Living Within Our Means

Is it possible to live within our means? I used to ask my husband on a daily basis how does everyone live in a beautiful home, drive a new car every few years, pay for their children's college education and take vacation after vacation? He would answer they don't and I would argue but they do. I guess he was right, they don't!

When President Obama spoke this week about living within our means I wondered if everyone understood what that meant. The last time we heard these words spoken was from President Carter, and no one listened. After 9/11 President Bush told everyone to go out and spend. Spend they did, on homes, cars, vacations, computers, flat screen televisions, etc. But how did they do it? They took equity out on their homes to pay for what they wanted and not necessarily what they needed. They maxed out their credit cards, took enormous college loans, leased their cars, charged trips, and turned in their homes for bigger ones. Mortgage companies gave people a false sense that they could afford a home of their dreams by offering sub prime mortgages or interest only mortgages. Some did not even check their employment status. Suze Orman was on all the talk shows this week telling everyone to start saving and stop spending. Most Americans have nothing to fall back on if they lose their jobs. Credit card companies that charge 18% interest are now going to charge 31%. The sad part about this is that other countries followed our lead.

Will the economic downturn we find ourselves in change the way we spend money? Is it possible for us to live with less? As Americans, are we able to be satisfied with owning what we can afford and need vs. what we want? I have been trying this new experiment when I shop now. Before I make a purchase I ask myself a few questions. Do I need it? Can I afford it?

You would be amazed at how many items I put back!

Dorothy Goodwin