4 Things To Do Now to Protect Yourself From the Financial Crisis

There is no way to completely protect yourself from the current financial crisis. But there are some ways that you can limit the negative impacts to your personal finances in the short term and prepare for a more prosperous future.

The first thing to do is Don't Panic!

Now, here are 4 other things you can do to help you avoid panicking and to protect yourself from the financial crisis:

1. Look for federal insurance. This is the best way to protect your assets. Look at your bank accounts, and make sure that they are at FDIC insured institutions. Incidentally, there are certain brokerage accounts that are federally insured as well. Check to make sure your investments are insured as much as they can be. (Most investments don't come with insurance. But that doesn't mean the big boys won't get a bailout...)
2. Work on your emergency fund. Now is the time to build up your emergency fund. Pad your fund. This may mean that you need to re-evaluate your spending and your budget. Do it. Try and save what you can. If you lose your job or have some other issue, an emergency fund is something that can help you.
3. Refinance your mortgage if possible. Do your best to refinance your mortgage. You can get a home equity line of credit if you are disciplined enough to access it only in a true emergency. But beyond that, if you refinance your mortgage to a lower, fixed rate, you will be in better shape. Only refinance what you actually owe. Spreading out the payment can give you breathing as it means a lower monthly payment. (Remember to pay your mortgage first.)
4. Now is a good time to invest. But only in the right things. Look for companies that are solid fundamentally and stand a good chance of recovery. Better yet, buy index funds. Over all, the market gains, and index funds takes advantage of the resiliency of the entire market. Buy low is a good strategy for now, especially if you have a time horizon of more than five years.

If you take a measured approach to your personal finances, and plan ahead, you will find that you can weather this financial crisis. Also, remember that the twin of disaster is opportunity. This is a good time to take stock of where you are, and do what you can in terms of preparing for the future (especially with well-chosen investments).

Miranda Marquit writes for AllBusiness.com's Personal Finance Corner.