It takes a real effort to find positive attributes of the economic crisis, but a few certainly do exist. Near the top of the list are the great deals that are becoming more common for those able to take a vacation.

Fears of layoffs may keep some workers from considering a vacation, but those whose jobs are relatively secure can get some amazing deals. Demand for travel is down significantly and many vacation destinations are trying to entice guests with extremely low prices. The Associated Press recently reported that airlines started 2009 with drastic price reductions, but cuts go beyond just airfare. These sales are nothing new, but the breadth of the offerings as well as the reduced restrictions are certainly noteworthy. Sale fares in prior years were typically only for travel through March. This year some deals are valid on travel as late as June.

There are many ways to find cheap travel online, but my favorite starting point is kayak.com, which searches other travel sites and presents the best of the best options. Deals on flights, hotels, car rentals, vacation packages, and cruises can all be found on the site. You can also enter flexible travel dates, get price alerts by email and much, much more.

While the economic crisis is certainly a cause for concern, it’s important to keep the proper perspective about the constant stream of bad news. As I mentioned in Personal Effect of the Financial Crisis, unless the bad news affects you, it can actually present some positive opportunities. Getting a great deal on travel is one such example. An inexpensive week or two away will not only remove you from the negativity but may also give you the time to recover and be better prepared to deal with the crisis when you finally do return.

Are you planning a vacation for this year?

According to a recent Reuters article, stores have been reporting a rise in the sales of piggy banks as well as safes. While this only provides anecdotal evidence of a change in focus among consumers, it is still an encouraging sign.

The change in focus seems to be twofold:

First, consumers are more conscious of thrift and frugality whether out of necessity or simply the growing popularity of these trends. Piggy banks are more than just a place to save money; they symbolize saving as well. Seeing a piggy bank is a visual reminder to save money and avoid wasteful spending. They also provide and excellent method of teaching children about money.

Second, confidence in traditional institutions is much lower than normal. By storing money or valuables at home, consumers forgo the interest they could be earning at traditional banks for a perceived increase in safety. In reality, banks are a much safer place to store your money when FDIC insurance is covering your deposits. What storing money at home offers you is more control over the situation, but certainly not more safety. You are only a fire or theft away from losing anything stored in your home. That being said, there is still a place for a safe in your home. It can be used to store important documents and certain valuables that you need access to outside of normal business hours.

Seeing an increase in the sales of piggy banks and safes is not surprising. These items are synonymous with frugal and survivalist mindsets, both of which are also on the rise. Whether you need to run out and buy one or both of these items is a matter of personal opinion, but be sure that you don't overspend on them, as that would obviously be counterproductive.

Have you bought a safe or piggy bank recently?

The widespread and extended power outages in New Hampshire during early December reminded me of the joy of losing power as a child. In a great example of doing more with less, losing power always sparked our creativity and led to fun memories.

One of the reasons why losing power was fun was that it was rare. It also helped when it didn't last long. After a few hours, the novelty starts to wear off. But for those first few hours, the experience was great. Getting out candles, playing board games, and doing without modern conveniences was hardly a sacrifice. There were even times when power was restored quickly, before we'd grown tired of the experience, and we'd keep the lights and electronics turned off to finish our games.

In those dark hours without power, life seemed simpler and indeed it was. When you are forced to do without, you quickly realize that you can easily survive without. It can be difficult to force the issue with certain conveniences, but many provide the opportunity themselves. Laptops die, cell phones lose service, and holidays prevent the mail carrier from delivering your latest Netflix selection. In those cases, and many others, we get a glimpse of life without a perceived necessity.

Despite our fears, we always survive. If you'd like to simplify your life, force the issue. Give yourself a day without electronics, power, or some other modern convenience that is complicating your life. At worst, you'll learn something about yourself. More likely, you'll realize that many of life's necessities are thinly veiled luxuries.

What activities would you do as a child when the power went out?

Over the past few months, we have seen a huge change in the financial world. Loans are suddenly difficult to get, jobs are tough to find, and credit is hard to come by. The global financial crisis is making life very difficult on the consumer. Anecdotally, a friend of mine, with a 740 credit score, was unable to get a credit card with more than a $2,000 limit. If someone with a 740 credit score (well above average) can't get a decent credit card, what hope do the rest of us have?

Economists have even been theorizing that the next crisis will be because of credit cards. The New York Times writes:

"First came the mortgage crisis. Now comes the credit card crisis. After years of flooding Americans with credit card offers and sky-high credit lines, lenders are sharply curtailing both, just as an eroding economy squeezes consumers."

Almost all credit card companies are dropping or decreasing their promotions, tightening their standards, and making the credit process a lot more difficult for consumers. So why is credit important? At some point in your life, you will probably need to take a loan, a mortgage, or prove that you are trustworthy. In all of these situations, a decent credit score is extremely important.

Keeping your credit score high

Especially during a crisis like this one, keeping a good credit score is imperative. So, what should you do to boost your credit rating in a period of economic unease?

1. Check your credit report

The first thing you should do is get hold of your annual credit report, to make sure that all of your accounts are in check. You can do this for free, once every year, from annualcreditreport.com. From there, you can check your credit report at the three different credit-reporting agencies (TransUnion, Equifax, Experian). Note: You will only be able to see your credit report, not your actual credit score. You can see your credit score by signing up to a service through one of the agencies. I use TransUnion, which for $15/month updates me daily on my credit report and monthly on my credit score.

2. Pay on time

Make sure you always pay your bills on time. This is the most important step to improving and maintaining a good credit score. Paying on time is important, but so is keeping your debt load low. This means that you should NOT max out your credit cards. Lenders will see that you are close to your maximum on your credit cards, and they will deem you as a higher risk than someone who keeps their credit cards in check.

3. If you don't have a credit history, get a credit card

This applies to me currently: I cannot get very high limit credit cards because I am a student, and I have a limited credit history. In this case, I recommend that you open a credit card and take very good care of your account. Of course, as I mentioned earlier, now is a difficult time to get credit cards, so you may need to look into student credit cards or secured credit cards. Speak to your bank or check out creditcardguide.com to see some credit card offers that may help you.

If you follow these steps, and you manage not to spend too much during this current crisis, you might find yourself with a better credit rating by the time the economy begins moving upwards. Believe me: you will thank yourself for keeping your credit score high. Paying your bills on time and maintaining good credit is worth the time it takes.

If you were to reduce all of my philosophies on personal finance down to a single principle, I suspect that performing cost-benefit analyses would be the result. Applying this method to all that you do will help to get your finances back on track.

Cost-benefit analysis simply means determining whether a choice or course of action is worth it to you. At times this analysis is extremely straightforward and at others it takes some work. The final comparison is the same, but the difference between the two cases is similar to a basic math problem and a word problem from math class. In the latter case, the first step is converting the circumstances from words into the equations and expressions that can then use basic math to be solved. And you thought you'd never use those grade school skills again!

A simple example of a cost-benefit analysis is whether you should buy a name brand or generic product. In many cases, you might not notice much difference (or any at all) between the two products and would decide to buy generic to save money. If you do notice a big difference, then the premium price for the branded product may be worth it. You can imagine how you might come to a different conclusion as the difference between the two prices or products varied. This shows how you might react differently to changes in the cost (the difference in the two prices) or the benefit (the perceived difference between the product) as both come into play in a cost-benefit analysis.

It's easy to see how a more detailed analysis can result from even this simple case. Suppose you had to drive to another store to buy the generic product. Now, the cost of your time, gasoline, and perhaps even wear and tear on your car could be added to the consideration. More complicated questions can be analyzed in a similar way. From a pure cost perspective, you might choose to always prepare your own food rather than eating out. But considering the joy you get when you do go out, the time it takes to plan, buy, and prepare food at home, and even your aptitude in the kitchen may adjust your final conclusion. We often perform much of this analysis subconsciously, but it all still factors into our decisions. By consciously recognizing these factors, we can make better, more informed decisions.

In my opinion, nearly every financial decision boils down to a cost-benefit analysis, which is why I consider it my guiding principle in personal finance. Carefully answering the question “Which choice gives me the best combination of low cost and high benefit?” will help to make financial decisions much easier. There will be times when insufficient information is available to make the best decision, but with practice you'll quickly learn to assess even those situations effectively.

Do you perform a cost-benefit analysis to help you make financial decisions?