The United State financial strength is uncertain right now. The economy has been tough, government spending is rising, home prices are down, and your retirement accounts are likely shrinking. I can’t guarantee in this article any one place is a better investment over another, but I hope to hash out some issues and get you thinking. Hopefully, after reading this article you’ll realize that doing nothing with your finances is doing something, I just want you to decide that’s the right choice not fall into it.

Option 1: Hide your money under the mattress.

If this is your savings plan you best not have any debt because if you will be losing faster than you gain. Deflation means the buying power of the dollar goes up. However, if you feel this is what’s likely to happen you should just put your money in a high interest savings account. You’ll gain some interest while the buying power of the dollar goes up. The added risk of trusting your money in a savings account is very low. If the bank system collapses and the FDIC (savings insurance) buying power of the dollar will be the least of your concerns.

Option 2: Buy those bonds

In order to fund a deficit the government needs a source of cash. If the government prints money this causes inflation because extra dollars in the system means each dollar is worth less. When loaners believe the dollar will be worth less next year they will demand a higher return for their loan. More return means higher interest – higher interest means bond prices go down. If the government chooses to borrow the money, the slug of extra treasury notes will force the interest rate up in order to get more people to purchase them. Again higher rates mean lower bond prices. The only way bonds are good to buy is if you think the dollar will remain the same or the government still has the ability to lower yields.

Option 3: Equity Market

Companies as a whole may very likely be hurt, however, instead of just choosing to blindly buy the market there is some gems still out there. Choosing high dividend paying companies that are relatively safe from the bad economy (look at what you’re still buying) could pay you decently while you wait the stock market to return to normal.

Option 4: Pay off those credit cards.

When you pay off your debt you reduce your risk. No matter if inflation happens, or you lose your job, or everything goes on fine you are better off then you were before when you pay your debt. It’s easy to get carried away in all the hype and details on the news, financial magazines, and internet blogs. Sometimes it’s information overload and you just need to return to the basics. Paying down debt is almost always a good bet.