Old Advice Is Still Smart: Live Within Your Means

Back in the day, people used to worry about keeping up with the Joneses. The phrase means you spend more than you planned to just to keep pace with, say, the neighbors or your brother-in-law. These days, many of us have zoomed way past the Joneses. Evidence from the Department of Commerce and the Federal Reserve is that American households spent 125% of disposable income in 2007 to pay off debts.

You don't have to be a math wiz to see that this can't work for long. If you're part of this sobering statistic, the old advice applies today: Live within your means. And to make real progress building your personal wealth, live below your means.

Yes, that's hard to do when food, fuel, and medical costs climb relentlessly. But another time-tested piece of advice can help you plug leaks in your family finances: Use it up, wear it out, make it do, or do without. Some examples:

* Use it up: Don't buy a new, heavily advertised cleaning product when you have others left over in your cupboards.

* Wear it out: Keep driving that older vehicle a year or two longer; update last year's wardrobe with a few accessories instead of stuffing your closet with new clothing purchases.

* Make it do: That flat screen TV is calling you, but there's nothing wrong with the one in your family room.

* Do without: Give future purchases a minimum three-day cooling off period; you'll usually find that the item you "had" to have has lost its luster--but you've saved what you might have spent on it.

You can think of other examples that fit your daily life. The idea is to stop spending without thinking. For more help wrestling with debt overload, talk to the people at Robins Federal Credit Union.
Before you know it, the Joneses will be envying you and your financial independence.

Copyright 2008 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.