U.S. economists are no longer denying that we are in a recession and facing the worst economic times since the Great Depression. It was frightening to hear President Elect Barack Obama on Meet the Press talk about how bad things are. Unfortunately, he gave no indication that things would get better. In fact, he mentioned a number of times that, “Things are going to get worse before they get better.”

Those are tough words to swallow when we are already facing the worst employment numbers in a long time. The Washington Post’s headline on Saturday read, “Monthly loss of jobs worst in 34 years.”

Over 500,000 jobs were lost just last month, and things are going to get worse?

If things are not getting better any time soon, it’s not a bad idea to prepare for the worst. The reality is that your safe, secure job today may not exist tomorrow. So what can you do to avoid your own personal recession?

1. Make Yourself Valuable: If you are an employee, it is absolutely necessary to make yourself an asset to your company. By either finding ways to save money or bring in more revenue, you can make yourself stand out from your peers. During times of downsizing, very tough decisions are made and sometimes the difference between you and someone else losing their job virtually comes down to a coin toss. Be sure you’re giving yourself an edge by increasing your company’s bottom line.
2. Build Up Your Cash Reserve: Now is not the time to reduce your 401k contributions, but it is a good time to cut back on discretionary spending. Put money aside that you would normally spend on entertainment, for example, to be prepared for worst case scenarios. If all else fails, then you still have your 401k to borrow against if absolutely necessary.
3. Diversify Your Income: Whether you are an entrepreneur or not, now is a good time to bring in additional revenue streams. If you have a business, you’re probably feeling the slowdown. Think about other markets you can tap into or where you can expand services. If you don’t have your own company, start thinking about how you can monetize your free time. It’s easy to start your own business from home by creating signs for local businesses or producing an income online. With some creativity and effort, you can easily bring in a few hundred dollars a month, which can go a long way.

During the Great Depression and other tough economic times throughout history, some people became incredibly wealthy. They were able to achieve this by being prepared and taking advantage of opportunities that no one else could.

Just because the over all economic environment is not positive doesn’t mean it has to affect you. Protect yourself, provide value, and produce your own income and you’ll be able to sleep soundly at night as things continue to worsen.