Consumers should expect tough economic conditions to linger throughout much of 2009 and possibly into next year, according to the Federal Reserve.

In minutes from the Fed's December meeting that were released this week, members had a generally downbeat view of the economy's short-term prospects – a view that reflected a general worsening of the economy in 2008.

"The severe ongoing financial market strains, the large reductions in household wealth, and the global nature of the economic slowdown were seen by some participants as suggesting the distinct possibility of a prolonged contraction," state the minutes from the meeting.

One key area of concern that was discussed at the meeting was deflation, although lower prices for commodities such as gasoline have been one of the few recent bright spots for consumers. Another serious problem facing the economy is the current credit climate, which has impacted the ability of many consumers and companies to finance major purchases.

With this in mind, 2009 is expected to be a year when many consumers simply focus on staying ahead of their bills and, whenever possible, paying down debts. To weather the economy, many consumers are cutting back unnecessary spending and avoiding new debts if they can. Many are also working payday loans and other options into their financial strategies.

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