Personal recession

By Liz Pulliam Weston

You may feel increasingly squeezed even while your income or assets are growing. Or you might think you're doing fine when your economic foundations are being eroded underneath you.

Liz Weston looks at three important indicators on your personal finances -- your real income (and how far it goes), your net worth and your economic prospects.

If you're not doing well in at least two of these three areas, you're in danger of sliding backward in your journey.

Make some moves now to make sure that doesn't happen.

Is your real income rising or falling?

If you're not making at least 2% more than you were last year, you're not keeping up with the general rate of inflation.

Even if your overall wages are growing, you might still be feeling a pinch.

The most likely culprits are health care, energy costs and food.

All are 4% to 5% higher than a year ago. The more of your budget that is spent on these expenses, the more you're likely to feel as if you're losing ground.

How's your net worth?

Ideally, your net worth is higher now than it was last year. But it might not be.

Your home's value may have slid, your investments may have faltered or you may have added new debt.

A one-year drop in net worth isn't necessarily a crisis, but you should have a plan to start building your wealth.

Possible economic fixes:

Pay down your debt

Increase your contributions.

Build your savings.

Now it's time to look at the final piece of the puzzle: your economic prospects.

How's your future look?

Is your company growing so fast it's bursting at the seams -- or did it just announce another round of layoffs?

If it's publicly traded, what do analysts say about its future, and how's the stock price doing? What are the prospects for your industry?

Now look closer to home.

How well-regarded are you within your company and within your industry?

Have you identified your next career step and determined how to get there?

Are you adding skills and people to your network of contacts, or are you hiding in your cubicle?