5 Ways to Pay It Forward

Use downturn to help build a better future.

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My oldest son, 27, had just finished an extended holiday stay prior to moving to a new state, hopefully a new job, and the next chapter in his life. At the airport, I watched from the curb as he strode purposefully with his bags into the terminal, head held high in anticipation, and quickly disappeared.

It is becoming my son's world now, just as in Washington, it is becoming the world of Barack Obama and many new, younger public leaders. As we prepare to inaugurate a new president, that world is marked by deep recession, war and terrorism, and enormous climate and energy challenges. As retirees and older Americans, we must deal with looming financial and health concerns and highly uncertain—as well as personally risky—futures. Increasingly, we will also be deciding what we will do to shape the world we will leave behind for our sons and daughters and for their children.

Here are five ways to change the way you live and, in doing so, to invest in a better future:

Rediscover your community. There is literally no better time to start than today. Martin Luther King Jr. Day is a national day of volunteerism and community service. Go online and find opportunities in your community to help: Stock food-bank warehouses, fix up the homes of elderly neighbors, or paint a school classroom.

Spend l ess. Consumer spending has made up more than 70 percent of the overall economy in recent years—much higher than in other countries and even several points higher than the averages of the past 40 years. We can't afford to keep it up. So cut back, and use your savings for other must-have items or to pay down credit cards or invest. "The generation that put the mass into consumption is now at the stage of life where people naturally shift focus from the material to the ethereal," writes Matt Thornhil, head of a marketing consultancy called The Boomer Project:

This shift away from spending by our largest demographic group coincides with a larger societal trend towards sustainability. Consumers of all ages are thinking more about the environmental impact of their purchase behavior and consumption patterns...one last ingredient to this perfect storm: the worst recession since the Great Depression. Put all three trends in a blender and the future for marketers is grim indeed. Mass consumption, the underpinning of the American economy since 1946, is dead, dead, dead.

Reduce your footprint by downsizing. Depressed real estate markets may make it tough to sell your home, but at least do the math, and figure out your minimum selling price and how much you can save if you move into a smaller place. Consider unloading unneeded possessions. Start or expand a home garden.

Use less energy . Whether it's cutting down driving trips, lowering thermostats, or using energy-efficient light bulbs, shrink your energy usage. Go through your home room by room and conduct your own informal energy audit. Then act on it.

Invest for a different future . Investor skepticism may weigh on stocks for many years. Look for high-yielding and highly rated stocks and bonds. Unless you are absolutely sure you'll hold a bond until maturity, avoid bonds with low coupon rates whose values will plunge as interest rates increase. If you believe that alternate-energy providers and infrastructure improvements are the future, then invest in those companies.