A new study is showing that many states are heading toward an economic disaster. Everyone knows that California is facing a back breaking deficit. The state government decided to try and ease the crisis by increased borrowing but that hasn't worked and they are facing astronomical deficits.

This debt will most likely mean higher taxes, more layoffs of government employees, crowded classrooms, and fewer services in the nations most populated states. States most at risk for the next year and many years to come include Arizona, Florida, Illinois, Michigan, Nevada, New Jersey, Oregon, Rhode Island, Wisconsin, and of course California.

The Pew Center of the United States released a recent study that showed double digit gaps in the budget along with rising unemployment and thousands of home foreclosures. This study forced lawmakers to take a realistic look at the economic catastrophe and what actions should be taken in order to try and throw the system back on track.

Even though there are only ten states that made this list they account for almost one-third of the American population. This is a big deal and it affects every American whether you live in one of these states or not.  Economies and states are so integrated and linked that it affects everyone.

Susan Urah said "Decisions these states make as they try to navigate the recession will play a role in how quickly the entire nation recovers." California is the most vulnerable state on the list but fellow states face the same hardships California does. California currently has nearly $60 billion in budget adjustments that must be made. This most likely means cuts to education, social service programs, temporary tax hikes, as well as stimulus spending.

Governor Schwarzenegger has estimated that the deficits for this year will run between $12.4 and $14.4 billion. By the end of this year the governor plans to have a spending plan in place. However, will this turn the economy around? Because of the global financial crisis in the last two years California has seen general spending decrease by $20 billion. Many Californians are wondering how they will face further tax increases and how their lives will change with all of the service cuts.

The government is telling residents that they have come a long way but drastic actions are still required. Previous cuts were frivolous and affected fewer people, but now government has to cut necessary funding which will affect growing numbers of people. These will be the most painful cuts for Californians.

Hopefully California and the other nine states will be able to make budget cuts that will affect fewer people and that will eventually turn their budgets around. These states still aren't out of the woods but with some planning and scrimping they will most likely be able to turn around and get on the road to recovery. Which in turn, will improve the economies and budgets in not only these states but the rest of the nation.
 

You may think you're prepared for what will happen in your life, but you're not. There are major events that can change the outcome of your life. You may get married, have children, lose your job, or go through a messy divorce. All four of these events will not only change your life but heavily impact your finances.

Whether you choose to do these actions in life they all come with change whether it's good or bad. These changes that you make will have a major and lifetime impact on yourself and your finances. The best thing to do is prepare. Start by saving up and do not allow yourself to get in the red. Live within your budget and save because if you have a hefty savings and you're unemployed you can live off of the money saved up until you can find full time work or it can subsidize a part time or temporary position.

One of the most important steps you will take in your life is marriage. If you aren't married yet, live frugally because when you decide to marry you will have two different sets of debt. It's also important to talk about your debt and financial plans before you tie the knot. One you're married it will be two times as difficult to pay off the debt than when you're single.

Also make sure you know the debt your fiancée is carrying around because it will affect your finances and the stars in your eyes may disappear permanently. After the honeymoon you should sit down together and talk about your goals in life and then how to pay for them. You also need to consider long and short term savings as well as mutual funds, bonds, and etc.

The second life changing decision is to have children. They are a blessing but important steps need to taken when you decide to have children. Ideally you should have most debts paid off, good credit and both short and long term savings accounts. You should also save up because babies are expensive and it's a great idea if possible to save up six months worth of living expenses. Another important thing to do is sign up for life insurance as soon as possible so your baby is protected financially if something happens to you.

Employment is also a factor that can mess up your finances. Layoffs and unemployment are common in today's world. If you still have a job make sure that part of your paycheck is going towards savings so that you can buy the necessary items to survive. Losing a job will impact your finances and if you have a spouse, children, a house a car payment and other expenses; money needs to be coming from somewhere. But once you are unemployed don't live the same lifestyle and put on the bills on a credit card. Start by cutting back and make a list of your expenses then calculate your current income and try to cut back enough that you're expenses are less than your income. If you're still over the budget, cut the unnecessary spending and get rid of you're high payments like a car or motorcycle.

Besides marriage, children, and unemployment, the big breakup or divorce is also going to change your financial situation. More than 40 percent of marriages in the U.S. end in divorce. If you are getting divorced you will face emotional and financial problems. If you're going through a divorce meet with your financial advisor ASAP. Try to reorganize your investments and make sure that you never stop saving. You may have less money but you can still save up and live a financially independent life.

Life is unpredictable and you never know what will happen. By saving, you can plan for those unexpected turns in your life. If you aren't prepared and have no savings, your finances can shortly get out of control. Prepare yourself and when changes occur, quickly adjust because finances play an important role in our life and they can either make it or break it. 
 

With finances, the U.S. has not done very well in the past few years. New York was formerly the world's top financial sector. However, because of financial problems the World Economic Forum has determined that out of 55 countries that made the cut on the Financial Development Index, London is now in first place.

The Index rates countries on the stability of their financial systems and markets. Countries are evaluated on more than 120 different criteria. These variables range from institutional and business environments to the size of equity and bond markets, along with technology infrastructure, and the ease of getting personal and commercial loans.

Since last year Britain rose in the index from spot No.2 to No. 1. Britain has also faced the rough markets but was able to stay afloat and claim first place because of the strength of its foreign exchange, derivatives, and insurance coverage. Another surprising jump was Australia. In just one year Australia was able to move up 9  numbers on the index in order to claim second place. New York on the other hand fell from first to third place.

London is now in first place but experts wonder if they will be able to maintain their  position. New York is still wealthier but the index is based on more than just wealth. Currently, individuals in Britain are criticizing the government for unnecessary and increased regulation along with higher tax rates.

Other countries like France and Germany also fell down the list. They previously had been in the top ten but are now in rankings 11 and 12. As it turns out the largest and most industrialized economies are the ones that have been hit the hardest by the global recession. Because of the size, nature, and diversity of these countries they have been exposed more than others by the downturn. Most developed nations fell sharply on the Index because of the credit crisis.

However, the fall of these wealthy and powerful countries let other developing countries like Brazil, Chile, and Malaysia onto the list. Because the large countries were hurt by the economy these other countries have been able to close in some of the gap between themselves and Western countries. Some of these countries were able to pull through the crisis relatively unscathed because they learned from past crises or were not integrated enough into world financial systems.

Overall the index showed how much the global economy has affected these countries. In this years top 10 there were significant declines in developed countries but strengthening in developing countries overall scores. The most surprising discovery of all was  Australia's banking system and the fact they moved up 9 rungs on the Index.

Experts believed Australia would hold steady and improve a little bit but not jump from No. 11 in last years index to No. 2 in 2009. Even though countries are struggling with their financial systems, Britain and the U.S. remain at the top because of the amounts of capital, financial transparency, and other advantages that will keep them in the top for years.

However it's essential to understand that financial systems in the U.S. and U.K. are still in trouble. The decrease in rankings on the index and the lead in relation to other countries drastic decline is concerning. What leadership decides to do in the near future is critical to the recovery and strength of not only individual countries but also global financial systems.