Some examples of how to react to the crisis

BY KARIN PRICE MUELLER

PROFILE No. 2
Married couple, age 32, with two salaries totaling $120,000 a year and two kids, ages 4 and 2. They owe $250,000 on their mortgage, $20,000 to a home-equity loan and $5,000 in credit cards. They have $30,000 in an emergency fund and both contribute the max to their 401(k) plans. They have no college savings.

What they should do: "Make sure that they have the maximum credit line available on the home equity line," Lynch says. "I like that they have $30,000 in the emergency fund which would be helpful in the event of a layoff, but they should pay off the credit card debt even if they have to reduce the contribution in the 401(k)."

What they shouldn't do: Anything drastic. "Continue to invest in their 401(k) account, maintaining a very diversified allocation. The next 6 months will be a buying opportunity for these long-term investors," Fraasa says.