The global economy remains on a knife edge but it's in a far better position than this time last year. It's not going to be clear for some time if the big gamble of socialising all of the toxic debt in banks and passing it to future generations of taxpayers will pay off, but it has to be tried. The uncertainty will overhang all financial decisions for some time to come so here's what to do to balance the risks;

1. Continue to pay down debt. Ideally get all your lifestyle debt down to less than 25% of your annual net earnings and eliminate the use of credit cards if you can.
2. Fix your mortgage early this year getting the longest rate you can like AIB's ten year 5% deal. Switch banks if you have to because long term rates are going to go through the roof over the times ahead.
3. Haggle to get best prices right across all aspects of spending, heating up competition within the economy to push prices down even further.
4. Save now for your summer holidays to avoid having to resort to borrowing midyear.
5. Sell any surplus stuff you have to generate extra cash whether on e-bay or in a car boot sale.
6. Run a cash diary for Jan and Feb to zero in on wasteful cash spending over the rest of the year
7. Do up a spending budget for the year that includes once off costs and try to stick to it each month.
8. Prepare for inflation. Put a chunk of cash into gold and silver certificates or funds because these will act as a hedge against it.
9. Switch some of your long term pension and investment funds into assets that respond to high inflation, that means natural resources like oil & gas, metals, alternative energy and water.
10. Invest in inflation-linked European government bonds through funds that specialise in these sectors from Friends First and Standard Life. Exchange Traded funds are also available.
11. Support the National recovery Bond but only if it is inflation proofed.
12. Take the reduced VRT deals on Band A and B cars and hybrids by swapping your old clunker for a new one.
13. Move to smaller engine cars because petrol and diesel are going to go through the roof. You'll also save on road tax.
14. Insulate your home to save on home heating costs even if it's just an attic job
15. Become a member of your local Credit Union just in case you run shy of cash during the year.
16. Talk to your bank now if you think you might fall into arrears on loans anytime next year.
17. Hard as it is, try to ditch fags and reduce booze both of which can account for up to 15% of spending.
18. Keep investing in your future pension fund especially if you're a top rate payer.
19. Be ready to switch banks to European players like Rabo at the earliest sign of a fresh banking crisis.
20. Be resilient, expect continued volatility, we're far from out of the woods just yet and don't be slow to get out of the gaffe if you source good work abroad for a while.

A steady recovery in the global economy, feeding into Ireland's nascent upturn is what I'd expect but the real risk of another leg down will remain throughout 2010. That's why it makes sense to position yourself for potential inflation sparked by global growth on the one hand but to eliminate wasteful spending on the other. I wish all our readers the best in 2010. Live long and prosper!