Why is it that Americans are (on average) only frugal when they are facing a big financial crisis? Then once the crisis is past they don't seem to learn from their mistakes, they just go right back to their over consuming ways. If they would continue to be a bit on the frugal side, they could avoid another financial crisis!
You must be responsible for your own security. You must provide for yourself and your family. There are many ways, large and small to do this. First, get rid of your consumer debt. As long as you have the rental place, credit cards and store charge accounts hanging over your head, you will never be financially free. These things make you a slave to your debt.
If so many millions of people had not taken on so much consumer debt then the recent financial crisis in this country could have been averted or at least would not have become such a big meltdown. If every American would pay attention to where their money goes, and live a bit more frugally, they could accumulate some savings. It has taken me a long time to get where I am, and I did it very gradually over about 10 years, paying off a lot of debt and as I was getting out of debt, when I got a little breathing room, I started putting some money in savings.
Today I continue to make a budget each month and try to stick with it. If you are deep in debt I would like to recommend two things that have really helped me a lot. How to Get Out of Debt, Stay Out of Debt, and Live Prosperously*: by Jerrold Mundis was the amazing book that helped me out when I felt things were hopeless. I read his original edition and it has some very good advice and many helpful tips for beating the debt trap. He even tells you how to deal with creditors and how to negotiate lower payments and interest rates. This was my financial bible for about 8 years while I dug myself out from under a mountain of debt.
An important part of Jerrold's message is that things are going to be ok, at least in America there aren't any debtor's prisons. Through true life stories of ordinary people that were once deeply in debt he gives you hope. If they did it, so can you.
Then about 2 years ago I discovered YNAB; YouNeedABudget.com I had stopped paying attention to my money and had become overdrawn in two bank accounts. A few weeks later, searching for an easy budgeting tool that I could keep open on my computer, to help remind me to pay attention to my money, I found YNAB. Jesse Mecham's sound and simple financial philosophy gave me another boost towards my goal of financial freedom.
The first "rule" of YNAB is to stop living paycheck to paycheck. To accumulate enough savings so that on the first day of the month you already have all the money you need in the bank to pay all of your living expenses for the month. In practice this means that the money you earned in June becomes the basis for your budget and the money you will spend in July. Jesse calls this your 'buffer'.
Since I get paid every two weeks, regardless of the date, one or more times a year I have a month with 3 paydays. This happened the first time about 6 months after I found YNAB. I was really paying attention to my money and making a lot of progress towards my goals, but had not managed to get my buffer in place yet. But during this 3 payday month, the first two paydays paid all of that month's expenses and then the 3rd payday became half of my buffer. In other words on the first day of the following month I already had half the money I needed to live on for the month. When the same situation rolled around a few months later I had my complete buffer in place.
The relief of having my buffer is enormous. No more running around on payday trying to get my check and get to the bank because I have to pay a bill and am in danger of something being turned off or repossessed. I love it. I don't even worry if I'm not at work on payday, I just pick up my check and go to the bank when it suites me.
And now when I have a 3 payday month I have time to think about what I want to do with the extra check that month. I am on the last of my debt, the line of credit on my house. It should be paid off about January of 2012. So I can decide if I want to make an extra payment on that bill or buy something I'd really like to have or put it towards my vacation fund. It has become a lot of fun to think about all the things I could spend a whole paycheck on!
And here's a couple of t shirts for you depending on where you are at!