you see things getting better in 2009, or worse?

Main Street Meltdown Recommended Reading: Should you bite on those crazy car deals?

Main Street Meltdown : recession

2009...a lot like 2008, only worse.