To say that the American consumer has been spooked by the gloom and doom of economic reports is putting it lightly.

The fact is most of us have at some point in our lives made a rash decision out of fear that we later regretted, and many of us have put off critical financial decisions for fear of making the wrong choice. In this economy the only thing worse than overreacting is not reacting at all.

In today's uncertain times, it's easy to subconsciously make decisions based on fear instead of fact. We have to take emotion out of the equation, or we risk making financial decisions that actually hurt us in the long run.

Consider retirement investing, for instance. Emotion tells us that we're in a free fall and to get out of the stock market. But the facts say the market is priced at what it was 12 years ago. Emotions might run particularly high for retirees who have seen a big drop in the value of their lifetime assets.

If you are one of them and feel a need to move your money out of the market for peace of mind, one option is to start small. Withdraw only the money you need to cover your living expenses for the coming year.

Worried about college savings? Emotion tells us to pull everything out, while logic says to sit tight and consider all money-saving options including less expensive schools and living at home. If you have a child starting college next year, remember that you actually have a five-year goal. Take it one year at a time. If your assets or income have taken a big hit recently, be sure to update your Free Application for Federal Student Aid. You could be newly qualified.

Are you a saver or spender? Emotion tells us to save every penny in this economy, while logic says if you have saved for your personal needs or planned for a large purchase, it is OK to spend.

Many people don't balance their checkbooks today, so try writing your budget on a 3-by-5 card and carrying it with you; every time you spend money, subtract it from that card so you don't overspend. Most important, know where your money is going so you can understand how to better save.

Sometimes knowing the facts isn't enough when we are emotionally close to the decision. Having a written plan can help you weather a difficult economy. People who have a financial plan report greater confidence in their ability to retire comfortably, have greater financial security on a day-to-day basis and report feeling less financially stretched.

Now more than ever you can benefit from the support of an educated and trusted adviser who can help you replace fear with fact and emotion with logic as you navigate your financial future.

Kathy Skillington has been a financial adviser at First Command Financial Services in Aiea for nearly 20 years. She can be reached at 487-7222.