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If small business owners are not highly leveraged, they are more apt to be nimble and adaptable. If they seek—and take—advice and have the ability to react quickly they are more likely to weather the tough years.

"The key is to be in a good financial position before a downturn where you don't have a lot of debt," says Goldsberry.

But what should your strategy be if retirement is a good 20 or 30 years away?

Being able to sit down with an adviser and project out five, 10 or 15 years will eliminate the wonder about whether or not an investment strategy will work—and determine whether you're saving enough.

There are some basic cost-saving strategies you can employ:

• Consider buying a used car. Many newer cars coming off of short-term leases are good vehicles with lower mileage and less wear and tear.
• If you haven't refinanced your mortgage in the past year, you should take advantage of the very low mortgage rates.
• Eliminate your consumer debt and credit cards. If you have a lot of consumer debt, talk with your financial adviser about structuring a better payment option.
• Pay yourself first. The best way to begin saving is to have a manageable amount of money automatically withdrawn from your pay to a savings vehicle. If you don't see it in the first place, you won't be tempted to spend instead of save. Lifestyles generally adjust to your available cash flow after 401(k) or similar savings deductions.
• Take care of your retirement plan first, not your children's education. Children can take out student loans or work their way through college, but you cannot easily replace the lost savings of your retirement if spent on education.

Whatley recommends that families teach their children how to handle their money. It's never too early to encourage them to save and how to appreciate the value of an earned dollar.

"We've all spoiled our kids, even those of us in the middle class. Every kid expects to have a car, computer, TV and cell phone by the time they are in high school. I think that's changing in some cases because many parents are experiencing lower returns. Now is the time to teach kids about the value of saving," says Whatley.

Talk to your children about savings, rules on spending, how to manage their own finances, the real cost of buying on credit and how to save using achievable objectives.

Of all the age groups now, Whatley sees positive habits in those that are just graduating from college. "They're smarter than we were at their age. They've matured a lot and have really good heads on their shoulders. They're putting money away in their 401(k)s. The trick will be to continue those good habits once they settle down, get married, buy a house and start a family."

Many have education debt, but Goldsberry says that investing in your education is one of the best uses of money—interest rates are low and repayment terms are manageable.

As we go to press for this issue of The Leading Edge, many families will begin feeling the benefits of the Jobs and Growth Tax Relief Reconciliation Act of 2003. However, Whatley is skeptical about the long-term benefits of such relief.

"I believe that the rate reductions on ordinary income, dividends and capital gains will provide taxpayers with additional assets to be saved or consumed and as a result can have a positive impact on the standard of living.

"However, history has proven that such benefits are short lived. As the economy heats up, inflation kicks in and the tendency is for income taxes to increase. So these benefits are probably short term," he says.

Goldsberry agrees. "The additional depreciation for business will have a short-term stimulus effect, but I don't think that cutting tax rates on capital gains is enough to increase the value of the stock market. We may well end up giving back this money in the form of state taxes."

The bigger lesson learned—start saving today! e