The nation’s economic recovery is anemic, with unemployment rates continuing to climb, but this doesn’t mean that your household economy is in trouble. In all the news that I've read about the economy, the media fails to report that around 90% of the country that wants a job has one; small businesses are hiring; and that if you buy stock now, when the market goes back up, you’ll be in an enviable position. Recession, even economic depression, is also a mindset. And there are millions of people in the US and around the world who are simply choosing not to participate in this downtrend.

Why do recessions cause anxiety? Because of our fear of uncertainty and the unknown. And then there is the media, which can provoke that anxiety. Local news reports have started running stories about people who have a complete year’s supply of food on hand at all times for the coming depression. Employment security (or the lack thereof), investment certainty (or the lack thereof), inflation, and other factors all combine to create a sense of dread that the media elevates to panic. But you don’t have to participate in the fear, the hype, the sleepless nights, or the hoarding. Here are a few simple (or not so simple, but effective) ways to prepare for any economic slowdown. These methods will help you to avoid participating in the recession and the fear mongering that prevail during such periods.

Emergency Funds Are a MUST.

The best way to combat uncertainty is to have a back-up plan. Back-up plans remove fear. If you had money to cover six months worth of household expenses (food, bills, house and car payments, etc.) in a high interest savings account — or even under your mattress — “just in case”, would that ease your mind about getting a pink slip? Would you work differently knowing that you had a Plan B? Increasing your savings — your “rainy day fund” — will ease your mind and give your family a strong financial footing. You may even be able to tell your boss “thank you” when the pink slip comes because then you'd be free to start your own small business or spend time at home with the kids or plant that garden you were meaning to, or do whatever it is you would like to do while you look for another job.

Pay off Debt.

What would you do with an extra $1,000 dollars a month? Would you revisit your stock broker for advice on how to build your retirement? Or perhaps you'd like to rethink the early mortgage payoff and pay off your house. Or what about building up your emergency fund or taking a vacation? Would you stimulate the local economy by being a consumer? There's a lot that you can certainly do when you have an extra $1000 or more a month in income. Most American households pay anywhere from $800 to $2,000 a month toward debt (including car loans) and compound interest. But imagine having no debt to worry about — then even if you lose your job because of a layoff or pay cut, things wouldn't be so dire given that you don't have to make debt payments. If you're having trouble paying off debt, you may want to consider credit counseling or debt settlement as a last resort.

Keep Cash on Hand.

If you are worried about a run on the banks, or your bank in particular, then keep a supply of cash on hand: just enough to buy food, water, and gas for a couple of weeks, no more. Should your bank fail, your deposits and surely, your high yield savings are insured though the FDIC for up to $250,000 and you will get your money back, eventually. Should the FDIC fail…well, getting money out of your bank will be the least of your problems if the Federal Reserve fails.

Don't Stop Investing.

Warren Buffett (a close, personal friend of President Obama, if one believes campaign rhetoric), once said about investing: “Be fearful when others are greedy and greedy when others are fearful.” Well, right now should be the perfect time to invest because everyone and their brother is taking money out of the market and hiding it in a paper grocery bag in the back corner of the hall closet.

Sure, you may lose a little of what you put into the market today, but when you continue to invest when the market is down, you can buy more stock than you could a year ago with the same amount of money. When the market goes back up — which it will — those who continued to invest with their discount broker during this time, when stocks are “on sale”, will be that much closer to reaching their financial goals.

Don't forget, also, that investing should be for the LONG TERM…not for just a couple of years. Remember that 80% of ANY rolling five-year period in the last 110 years has averaged up, and over 90% of any rolling 10-year period and each rolling 20-year period have shown overall gains. Thus, market hiccups don’t look nearly as bad.

When you make the conscious choice not to participate in the recession, suddenly the dire economic news does not seem so apocalyptic. If you do just a few things to protect your family — most important is paying off debt (and not accruing more) and putting aside an emergency fund equivalent to at least six months of expenses — then the numbers given in the evening news, even if you are included in the latest round of layoffs, won’t keep you awake at night.