Warren Buffet Uses the "R" Word

When Warren Buffet makes a comment about the U.S. economy, even an off-handed comment, people take notice. Buffet, who is one of the richest men in the world and the second-richest in the U.S and often quoted for his sage investment advice, recently told CNBC, and later Forbes Magazine, that the U.S. is basically in a recession, due in no small part to the mortgage crisis. With many homes now not worth what people owe on them, many have lost significant portions of their net worth.

Now, Savvy Frugality is no Warren Buffet, but we did start warning of the storm clouds on the horizon back in September. If you didn't start implementing the six steps to recession-proof your finances, there is still time. I have been saving at least ten percent of each paycheck and reducing expenses at home, and stocking my pantry with extra canned goods.

Buffet isn't all doom and gloom about the U.S. economy. He says Berkshire Hathaway will continue to invest in good U.S. companies which he predicts will endure any recession just fine. Geico, Costco, Coca-Cola and American Express are some of those companies specifically mentioned by Buffet. I would also add Wal-Mart and Walgreens to that list.

Savvy Frugality tip: Even in a poor economic market, there is still money to be made. Concentrate on companies which are able to withstand temporary economic downturns, especially those that offer value for money, or offer something that people will need no matter what the economy is doing, such as oil, medicines or food.