Staying afloat financially

Consumers who demand instant gratification fuel an economic system that encourages college students and young families to borrow money, so they can have the "good life" their parents could only enjoy after decades of hard work and saving.

Well, the bills are now coming due. To pay for the trillions of dollars of debt it has incurred, the U.S. government has been increasing the supply of dollars, which is fueling inflation, as borrowers use over-valued dollars to pay old and future debts. This has accelerated the rising costs of many goods and services, including gasoline, food and utilities. Too many dollars are now chasing a limited supply of commodities.

Each of us cannot individually solve our whole nation's fiscal problems. However, we can take steps to put our own financial house in order, so we can protect our loved ones from the worst of what is yet to come. Here are some practical tips we can take, requiring a little economic discomfort now, to spare ourselves terminal financial pain later.

First, start saving! Try to set aside a fixed percentage of your earnings each month, just as if it were another bill to be paid. In 2005, Americans' average savings rate was negative: -0.5 percent, so if you can put away 5 or 10 percent of each paycheck, you will be in far better shape than most Americans.

"But I can't afford to do that; I'm already over my head in debt!" you may say. Well, then, ask yourself: "What can I do without?" Food, shelter, clothing and transportation are basic necessities. Make a budget for these, and stick to it. Can you carpool to work or to school? Can you make do with last year's wardrobe? Instead of eating at an expensive restaurant, how about an economical family meal at home? If you can plant a garden, the fruits and vegetables you grow will be far more nutritious and less expensive, than what you buy at a store.

Next, look at what you are spending on your housing. Before the "sub-prime" mortgage crisis, lenders expected no more than 28 percent of household income to be spent on a mortgage and related expenses. If you are spending more than that, you may be in for trouble! Even if you cannot relocate, you can take steps to control your expenses. Turn down the heat, and put on an extra sweater and use an extra blanket at night. In summer, turn the thermostat to 76 instead of 72. If you turn off unneeded lights, and take shorter, cooler showers, you will see your electricity and water bills drop. Are 200 channels of cable television really necessary, when you cannot even keep up with what is on basic cable? Make wise choices in housing, and you will save more than you might imagine.

Finally, stop going farther into debt. Put away those credit cards! Keep just one for emergencies, and start paying off each month's expenses in full. Using cash or checks can help you stay mindful of your spending.

The average American has been trying to "keep up with the Joneses" for far too long. We often forget that Mr. and Mrs. Jones have been trying to keep up with us! It is time to say "Enough!" and start making wise choices, before the economy crumbles and those choices are gone.

Why is this happening? Why did the United States and the British-descended nations prosper for so long, only to face economic disaster in the very near future? Read our booklet, The United States and Great Britain in Prophecy, to learn the answer. Read it outside – sunlight is free!