To prepare for the worst, we should picture an unemployed scenario and get serious about bulking up our emergency fund to meet at least six to eight months of expenses. Now I know that saving up six months of expenses is no laughing matter, especially if you are a credit card junkie and have formed an onerous habit of living from paycheck to paycheck.

Credit card debts are an increasing cause of concern and many are of the opinion that after subprime lending, credit card defaults is the second largest cause of the already existing economic slump. Defaults related to use of plastic money is adding fuel to fire.

Global stock markets have been whitewashed over the past month, Dow Jones fell to its lowest level in 6 years this week, and gold has charged to a record high $1,007 as investors seek to preserve capital.

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