“This year could be worse than the last,” says Patricia Lovett-Reid, Senior Vice President of TD Waterhouse Canada and host of MoneyTalk on Business News Network (BNN).

And while that does mean that we all need to get real about our finances, we shouldn’t be discouraged from trying to get into better financial shape. “Think about what you have to do and then do one thing a month,” she advises.

To get you started, Ms. Lovett-Reid gives us her top nine tips to help you survive — and thrive — in this economy.

  1. Adjust your attitude. “It’s really important to focus on what matters to you — not the Joneses,” stresses Patricia Lovett-Reid. Take a hard look at the little luxuries that add up to big expenses and ask if these items really matter.
  2. Take stock of your financial situation. “Today’s economy means that you must know where you’re at financially,” she advises. “Primarily, that means having a detailed inventory of your expenses. Most Canadians know how much income they have, but ask them about their spending patterns or how much debt they carry, and they don’t know as much as they think they do.”
  3. Have emergency funds at the ready. Ms. Lovett-Reid normally recommends having emergency savings that can cover your expenses for three to six months; today, she recommends erring on the side of caution and topping it up to nine months.
  4. Have a “Plan B.” “Even if you feel secure in your current position, consider the possibility that you may be jobless,” she warns. “If that does happen, what would you do for work?” Take the time to upgrade your skills, work on your resume or even start networking with other professionals. That way, if you are faced with a job loss, you’ll be ready to start fresh.
  1. Deal with your bad debt. “Now is the time to look at consolidating your debt and negotiating a better interest rate,” says our expert. If you’re ready to take control of your debt, then speak to your bank or credit card company about options that make sense for you.
  2. Make your money work harder. “Ask about the new Tax-Free Savings Account (TFSA), which can hold all kinds of investments including guaranteed investment certificates (GICs). And ask how you can make saving automatic,” she advises. “Doing this is part of getting control of your finances.”
  3. Get back to investment basics. If you’re an investor, revisit your plan, your investor profile, and time horizon. “While it likely isn’t necessary to wipe the slate clean and start over again, you do want to speak to your advisor or planner and see if any tweaks are necessary,” says Patricia Lovett-Reid. “Be prepared to ask questions about diversification and asset allocation, and understand the fees you’re paying.”
  4. Keep your emotions in check. When it comes to your investments, Patricia Lovett-Reid says, “Boring is beautiful!” If you’re invested in quality mutual funds or dividend-earning stocks that are drama-free, then fight the desire to do something. “If you’ve got a five- or 10-year time horizon, your best course of action may be to do nothing,” she explains. A visit with your advisor may be in order.
  5. Forget extremes. While you do want to be more careful with your money, you still want to enjoy life. Patricia Lovett-Reid’s motto is a simple one: “Don’t spend like there’s no tomorrow; don’t save until it hurts.”