With the severe problems in the economy, it's very easy to be worried about your current and future situation. Sometimes, such a big crisis leads people to act very irrationally, doing things they shouldn't. For example, the The New York Times reports that all over the country, the economic crisis has driven people to acts that actually undermine their financial situation, causing them to spend more money than they would have without changing their routine. According to this article:

"As Americans attempt to perform cost-benefit analysis of their needs and behaviors, they are whittling pennies from cable bills only to squander dollars on gas driving miles to discount stores, or on coupon-spurred splurges for nonessential items, like Cheez Whiz or organizing supplies."

What shouldn't I do?

The biggest thing to remember: Don't panic. Just because there is a sudden change in the economic situation doesn't mean it's time to cash out all your money and store it under your mattress. The Motley Fool reported an interview with senior analyst Tim Hanson and asked him what an investor should do. Tim's response?

“Question: What's the one thing individual investors should keep in mind during these turbulent times?

Hanson: Don't panic. While this may seem like a once-in-a-lifetime event (and in its intensity, it's getting close), the fact of the matter is that the stock market cycles through boom and bust every eight to 10 years or so. Our economy has a 100 percent record of recovery, and though it will take some time to sort through this housing/credit/economic crisis, we'll get there in the end.

So, stay stoic with your money and be careful not to let emotion trump your sound long-term, asset-allocation strategy. If you don't have an asset-allocation strategy, now is a very good time to put one in place.

If you're young, that means sticking with the stock market and buying more stocks today. If you're closer to retirement, that means making sure you're protecting your principal by owning something like Treasury Inflation-Protected Securities, or TIPS.”

Additionally, make sure you take the time to evaluate your spending. Don't make any rash decisions and begin buying things you don't need, like some Americans have done, according to the NYTimes:

“[W]hen Wal-Mart released its report last week, there was a surprise. Consumers had increased their flat-screen purchases. Somehow, because Wal-Mart feels like a bargain store, shoppers who have deprived themselves of luxury items elsewhere rationalized their purchases at Wal-Mart as ‘getting a good deal,’ ” Mr. Brafman continued. “Granted, flat-panel TV’s at Wal-Mart might run a little cheaper than elsewhere, but no financial adviser would include one on his or her list of Items to Buy During Tough Times.”

Thus, make sure you do a cost-benefit analysis of any changes you plan to make to your budget or spending habits.

What should I do?

You should be doing the obvious things, such as being frugal. Don't waste your money; don't throw it away. But here is a little bit of non-obvious advice you might not have thought about.

Now might be the best time to act like an entrepreneur. I myself recently just started a company and moved to South America to escape the bad economy. Paul Graham recently wrote in his article "Why to Start a Startup in a Bad Economy:"

“Last year you had to be prepared to explain how your startup was viral. Next year you’ll have to explain how it’s recession-proof.

Fortunately the way to make a startup recession-proof is to do exactly what you should do anyway: run it as cheaply as possible. For years I’ve been telling founders that the surest route to success is to be the cockroaches of the corporate world. The immediate cause of death in a startup is always running out of money. The cheaper your company is to operate, the harder it is to kill. Fortunately it has gotten very cheap to run a startup, and a recession will if anything make it cheaper still.

Another advantage of bad times is that there’s less competition. Technology trains leave the station at regular intervals. If everyone else is cowering in a corner, you may have a whole car to yourself.”

In other words, now might be the time to think about doing something new. Is there a way to make a profit despite the bad economy? Think about it.

Did you know that being unselfish can actually be selfish?

Before I confuse myself and you, let me explain. I used to think that by never spending money on myself or taking time for myself, I was being unselfish. I thought that because I have family that depends on me financially, anything I spent for "me" would be a waste.

I was completely wrong.

Do you know your most important asset? Your home? Nope. Your car? Nope. Your most important asset is you. Yes, you.

Without you, you don't have an income. Without you, your parents don't have a child. You are a producer, and if you're not 100% then how can you produce at 100%? Assets support cash flow. You are your most important asset. You need cash flow to prosper and pay your bills. But are you taking the time to nurture and protect your most valuable asset? If you're like I used to be, probably not.

Here are seven practical ways to protect and grow your most valuable asset: You.

1. Get more sleep. Tonight.

This is hands-down the fastest and simplest way to improve your productivity. With enough sleep each night, you won't need to down those 3 cups of coffee just to get going in the morning. With the right amount of sleep your body property handles food processing. You're less cranky. You're more creative. Take a look here and here for great sleep tips.

2. Cut draining relationships

Relationships are a two-way street. Sometimes they are life-giving and refreshing, other times they are life-draining and depressing. Good healthy relationships go both ways. If you're constantly dealing with relationships that are life-draining and you're not a counselor by trade, it's time to cull your list of friends.

Is dropping friends harsh? Yes, but again, taking care of yourself is not selfish. If you're worn down by numerous draining relationships, what will happen when one of your healthy relationships actually needs you? You'll be too drained to help. Cultivate healthy relationships and cut back on the draining ones.

3. Never skimp on insurance

To be able to produce at a high level, you cannot be concerned with factors outside your control. Insurance may be costly, but the peace of mind it provides (Automotive, Health, Life, Property) can provide you with a huge return on your money.

While the cost of insurance is important, your focus should be “how will this improve my ability to produce more income?” Insurance is about transferring risk. The more risk you can transfer away from yourself, the better you will sleep at night and the more productive you will be.

4. Fuel yourself properly

The biggest problem for many hard workers is fuel. It's not that we don't eat. It’s that we don't eat well. We stock up on coffee, Red Bull and fast food to make it through the day. Eating balanced and healthy meals will not only make you feel better, you'll live longer as well.

Lifehack has a fantastic list of over 100 quick and healthy meals. Now you have no excuse. Fueling yourself properly is both a short and long term investment in your MVA (most valuable asset).

5. ABL. Always Be Learnin'

When you begin to view yourself as your most valuable asset, your mindset changes dramatically. One area that changed dramatically for me personally was in the area of education. I used to feel guilty about buying a fantastic new business book, or wanting to go to a thousand dollar conference. No more.

Investing in yourself through education is nearly always a good investment. I'm not just talking traditional schooling here, education could be reading that marketing book you've been wanting for years, or attending a free online class or webinar.

6. Do 25 Pushups. Right Now.

I'm serious. Get down and do them right now.

Did you do them? If you did, I'll bet you feel better now. Exercise makes everything better. You'll live longer. You'll feel better. You'll look hotter. Just take a look at these Lending Clubbers...

7. Schedule time to do nothing

Put “nothing” on your schedule. Of course, you'll not actually end up doing “nothing”, but you need to schedule that time in if you're not getting enough of it. Maybe you read a book, or go for a jog, or spend time with your kids. Just put it on the schedule.

It may sound selfish to think of yourself as your most important asset. It isn't. In fact, protecting your ability to produce and grow is one of the most unselfish things you can do for your family and your future.

What are you doing to improve and protect yourself?

One of the major bright spots of defined contribution plans, such as 401(k)s, was the fact that many employers offered some sort of contribution matching. If the old saying that "as GM goes so goes the nation” holds true, then many companies may soon be following GM's lead by dropping their contribution-matching programs.

Dropping such programs is an easy way for companies facing financial troubles amid the current economic turmoil to cut a significant cost. But contribution-matching programs are an excellent motivation for workers to save. By maxing out the employer match, workers essentially get free money that is able to grow in a tax-deferred manner. By removing this incentive, fewer workers may invest in these retirement programs, or workers may reduce the contributions that they had been making. Such actions could have serious consequences. With fewer employees being covered by defined benefit plans and the solvency of Social Security in question, many workers have only their 401(k) plans to rely on in retirement. Heavy losses, due to the downturn in the market, coupled with reduced contributions, could be a recipe for disaster.

GM's suspension of 401(k) contribution matching is expected to be temporary - it has previously paused the program one other time - but must still be worrisome to employees. At a time when the economy is in trouble and job security is declining, reduction or elimination of matching contributions further erodes employee confidence in the company. Having matching contributions cut is more favorable than firing workers to cut costs, but is still undesirable.

For anyone whose company continues to offer matching contributions, now may be a good time to ensure that you are getting the maximum available match. Increasing your contributions for the rest of the year could help you to boost your retirement nest egg by buying into the currently depressed market and taking full advantage of the free money your company is offering while matching contributions last.

Has your company reduced or eliminated its matching contributions?

Today, we’re happy to announce that our securities filing has been cleared by the great Commonwealth of Virginia, a.k.a. the “Old Dominion” and the “Mother of Presidents”. We’re excited to kick the week off with this full opening of our social lending platform to investors in the 12th largest state in the Union, with a population of 7.7M.

The map is filling in…

Onward and upward!

The end of the year is typically when many charities receive their largest donation volume. This is likely caused by a combination of Christmas and other gift giving holidays as well as a desire by many donors to get credit in the current tax year. With the economy struggling, donations are likely to be down this year. To help offset lower donations, many charities have started their fund raising efforts early this year.

I’ve been receiving end-of-year charitable requests in the mail since mid-October. Traditionally, these requests don’t start coming until early December. Charities are likely taking a cue from retailers, who began Christmas sales early this year for many of the same reasons.

This early start may also be related to the general trend of starting holiday celebrations earlier. As a child, I remember no mention of Christmas until Santa Claus arrived in Herald Square at the end of the Macy’s Thanksgiving Day Parade. Today, many stores feature Christmas displays even before Halloween. I feel bad for children, who are now forced to wait so long for Christmas to arrive.

As with spreading holiday shopping over an extended period of time, having longer to give to charity might make such gifts more affordable. Giving a little money multiple times might seem easier than giving more money once. Even so, charities face an uphill battle because many consumers see charitable donations as discretionary spending. Spending for social benefits may be reduced or cut entirely before spending for more personal benefits. Cutting all discretionary spending by an equal percentage will let you give more equitably to charity. An alternative is to discuss the idea of forgoing gifts between like-minded friends or family and instead donating the money to those most likely to appreciate it.

When times are tough, it can be difficult to be charitable. Remembering that tough times hit hardest on those in need and getting an early start on end-of-year donations may help you to do the most good.

Are you cutting back on giving this holiday season?