We knew this would be a particularly rough year for the birthplace of the subprime mortgage industry.

Now a rundown of its housing and economic woes by Bloomberg News shows how California is paying the highest price of any state.

Just look at how 2008 is starting out:

• Its economy is in recession. California's gross domestic product is projected to fall at a 1.5% annual rate in the first half of 2008 -- more than any other state.
• Its housing market is a shambles. Home sales were 30% lower this January than in January 2007, and the median price for an existing home dropped 22% to $430,370.
• It will almost certainly continue to lead the nation in foreclosure filings because one out of every four subprime loans -- the risky, high-cost mortgages driving this mess -- were made in California.

The next big blow to the Golden State's standard of living: Lower property tax revenues will force cities to reduce everything from police protection to library hours.

Wherever you live, now's the time to prepare your family finances to weather a recession. Our 6 smart moves for tough times can help you through whatever the rest of the year might bring.