One of the problems I see with the recession is that so many people have been living on the edge.  When the economy changes and they suddenly have to spend more on gas, food, electric, etc.  They suddenly don’t have enough money.  Why?

Most people don’t live within their means.

They spend every last dollar they make.  Many spend more.  They put extra on credit cards.  So if suddenly gas costs them an extra $100 a month, groceries cost an extra $100 a month and utilities cost an extra $100 a month they don’t have enough money left over to pay for it all.

The problem is spending.  If you make $5000 a month you shouldn’t spend it all.  You should pay yourself first.  Set aside just $500.  Put it in an IRA or Money Market or something so you can call on it if you need it.

Most people do just the opposite.  They make $5000 a month and spend a little more.  They make extra purchases and put it on their credit cards.  Pretty soon the credit card minimum payments creep higher and higher.  Then they end up getting deeper in debt and they can’t keep up with all their payments.  That’s the real problem in America right now.  Credit is killing us.

Learn to live a little beneath your means.  Pay yourself FIRST at the beginning of every month.  When you take money out at the beginnig of every month you won’t even realize it.  Within just a few months you’ll begin to see your bank account grow and you’ll be better able to handle these economic swings and downturns.

- Ben Fitts

 PS. We’ve been bit by credit in the past too so it’s a lesson we’ve had to learn from experience!

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