"This economic downturn is affecting more people than just those who have the least among us, and that's what is making everybody so uncomfortable," says Jessica Gordon Nembhard, assistant professor and economist at the University of Maryland, College Park, and a member of the BLACK ENTERPRISE Board of Economists. "It's slowly trickling up." Indeed, the question for most people is no longer whether we're in a recession, but rather how long it will last. If you've tried to sell a home, find a job, or invest money in the stock market, you know the economy is slowing down. And at this point, it's hard to tell when it will revive. A recession is generally defined as two consecutive quarters of a decline in gross domestic product but is offically declared by the National Bureau of Economic Research. By most accounts, economic growth began to falter in the first quarter of 2008, but it's technically too soon for an official declaration. "The main cause of the recession was the bursting of the housing bubble," says Jared Bernstein, senior economist with the Economic Policy Institute, a labor-oriented research group in Washington, D.C. "That creates a pretty long-term mess, which is going to take a long time to mop up." Government stimulus packages may not be enough to help. The Federal Reserve's series of interest rate cuts are butting up against tighter credit standards. And the tax rebate checks mailed in the past month are probably too small to make much of a dent. "People will probably use the rebates to pay off credit card debt or save," Bernstein says. "While those are important and necessary, they don't give the economy much of a bang in the short term." The last two recessions, in 1990 and 2001, were shallow and short, each lasting less than a year. If the economy did slip into recession last December, as many observers believe, then a recovery could be under way soon. Yet, history is instructive to a point. The recession of 1982 lasted 16 months, about twice as long as the recessions of '90 and '01. On average, recessions since 1945 have lasted 10 months. For black people, economic downturns often cut deeper, in terms of job losses and business survival. "We're the first to fall back when a recession comes and the last to recover when it ends," Gordon Nembhard notes. The turning point is likely to be a stabilized real estate market. "We expect home building to bottom out the middle of this year," says Gus Faucher, director of macroeconomics with Moody's Economy.com. "And we expect home prices to bottom [out] at the end of '08 or early '09 because there's still a lot of excess inventory in the market." That should be welcome relief for homeowners, who have about 32% of their net worth tied up in home equity. Until then, use some of the tips we've outlined to get through this challenging time. CAREER It is said that a recession is when your neighbor loses his or her job, but a depression is when you lose yours. While the bottom hasn't fallen out of the job market, unemployment is rising and layoffs are more common. In 2008, the economy shed more jobs than it gained each of the first three months of the year, reports the Bureau of Labor Statistics. When companies are forced to cut their work force, there's some discretion in who ends up on the chopping block. Protect yourself in several ways: Target the money: "You want to constantly be thinking about your skill set and how that helps earn money for your organization," says Pamela Mitchell, founder and CEO of The Reinvention Institute, a professional coaching firm based in Miami that helps clients make career changes. "You have to have a mind-set that's driven by adding to the bottom line." Stay positive: This is hardly the environment to be a sourpuss. Bosses want to be around people with a positive outlook, not complainers, says Mitchell. If you're prone to grousing, put a lid on it. Be proactive: Keep your eyes open for another job opportunity. You'll be more attractive to potential employers if you have a job, says recruiter Darnell Mitchell of Mitchell & Associates in West Bloomfield, Michigan. Take former colleagues to lunch. Attend meetings of your trade association and volunteer your time. Update your resume and have it handy. And make sure you have all your contacts' information readily accessible, not just at the office. "You never know when you're going to be taken into an office and given a pink slip," he adds. Despite these efforts, you may not be able to avoid a layoff. If that happens, try to negotiate as good a severance package as possible, including any health benefits, unpaid vacation time, retirement plans, and job training programs. "It depends on the situation, but you might have more leverage than you realize," says Nancy Collamer, a career consultant and founder of LayoffSurvivalGuide.com in Old Greenwich, Connecticut. When Audrey Brown was laid off in 2003 after working as a national account manager to the wholesale market for Verizon in Dallas, she was able to work out an early retirement package. After 25 years, Brown was eligible for lifetime medical coverage. "I still had three kids who were on my insurance," says Brown, a single mother whose children range in age from 18 to 27. "It would have killed me financially if I had to pay for health insurance." Since then, Brown has worked as a consultant for a number of agencies, even landing back at Verizon on a project basis. "I'm making about half of what I was making before I was laid off," she says. "But I'm getting by." She followed some tried-and- true recommendations to get back to work: Take time off: "If you're burnt out from your last job, you're not in a position to look for a new job," says Pamela Mitchell. She recommends treating yourself to a vacation of a week or two. Brown was able to take a year off to evaluate her next move. "I didn't realize how stressed I had been and how little time I had spent with the kids," Brown, 52, says. "I became one of those mothers I hadn't been: going to school, volunteering for programs, and so on." Use your contacts: The contacts you've cultivated are likely to be the backbone of your job search. Send these people an e-mail immediately after you've been laid off, updating them on your contact details. Don't gripe about your employer and don't ask for a job then. "Just say, 'I'll be in touch in a couple of weeks. I look forward to catching up,'" advises Collamer. Know your transferable skills: Your job search will go much better if you're open to a wide range of opportunities. For example, Brown's industry, telecom, experienced a severe downturn in the early part of the decade. She couldn't find comparable employment. At one point she even interviewed for telemarketing jobs before landing a steady stream of consulting gigs. Her current assignment is with a bank. The company is meshing two computer systems following a merger with another bank. Brown went through a similar process when GTE merged with Bell Atlantic to form Verizon in 2000, so she's able to draw on that expertise. "I thought it was a stretch for me, but I'm using a lot of the same skills," she says. HOME Part of today's housing problem is that huge annual price gains, coupled with easy credit and low interest rates, allowed owners to treat their homes like ATMs. From 2001 to 2006, homeowners cashed out $1.2 trillion in home equity -- much of that going toward credit card debt. But that maneuver will no longer be available as home prices fall. At the end of the first quarter, median home prices were down 8.2% from a year earlier. The U.S. Congress Joint Economic Committee estimated that there could be some 2 million foreclosures through 2009, destroying $71 bil lion in wealth. Antonett and Robert Jones of Washington, D.C., are hoping to avert that fate. The couple refinanced their four-bedroom, three-story Capitol Hill home in January 2007. Through an interest-only mortgage from Countrywide Financial, they paid $1,300 a month. But the Joneses soon found out the rate they were given was a teaser, good for just a few months. Shortly before their mortgage was reset, Antonett came down with a debilitating illness that her doctors are still unable to diagnose. It swelled her throat, tongue, and extremities, making it difficult to walk. Unable to continue her job as a contract specialist for the federal government, she was placed on leave without pay. "When I realized that my financial situation was going to be different, I immediately went to work on our mortgage," says Antonett, 46. She says the mortgage company was unsympathetic to her and Robert, 50, a construction worker, and last August increased their monthly payments to $2,800. Unable to pay the full amount, they eventually fell $8,000 behind. The couple attended a mortgage workshop at a local church last fall and connected with the Neighborhood Assistance Corporation of America, a nonprofit community advocacy group. "They are helping us save our home due to the type of loan it was," Antonett says. Countrywide has agreed to take partial payments. The Joneses borrowed $4,000 from a friend, and a tax refund of $4,000 will go toward meeting the rest of the obligation. Now they're working on restructuring the loan into a standard 30-year, fixed-rate mortgage. "We're still not out of the woods," Antonett says. "But we're getting close." Here are some steps to take if you find yourself in a similar bind: Negotiate: Remember lenders are hurting too, and they're more willing to listen now. "There's a lot of regulatory pressure on lenders not to put people out on the street," says Guy Cecala, publisher of Inside Mortgage Finance in Bethesda, Maryland. Restructure: When they modify a loan, lenders will usually tack on missed payments to the end of the loan and extend its life. Ask for more, advises Cecala. "Borrowers should be pressing for a reduction in interest rate and a reduction in the loan balance to reflect the current market price," he says. "Lenders would never have made such reductions two years ago." Face the Music: The sooner you address your inability to pay the mortgage, the better. "If you get beyond 120 days, there are very few options," notes the Rev. Anthony Evans, president of the National Black Church Initiative in Washington, D.C. At that point, lenders will start foreclosure proceedings. For more tips from the NBCI and the Mortgage Bankers Association, download the free Foreclosure Prevention Guide from the NBCI Website, www.naltblack church.com. Even if you're not facing foreclosure, your mortgage payments may be about to balloon if you took an interest-only loan. Loans from 2005 and 2006 will readjust soon after the initial three-year interest period ends. Look into refinancing for a more conventional loan now. (See "Time to Refinance?" Moneywise, this issue.) Yet, for some, there is a silver lining to the depressed housing market. "It's not a bad time to buy a home," says Ed Yardeni, chief investment strategist of Yardeni Research Inc., a provider of investment strategy research in Great Neck, New York. "Interest rates are down and so are prices." Karl and Tonya Douglass, both 39, of Columbus, Georgia, took advantage of lower prices to land the home of their dreams. For close to two years, the couple had their eye on a new loft condo development downtown, a converted cotton mill on the banks of the Chattahoochee River. They planned to spend $800,000, but after numerous construction delays, the Douglasses lost patience and began looking for an alternative. Then in January, Karl spotted a 5,200-square-foot house with a detached eight-car garage. When he called the real estate agent, he learned that the price had just been lowered to $680,000 from the initial $799,000 price tag. After four months on the market, the owner was eager to sell. "The house was fine, but it was the garage that really drew me in," says Karl, a self-employed business consultant, about the 2,300-square-foot, double-brick structure. The main house is hardly shabby either with five bedrooms, a gourmet chef's kitchen, and saltwater pool. Having moved into the home in early March, the Douglasses are about to start the conversion of the garage into a two-bedroom home for Karl's parents. They are finding another perk of the depressed real estate market: Contractors are readily available and willing to throw in higher-quality finishes to sweeten the deal. "These contractors are literally sitting at home waiting by their phones for us to call and tell them to start," Tonya says. BUDGET Even if you aren't feeling real financial pressure at the moment, you should still be tightening your belt. Two reasons: First, it's still too early to tell whether job losses will be contained to the housing and financial sectors or whether they'll eventually become more widespread. Second, raises aren't likely to be as plentiful as before, yet inflation, at 4% a year, is ticking higher. So you'll feel poorer. "If there's anything uncertain about your employment, you want to make sure your budget is as lean as it can be," says Gwendolyn V. Kirkland, certified financial planner with Kirkland, Turnbo & Associates in Matteson, Illinois. The cash cache: The usual rule of thumb of saving three to six months of living expenses doesn't apply to these uncertain times. Finding a job in the middle of a recession could take longer than normal. So Kirkland advises a year's cash horde. "It doesn't necessarily have to be in cash, it could be a cash equivalent, something where you won't incur penalties if you must access the money," she says. If you can't find the money to build up your kitty, consider Kirkland's ideas: Take a part-time job, turn a skill into an income stream, or sell your used clothing at a consignment shop. But don't even think about raiding your retirement account if you come up short. You'll have to pay penalties and taxes and will set you back financially. Necessary vs. discretionary: Remember when a cell phone was a luxury? It's almost more necessary than breathing to some people. If you can't give up your mobile, look for other places to trim some fat. For example, are you paying for a gym membership you don't use? Buy a pair of good running shoes instead and hit the pavement. Pay down debt: Households with credit card debt spend 21% of their income servicing that debt. If your income isn't rising, but your debt is, more and more of your money will be eaten up by debt. Try to pay down as much of it as you can. "If you're disciplined and own your own home, under certain circumstances, I'd recommend that you refinance and pay off your debt," says Dwight Raiford, senior financial planner with MetLife in New York City. But, there's a caveat, he adds: "Then you have to take scissors to your credit cards and cut them up." You might be tempted to not even open your brokerage statements. Seeing all that red can be sobering. For long-term investors, recessions should be viewed as chances to buy. "Smart shoppers know if you're buying shoes or clothing, you buy when they're on sale," says Raiford of MetLife. "The professionals look at downturns as buying opportunities." Don't panic: In March, Fritzi Woods, president and chief executive officer of PrimeSource Food Service Equipment in Dallas, received her monthly brokerage statement. It showed a $6,000 loss in one fund alone, almost as much as she'd gained on the investment in the previous quarter. "I get nervous when I see my funds go down,& quot; she says "I wanted to go into cash." Her husband, Tim, 48, a procurement consultant for the federal government, is more aggressive. When markets dip, he sees opportunity. "Selling now, you're guaranteed to lock in a loss," he says. "It's just a matter of time before the market corrects itself." As the market dips, try to fight against your instinct to flee. Individual investors have a lousy sense of timing. They usually buy shares when they've already had spectacular runs only to sell when they swoon. Fritzi, also 48, called her financial adviser, who reminded her of this fact. So she stayed put. Take the guesswork out of when to buy stocks by employing a system of dollar cost averaging -- purchasing a set dollar amount of stocks at regular intervals. That will enable you to buy stocks or funds at all different levels, getting more shares when prices are down. Go to the sales: The market slide has taken a lot of wind out of inflated stock prices. Today, the Standard & Poor's 500 is sporting a price-to-earnings ratio of 13 times forward earnings, well below the historical average of 17 times the index normally has. "There are a lot of industries within the S&P that have even lower multiples," says Yardeni, the investment strategist. "They are being priced as though the sky is falling." Fritzi bought shares of GlaxoSmith-Kline and Bank of America last August. The stocks' prices had fallen to the point she figured there was limited downside. "Of course you never know where the bottom is, but it seemed like a good price," she says. Stock up on staples: No matter what the state of the economy is, people still need to meet their basic needs. That's why consumer staple companies tend to be, if not recession-proof, recession resistant. The Woods' adviser, Jesse Abercrombie with Edward Jones in Dallas, likes Wal-Mart Stores. "It's extremely attractive from a valuation standpoint," he says about the stock's 18.53 times forward price-to-earnings ratio. "And whenever the economy goes into a recession, people aren't buying Harleys, but they're still going to Wal-Mart." Apparently others agree; through mid-April the stock was up 19%. Think globally: If you're concerned about a lasting recession in the U.S. and think other economies may fare better, proceed with caution. That trend could be nearing its end. Over the past five years, the MSCI EAFE, an index of international stocks, was up an average of 21% a year, while the Standard & Poor's 500 was up just 11%. And U.S. investors have sent money overseas in droves. Aim for a healthy dose of international names in your portfolio, generally about a quarter to a third of your total stock allocation. Buy bonds. When looking for safe havens, consider bonds rather than cash. With the Federal Reserve slashing interest rates seven times since September 2007, you could actually lose money on your cash after you factor in inflation. Bonds offer a bit more upside, says Mary Pugh, president and CEO of Seattle-based Pugh Capital Management. "From a spread standpoint corporate bonds are at some of the widest levels we've seen in years," she says. Pugh likes bonds from mortgage backers Fannie Mae and Freddie Mac, whose prices have fallen sharply in the wake of the mortgage crisis. When bond prices fall, their yields rise. She expects the bonds to realize some price appreciation in coming months. "It's true they've become less liquid," she says, "but just because they've had spread volatility and price depreciation, doesn't mean they aren't good." In the end, whether or not you're currently feeling the effects of the economic slowdown, taking stock of where you stand in all aspects of your financial life can only help. Your affairs will be in better shape when the economy rebounds. And remember, it's not all doom and gloom. Homeownership is a key foundation for building wealth, and no one's disputing that it's a buyers' market.